The 2021 Trump Budget: A Harmful Blueprint
By Caroline Nutter
On February 10, the Trump administration released a budget for FY2021 that makes harsh cuts to health care, food and energy assistance, and other supports millions of people rely on to make ends meet. The administration’s proposal, which would cut the federal budget by $2 trillion over the next decade, also calls for the 2017 tax cuts to be made permanent. It’s estimated that those tax cuts — which disproportionately benefitted the wealthiest people and corporations — cost at least $1.5 trillion between 2018 and 2028.
Health Care Cuts
The bulk of the administration’s proposed health care cuts come from stripping about $1 trillion in premium subsidies (those subsidies help families who earn qualifying incomes afford to pay for health insurance they purchase through exchanges like Connect For Health Colorado) and funding for states to expand Medicaid. Medicaid expansion and premium subsidies, originally laid out in the Affordable Care Act (ACA), were the two foundations of the policy. The budget would also implement work requirements for Medicaid, which would leave millions of people without the ability to afford to see a doctor or get other health care services. These cuts come after the administration failed to repeal the ACA in 2017 and signed on to support a lawsuit filed by a group of states led by Texas who argue the law is unconstitutional.
Cuts to Tools for Reducing Poverty
The budget not only proposes $182 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) and a $20 billion cut to Temporary Assistance for Needy Families (TANF) over the next decade, it also makes it harder for people to qualify for SNAP in the first place. The budget proposes extending the work requirement rule for those receiving SNAP from age 49 to age 65 and imposes new requirements on states for families who receive TANF. The administration also proposes a 43 percent reduction in funding from FY2020 to FY2021 for housing assistance by eliminating the National Housing trust fund, taking away vouchers for 160,000 households, and cutting other development programs.
Cuts to Student Loan Debt Relief
President Trump’s proposal would cut the popular Bush-era public service loan forgiveness program as part of a $170 billion cut in assistance for certain student loan borrowers. In addition to the cuts to the loan forgiveness program, it also includes cuts to work-study funding, proposes annual and lifetime limitations for parents and graduate students looking to take out loans, and eliminates subsidized federal student loans. The budget does contain modest expansions in eligibility for Pell Grants and provides additional funding for Historically Black Colleges and Universities (HBCUs).
Tax Cuts
This proposed budget would make permanent the temporary personal income tax rate cuts passed in the Tax Cuts and Jobs Act of 2017. That law, also known as the Trump tax cuts, made sweeping changes to the federal tax code, including permanently lowering the corporate income tax rate from 35 percent to 21 percent. The law also included significant cuts to personal income tax rates. For instance, beginning in 2018, the law reduced the top income tax rate for couple filing joint income tax returns from 39.6 percent to 37 percent. We’re already starting to see income inequality worsen, with the nonpartisan Congressional Budget Office projecting incomes for the top 1 percent will grow twice as fast as wages for middle-income families. That unequal growth is due, at least in part, to the Trump tax cuts.
What Isn’t Getting Cut?
The budget proposal would increase funding to the Department of Veterans Affairs (VA) by $12.3 billion, NASA’s budget would increase by $2.7 billion, and the Department of Homeland Security (DHS) would see a spending boost of $1.6 billion. The increase in VA spending would be directed towards the fight against opioid abuse and suicide prevention, as well as expanding caregiver benefits to those caring for sick or disabled veterans. The majority of NASA’s increased spending is to go towards the President’s goal of sending astronauts to the moon by 2024. Unsurprisingly, increased budget dollars for DHS would be used to expand deportation powers and for border wall funding.
A Harmful Blueprint
As troubling as this budget is, as in past administrations, the president’s budget is an “aspirational” document since spending caps for the upcoming fiscal year have already been set by Congress and the White House. The document is, however, a look at the administration’s goals for the future. It’s clear the White House is committed to slashing funding for tools that lift millions out of poverty and remove barriers for families struggling to make ends meet, while simultaneously making permanent the temporary individual income tax cuts passed that went into effect in 2018.
