Tuesday, January 3, 2017

America’s Concern for the Poor is About to be Tested

Washington Post 12/26/2016 Op-Ed by Robert Greenstein

Poor Americans are facing the gravest threat to the federal safety net in decades as President-elect Donald Trump takes office accompanied by a Republican-controlled Congress. The risks to essential benefits for tens of millions of low- and moderate-income Americans include losing coverage extended to them by the Affordable Care Act, threats to the fundamental structure of the Medicaid health-insurance program for the poor and further reduction of already squeezed funding for scores of other important programs serving the most vulnerable Americans.

First, Republicans are expected to seek significant cuts in what’s known as non-defense discretionary spending, which includes many important programs for low- and moderate-income people, such as rental vouchers for low-income families, programs to fight homelessness, job training, funding for poor school districts, Head Start for young children and Pell grants to help low-income students afford college. The reason for these cuts is that, for the first time, starting next fiscal year, Republican leaders appear inclined to let the harsh “sequestration” budget cuts take full effect. That would shrink funding for this budget category to its lowest level in at least half a century, measured as a share of the economy. And even deeper cuts, as proposed by the most recent House Republican budget and the president-elect, are possible. 

More broadly, congressional Republicans are likely to follow the course set in every House GOP budget since 2011, as well as the most recent final House-Senate budget, in 2015. Every one of those budgets secured the bulk of its savings from programs for low-income people. In the House GOP’s most recent budget plan, 62 percent of a stunning $6 trillion in budget cuts over 10 years would come from such programs. 

Both Trump and House GOP leaders have also proposed large tax cuts that would mainly benefit the most well-off and could cost several trillion dollars over the next decade. That, in turn, would likely force further rounds of cuts in domestic programs in future years to address the resulting increase in budget deficits. 

Do we really want to increase hardship for tens of millions of low-income people even as we shower tax cuts on people at the top?

Republicans have controlled both chambers of Congress in recent years, but their budget aspirations were checked by President Obama. With Trump about to take office, they will have the means to enact their radical visions into law. And they will likely have a key administration ally in Rep. Mick Mulvaney, a South Carolina Republican and hard-line conservative whom Trump has picked to run the Office of Management and Budget.

History shows that the biggest domestic policy changes generally come in a new president’s first year when the president's party controls all the levers of power in Washington and uses a fast-track budget process called “reconciliation” to ram through an agenda without needing a single vote from the other party. 

To achieve their goals, Republican leaders plan to push through two major reconciliation bills in 2017. 

The first, which could pass as early as January, would repeal the Affordable Care Act’s coverage expansions and most likely take effect at the start of 2019. That would double the number of uninsured Americans, from 29 million to 59 million, and leave the United States with a higher uninsured rate than before the ACA, the Health Policy Center at the Urban Institute estimates.

The second reconciliation bill could couple regressive tax cuts with a radical overhaul of Medicaid and possibly the Supplemental Nutrition Assistance Program (food stamps) and even the Supplemental Security Income program for the elderly and disabled poor — three core low-income assistance programs. If previous House GOP budgets are a guide, Republicans will likely seek to eviscerate the basic structure of these programs, under which there are minimum federal eligibility and benefit standards and all eligible families who apply for benefits receive them. Recent House GOP budgets would instead give states fixed, inadequate pots of money (likely block grants), with sweeping state flexibility to respond to the funding reductions by restricting eligibility and cutting benefits. 

That’s what happened after the 1996 welfare-reform law replaced guaranteed cash assistance for eligible poor families with a block grant that gave states broad flexibility over the funds. A year before the law took effect, 68 of every 100 poor families with children received cash assistance. Today, just 23 of every 100 poor families do. A comparable shrinking of health, food and cash assistance under Medicaid, food stamps and SSI would take critical benefits away from tens of millions of struggling low-income families and children, despite research indicating that basic assistance for poor children can boost their educational attainment and their earnings potential in adulthood. 

Franklin Roosevelt once said , “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” If so, America is about to be tested.

Robert Greenstein is president of the Center on Budget and Policy Priorities.