CHN: President Trump’s FY21 Budget Slashes Critical Human Needs Programs
The Trump Administration released its Fiscal Year 2021 budget on Feb. 10. From slashing housing assistance, Medicaid, SNAP/food stamps, education, Social Security, and other basic needs programs, to proposing harsh work reporting requirements for several federal programs, to completely eliminating programs like home heating and cooling assistance for low-income people and food delivery to low-income seniors, President Trump’s FY21 budget would push millions of Americans into or deeper into poverty and leave them without the assistance they need. At the same time, the budget permanently extends the 2017 individual tax cuts which were scheduled to expire in 2025. While the White House estimates this will cost $1.4 trillion over 10 years, the Tax Policy Center estimates the cost as $3 trillion over 10 years.
Overall, the Trump budget proposes large cuts to funding for FY21 domestic and international annually-appropriated (discretionary) programs below FY20 enacted levels. In doing so, the budget walks away from the bipartisan budget deal agreed to by Congress and the president last year. While the previously enacted bipartisan budget deal allocates a $5 billion increase for domestic and international annually-appropriated programs for FY21 above FY20 levels, the Trump budget would cut these programs by $51 billion below the agreement and $46 billion below FY20 levels, to $590 billion in base discretionary dollars. This equates to cuts of to 7 percent below FY20, or 9 percent when adjusting for inflation. By the end of the 10-year window projected in the budget, nondefense discretionary funding would be 38 percent below the FY20 level, after adjusting for inflation. The Center on Budget and Policy Priorities points out that under the President’s budget, domestic and international discretionary funding would shrink by 2030 to 1.6 percent of the economy, a level not seen since Calvin Coolidge was president nearly 100 years ago.
The cuts to mandatory programs include reductions over 10 years of $1 trillion to Medicaid and the Affordable Care Act subsidies, $182 billion to the Supplemental Nutrition Assistance Program (SNAP), $21 billion to the Temporary Assistance for Needy Families (TANF) program, and more than $75 billion to Social Security disability programs.
The budget includes a previously-endorsed plan for paid parental leave which would be paid for by parents “borrowing against” future Social Security benefits. While advocates have long favored paid family leave (both for newborn and adopted children and for other forms of relative caregiving), they do not support requiring parents to give up later retirement benefits in order to manage staying home with their newborns or adoptees.
On the defense side, the Trump budget sticks to the spending caps agreed to in the bipartisan budget deal for defense spending by proposing $69 billion for the uncapped Overseas Contingency Operations (OCO) fund, in addition to the capped funding of $671.5 billion for defense spending for FY21, leading to a total defense-related budget allocation of $740.5 billion. The Trump budget would increase Pentagon spending each year through FY25, and then hold it flat through FY30 at $808 billion. Despite five years of flat spending (unrealistic if the past is any guide), military spending would still have risen about 15 percent over 10 years, adjusted for inflation.
The budget also relies on what many experts believe to be unrealistic expectations for economic growth, giving it a rosier scenario than most economists would predict for revenues and deficits.
While the President’s budget as a whole does not move through Congress or become law, it is a statement of priorities from the White House. As CHN’s statement notes, “President Trump calls his proposal, ‘A Budget for America’s Future.’ But the future he envisions is bleak indeed. He proposed less health care, less food for Americans in need, large cuts to Social Security disability benefits, and other harmful cuts, ranging from affordable housing to heating and cooling assistance to student loans and so much more.” Even as some members of President Trump’s own party reject his budget, some proposals it contains are ones advocates have seen before from previous GOP budgets and legislation, and they may be a sign of proposals to come in future budgets and spending bills. Moreover, the Trump Administration is intent on implementing some of its restrictive policy proposals, such as cutting and capping Medicaid funding and inserting harmful work reporting requirements, through rule changes they assert do not require Congressional action. Advocates have committed to fighting proposals like these that will harm low-income families and individuals.
A note on budget terminology: throughout these articles, you will see references to the two main categories of federal spending: “discretionary” and “mandatory.” Discretionary spending refers to those programs that require annual appropriations by Congress. Most defense, education, and housing fall into this category, plus many social service, environmental and community development programs. Mandatory spending includes programs like Social Security, Medicare, Medicaid, SNAP/food stamps, Temporary Assistance for Needy Families, and other basic safety net programs that do not require annual appropriations. Instead, Congress authorizes the way they spend money by legislation. Congress can cut or expand these programs by amending the legislation that authorizes them.
CHN’s FY21 Budget and Appropriations resource page is constantly updated with helpful resources and analyses of the Trump budget from many expert organizations, including resources on health, nutrition, housing, fair revenues, and more. The Coalition on Human Needs also hosted a webinar on President Trump’s budget on Feb. 13; a recording of the webinar will be added to the resource page as soon as it is available.
For more information on congressional FY21 budget and appropriations work, see the January 28 Human Needs Report. Stay tuned to upcoming Human Needs Reports for additional analysis of as the FY21 federal budget and appropriations process moves forward.