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Is Trump’s Budget an Attack on the Poor?

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eye on the news

Is Trump’s Budget an Attack on the Poor?

No—the administration’s cuts mark a return to sensible principles on welfare programs. March 5, 2020
Politics and law
Economy, finance, and budgets

Last month, the Trump administration rolled out its Fiscal Year 2021 federal budget request—and progressive critics howled. “Trump’s budget is a $292 billion attack on poor Americans,” Mother Jones alleged. Vox accused Trump of cutting Medicare and Medicaid and lying about it. Kentucky Democratic representative John Yarmuth claimed that Trump was proposing “deep cuts to critical programs that help American families” and “destructive changes to Medicaid, SNAP, Social Security.” The anger was mostly hot air because, as National Review’s Robert VerBruggen notes, the budget is “an irrelevant document that mainly serves to give political journalists stuff to complain about.”  

It’s still necessary, however, to dispel misconceptions. The supposed welfare cuts make up a set of uncontroversial reforms, including work requirements, limited access for unemployed immigrants, and changes to poorly designed programs. The administration’s welfare proposals would cut roughly $407 billion from the federal deficit over 10 years. The spending reductions would erase another $57 billion through 2030 by cutting the number of inefficient or redundant programs.

The lion’s share of the budget reduction comes from expected savings on work requirements. Able-bodied adults between 18 and 65 enrolled in the Supplemental Nutritional Assistance Program and Medicaid would be required to work, job-train, or look for work at least part-time. This change aligns SNAP and Medicaid with the Temporary Assistance for Needy Families program, at projected savings of $334 billion.

While derided by some on the left as “workfare,” work requirements enjoy broad public support. In a 2016 American Enterprise Institute/Los Angeles Times poll, 87 percent of respondents supported requirements, including 81 percent of low-income respondents. At that point, the Obama administration’s high rate of work-requirement waivers had swelled the SNAP-beneficiary rolls. As a result, many able-bodied adults now hold work exemptions designed for the Great Recession, not a booming economy with historically low unemployment and millions reentering the workforce. The Trump administration rightly believes that those who can work should do so.

The administration also expects to save $73 billion by requiring that tax filers have a valid Social Security number to claim exemptions such as the Child Tax Credit. This requirement would deny tax benefits to immigrants without work authorization. The administration argues that this change aligns with current standards for the Earned Income Tax Credit, and it has the added effect of reinforcing the “wall around the welfare state.” Welfare benefits would be reserved for citizens and working immigrants.

In addition to work requirements, the administration would impose sizable cuts to disability payments, including $10 billion from retroactive disability benefits, $8 billion from payment reductions per child to multiple-child disability-recipient households, and $2 billion from standardizing how Supplemental Security Income offsets payments from states. Regardless of the merits of such cuts, it’s worth considering the financial context: annualized, the reduction represents only about 1.4 percent of current SSDI spending.

Another $37 billion in cuts comes from targeting programs that the administration considers inefficient or poorly designed. The budget would eliminate the $16 billion Social Services Block Grant, a “flexible funding stream“ used by states at their discretion to fund various social services. The administration would dump the SSBG—as well as its $15 billion portion of TANF—because “it lacks strong performance measures, is not well targeted, and is not a core function of the Federal Government.” Similarly, it would cut TANF’s $6 billion “contingency fund,” which it claims isn’t well-targeted and can be spent without helping those in need.

Cutting SSBG is not a new idea. It appeared, for example, in budget resolutions floated by House Republicans from 2011 to 2019 and got backing earlier from the Bush administration for fiscal years 2007, 2008, and 2009. A similar logic applies to Trump’s cuts to SSBG and the TANF contingency fund: federal dollars transferred to states shouldn’t be a giveaway. Instead, they should come with a clear process by which the federal government can measure success.

This idea gets at the heart of the Left–Right debate on welfare cuts. To Trump’s critics, any cut, no matter how small, is tantamount to violence against the poor. But welfare must be sustainable, not just generous. Some of the smaller cuts are indeed questionable: do economies of scale really mean that homes with two or more disabled children need less money? But reasonable work requirements, from expecting a Social Security number for certain benefits to ensuring that programs are results-driven, aim for a welfare state that’s fair and charitable.

Photo by Sarah Silbiger/Getty Images

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