The “Oligarch’s Budget” Wages War on Poor Americans

Early on Thursday, Republicans passed Donald Trump’s “one big, beautiful bill” in the House of Representatives, with just two GOP defectors. The budget codifies trillions of dollars of tax cuts for the wealthy, alongside hugely increased spending on immigration enforcement and the military, both by adding to the national debt and through slashing programs that aid tens of millions of low-income Americans. The Center for American Progress noted last week that, with somewhere in the region of $1 trillion in cuts to Medicaid and SNAP (food stamps) over the next decade, “this would be the largest transfer of wealth from the poor to the rich in a single law in U.S. history.”

The budget, which seems likely to pass the Senate, contains the biggest ever cuts to Medicaid and to the SNAP program. As a result of these cuts, tens of millions of people will be impacted — as will states that depend on Medicaid dollars flowing in order to cover their poorer residents, and as will hospitals that need Medicaid funds in order to make ends meet. Ironically, some of the worst-hit areas will be in poor parts of red states, where rural hospitals often survive only because of their Medicaid dollars.

In poorer neighborhoods, the erosion of SNAP will mean much less money flowing through the local economy, as residents tighten their belts and spend less on food at neighborhood stores. For the first time in the program’s history, the federal government will no longer ensure that children in all 50 states have access to food stamps.

The bill imposes strict time limits on food stamp access for working-age adults through the age of 65, as well as work requirements, and makes it harder for states or localities to secure waivers from that requirement during economic downturns. At the same time, it requires working-age adults to have jobs or do community service in order to access Medicaid — and it ramps up the frequency of eligibility checks, which health advocates believe will create a red tape burden that has the effect of deterring large numbers of people from accessing or retaining health care.

If these changes do indeed kick in, estimates are that a staggering 14 million Americans could lose their health coverage, returning the numbers of uninsured back up almost to pre-Affordable Care Act levels. The Urban Institute and other groups have estimated that somewhere in the region of 3 million families could be cut off from food stamps.

On health care, the budget contains one poison pill after the next — including penalizing states that have used their own dollars to expand Medicaid to cover undocumented immigrants and forbidding any reproductive health care organization from receiving Medicaid funds.

But the damage that this budget will do to poor Americans goes far beyond these two core parts of the safety net system. Pick pretty much any policy that has benefited low-income Americans in recent years, and this budget takes a chainsaw to it.

The bill will, for example, eliminate, in its entirety, the Low Income Home Energy Assistance Program (LIHEAP), which provides subsidies to almost 6 million households so that they can stay warm in winter and cool in summer. This will, in effect, reduce poor families’ incomes in many states by thousands of dollars per year.

It will jack up the repayment expenses for student loans, and will eliminate the ability of borrowers to temporarily pause repayments in the face of economic hardship or unemployment. It will end the program that subsidizes student loans for students who are still in college — meaning that, if it passes, beginning next year these borrowers will have to pay interest on their debt even while still enrolled in classes. And it will restrict access to the Pell Grant by requiring students to be enrolled in more classes to qualify than is currently the case. Estimates by advocacy groups suggest many student loan borrowers could see their monthly payments soar by hundreds of dollars.

The bill makes it harder for kids to access free school meals and summer EBT cards to tide them and their families over during the school holidays.

It tightens up eligibility for the child tax credit, with the result that 4.5 million fewer children will qualify for this benefit. It guts clean energy programs, eliminates most tax credits for low-emission energy sources and ends tax credits for the purchase of electric vehicles. Given that the impacts of climate change fall disproportionately on poorer people, all of these cuts will have a particularly harmful impact on low-income Americans.

Go down the list, and the consequences of this budget for the poor are devastating. Sure, there are gimmicks — such as ending taxes on tips, and giving tax breaks for the interest paid on car loans — that will put a bit more cash in the pocket of the poor and income-insecure. But these small plusses will be more than cancelled out by all the losses that this legislation stacks up against poor people — and also people higher up the income chain. In fact, unless you’re a very wealthy American, this is a bill that will ultimately leave you and your community worse off and far more vulnerable to shifts in the economic winds.

Taken as a whole, this budget is an assault on the well-being of low-income Americans that has virtually no precedent in U.S. history.

In 1909, the British Parliament ushered in that country’s age of the social safety net with what the liberal government grandiosely termed a “people’s budget,” intended to “wage implacable warfare against poverty and squalidness.” One hundred and sixteen years later, Congress is poised to pass what might be termed the U.S.’s “oligarch’s budget,” one that wages implacable warfare not against the conditions that generate poverty but against the poor themselves. And for what? Not for any high ideals or noble causes. Not for some grand cultural renaissance or vital public project. No. This budget is one great gift bag, wrapped in a pretty bow, for U.S. oligarchs, for its old military-industrial complex, and for its new immigrant-hunters.