President Trump has promised to be a champion of people left behind by the economy. However, his budget takes aim at the very programs that serve them. In fact, all of the cuts come from the Non-Defense Discretionary spending area of the federal budget. This part of the budget funds key priorities like job training, education, affordable housing, and basic supports for children, families, and the aging. It also includes funding for border security, veterans' benefits, and the FBI, but since Congress is unlikely to cut these areas, programs that help workers and families would be particularly hard hit.
Trump’s budget proposal, entitled “America First: A Budget Blueprint for Making America Great Again,” would not, in fact, help the communities in our nation and in our state thrive. Here are five ways Trump’s budget proposals would hurt Washington state and its residents:
1. Shifting costs to our state government and making it harder to balance the state budget: Federal grants make up almost one third of the Washington state budget. (See chart below.) They pay for things like education, human services, the environment, and statewide emergency response. The budget proposal would cut federal grants to states, which would leave our state on the hook for $458.6 million per biennium to maintain these services. (That is not even taking into consideration the $2.5 billion our state would have to cover if the proposed repeal of the Affordable Care Act and cuts to Medicaid go through).
2. Making it harder for people to make ends meet: President Trump’s proposed budget would eliminate the Low Income Energy Assistance Program, which helps people who don’t have enough money to pay their light and energy bills to keep the lights and heat/cooling on. This program – which largely serves people with low incomes and the elderly – would provide $113 million to the state in the 2017-2019 biennium. Trump’s budget would also eliminate the Weatherization Assistance Program, which provides roughly $8.6 million per biennium to the state to help people with lower incomes weatherize their homes to save on energy bills.
3. Making it harder for parents to care for their kids: Many working families rely on before- and after-school programs to not only provide educational and enrichment opportunities for their kids, but also to ensure that kids are well-cared for while they work. Trump’s budget proposal would eliminate the 21st Century Community Learning Centers program. This program would provide $36.1 million for before- and after-school programs in Washington state in the next biennium. Eliminating the program could mean nearly 18,000 state children would lose educational, recreational, and enrichment programs outside school hours.
4. Making it harder to get a living-wage job: Whether you are a young person just starting out or you’ve been laid off and are back in the market, job-seeking is a daunting task. The Workforce Innovation and Opportunity Act (WIOA) provides support to help eligible job seekers get education, training, and support services to succeed in the job market. WIOA grants to Washington totaled $137.5 million between 2015 and 2016. The Trump budget proposes cutting WIOA grants to states by 35 percent, which would mean the state would either need to come up with an additional $48.1 million in funds to cover the federal losses or serve 59,000 fewer people with job search and training support in the next biennium.
5. Making it harder to get affordable housing: Washington state is in the midst of a homelessness crisis. Homelessness increased 15 percent in 2015 and again by 7 percent in 2016. The Trump budget slates the HOME Investment Partnerships Program, a federal grant program to states to build affordable housing, for elimination. This program provides Washington state with about $38.1 million per biennium to issue to developers to build affordable housing units. Washington also stands to lose funding for Housing Choice Vouchers. These vouchers are an important tool in combating homelessness and providing people with low incomes with assistance to get housing in the rental market. In 2015, more than 50,000 Washington families had a roof over their heads thanks to this important program. Trump proposes to fund the vouchers at $1.7 billion below the amount necessary to maintain the current number of vouchers nationwide. That could mean big cuts to the number of households getting rental assistance in Washington.
And this is barely scratching the surface in terms of the cuts that the Trump budget is proposing.
President Trump’s budget proposal may have a difficult time clearing Congress. However, it represents a stark vision of what it would look like if Congress chooses to pursue a budget along similar lines: dramatic increases in military spending paid for with deep cuts to services and programs that help states support families, individuals, and workers. And again, this whole budget proposal is in addition to the dramatic cuts Washington state could be facing with the potential loss of ACA and Medicaid.
Elena Hernandez & Lori Pfingst -House Budget Chair Paul Ryan’s new anti-poverty proposal doesn’t reflect reality and would have damaging effects for Washington state’s low income children and families. On Tuesday, we highlighted data from the 2014 KIDS COUNT Databook demonstrating that kids in our state continue to see declines in economic well-being, making this new proposal all the more concerning.
Under Chairman Ryan’s proposal, all federal safety net programs (including rental assistance, Supplemental Nutrition Assistance Program (SNAP), and Temporary Assistance for Needy Families (TANF)) would be rolled into a single block grant provided to the states, misleadingly called an “Opportunity Grant.” This fixed funding structure would prevent safety net programs from being able to respond to increases in need.
History has shown that block grants, which provide a fixed amount of funding, regardless of changes in need, stifle the ability of safety net programs to achieve their main goal of mitigating the impact of economic hardship on children and families.
The difference in how TANF, funded via a federal block grant, and SNAP, an entitlement program, responded during the recession is illustrative of the problem with Chairman Ryan’s proposal. The fixed funding structure of TANF was unable to respond to rising need in Washington state during the recession. The figure below illustrates that while poverty rates for children and families continued to climb following the recession, the proportion of low income and poor children receiving TANF declined. In 2008, for every 100 kids living at or below the poverty line, TANF provided support to nearly 40. By 2012, that number declined to just 28 out of 100 kids. In contrast, SNAP, with its more flexible funding structure, was able to react to increased demand during the recession (see figure below). In 2008, SNAP provided support for roughly 45 out of every 100 low income Washingtonians. The proportion increased to about 67 out of every 100 low income Washingtonians by 2012.
The Center on Budget and Policy Priorities warns that Chairman Ryan’s proposal to combine all of the safety net programs into one block grant would pit these important programs against one another, leading to cuts for basic assistance programs that have historically performed well, like SNAP (read more here). According to CBPP, restructuring funding into block grants will lead to reduced federal funding over time as it becomes increasingly challenging to identify need within these programs. Our analysis of the 2014 KIDS COUNT Databook illustrated that kids and families in Washington continue to see declines in economic well-being. Paul Ryan’s plan would only serve to intensify these issues. In order to put our economy back on track, we need policies that reflect reality and tackle systemic poverty by ensuring meaningful pathways to opportunity.
As negotiations begin between the White House and Congress to avoid default and re-open the federal government, the shutdown drags on. It’s claiming more victims and stalling a fragile economy that’s still in recovery mode. In Washington state, just as across the country, the absence of a 2014 federal budget has hindered home purchases, left workers without pay, cut off loans to small businesses, and crippled the tourism industry. A prolonged shutdown could have an even more devastating impact.
Many are currently being impacted by furloughs and delays in benefits:
- Unemployment benefits: Unemployment benefit payments are delayed due to staff furloughs at the Employment Security Department and an increase in demand from federal workers who have also been furloughed.
- Veteran services: Training, employment services, and assistance to help veterans connect to other benefits ended as veteran specialist staff have been furloughed.
- Federal employee furloughs: All federal employees who do not perform a job that is essential to the safety of life or property will go without pay for as long as the shutdown continues.
If the shutdown continues, the impact will become even more widespread. Some of the services currently available have funding that is time-limited:
- Food assistance for families (SNAP): Under the 2009 Recovery Act, funding for food assistance to families received a boost until November 1, 2013. Without new funding authority, all food assistance to families will be terminated at the end of October.
- Nutrition assistance for Women, Infants, and Children (WIC): Services are currently being provided with funding from the prior year as well as contingency funds. But that will only last for a little longer. If the shutdown continues into November, it is expected that WIC services will end for Washingtonians.
- Child care for working parents: Working parents with low incomes (not participating in WorkFirst) will lose assistance to help them afford child care at the end of October, jeopardizing their ability to remain at their jobs.
The effects would be catastrophic if the federal government remains shutdown for an extended period of time. The role of government in our lives cannot be understated: the safety of our food, prevention of disease, maintenance of roads and bridges, and education of our children are things we all rely on. A spending agreement is necessary to protect our health and safety and keep the economy intact.
Note: this is not an exhaustive list of all the impacts of the federal shutdown
The sequester would have a devastating impact on Washington state's already fragile economy, and further compound the challenges facing the state legislature as they try to address our revenue shortfall.
The White House released new state-by-state report today on the devastating impact the sequester.
Here are just some of the cuts that will hurt Washington state this year:
- Teachers and Schools: Washington state will lose approximately $11,606,000 in funding for primary and secondary education, putting around 160 teacher and aide jobs at risk. In addition about 11,000 fewer students would be served and approximately 50 fewer schools would receive funding.
- Head Start: Head Start and Early Head Start services would be eliminated for approximately 1,000 children in Washington state, reducing access to critical early education.
- Protections for Clean Air and Clean Water: Washington state would lose about $3,301,000 in environmental funding to ensure clean water and air quality, as well as prevent pollution from pesticides and hazardous waste. In addition, Washington state could lose another $924,000 in grants for
fish and wildlife protection.
- Military Readiness: In Washington state, approximately 29,000 civilian Department of Defense employees would be furloughed, reducing gross pay by around $173.4 million in total.
- Job Search Assistance to Help those in Washington state find Employment and Training: Washington state will lose about $661,000 in funding for job search assistance, referral, and placement, meaning around 24,510 fewer people will get the help and skills they need to find employment.
- Child Care: Up to 800 children could lose access to child care, which is also essential for working parents to hold down a job.
Full detail on the impact to Washington state can found be here.
A number of important federal tax policies are set to expire at the end of the year, and the decisions Congressional leaders make will have far-reaching impacts for all Washingtonians.
One is the federal estate tax, which is currently paid by only the wealthiest 0.3 percent of estates nationwide. In 2010, Congress agreed to a temporary extension of the estate tax rules enacted under the Bush Tax Cuts of 2001 and 2003. If those rates are extended permanently, as some have proposed, the federal budget deficit would grow by $141 billion over ten years according to a new report from the Center on Budget and Policy Priorities. This is significant revenue that could be used instead to support job creation efforts and help provide long-term budget stability. In Washington State, 110 estates – only extremely wealthy residents – would benefit from the extension.
Congress will also consider extending improvements made to three tax credits that benefit millions of working families. As part of the same legislation that approved the temporary estate tax cut, important improvements were made to the Earned Income Tax Credit, the Child Tax Credit and the American Opportunity Tax Credit. These credits provide critical support to 25 million families, giving workers with kids a significant boost to their incomes and making college more affordable for middle class Americans. If Congress fails to extend these measures 246,432 working families in Washington State will lose out on key benefits that help build long-term economic security and expand opportunity.
As many Washingtonians continue to struggle to make ends meet in the slow economic recovery, the choices before Congress are clear. It would be fiscally irresponsible to continue estate tax rules that benefit only a handful of the wealthiest Americans at the expense of pressing national priorities. Congress should extend the improvements to three proven tax credits. Failure to do so would harm our fragile recovery and threaten the economic security of thousands of Washington families.
You can find the full report from CBPP here.
In our health reform series, we detailed how the Medicaid expansion in 2014 will extend coverage to more than 330,000 uninsured Washingtonians. When the U.S. Supreme Court ruled that it was optional for states to expand Medicaid to low-income adults, critics quickly emerged claiming that the expansion would be cost prohibitive for states. A report released today by the Center on Budget and Policy Priorities shows that the opposite is true: the Medicaid expansion is extremely financially favorable for states.
- The federal government will pick up 93 percent of expansion costs over 2014-2022 (see graph below). For the first three years, 100 percent of the costs will be assumed by the federal government for those newly eligible. Support will gradually decline to 90 percent in 2020 and thereafter.
- Additional costs to the state represent a 2.8 percent increase in what would have been spent on Medicaid from 2014 to 2022 without health reform. This estimate takes into account participation among those who are currently eligible for Medicaid but not enrolled. These enrollees would be covered at the standard matching rate of 50 percent, rather than the 93 percent average federal match for those newly eligible. Critics have cited participation among this group as a financial burden to states. As the estimates show, this is simply not the case.
- Further savings will be realized by states. By sharply reducing the number of people without health insurance, the Medicaid expansion will ease cost pressures on states from uncompensated hospital care, mental health care, and other health care services.
Read the entire report for more information.
This morning, the US Supreme Court upheld the Affordable Care Act, putting quality, affordable health care securely on the horizon for hundreds of thousands of Washingtonians. Beginning in 2014, more than 800,000 people without health insurance can gain coverage, reducing the number of uninsured by 74 percent.
While the court upheld the law in its entirety, it ruled that states are not required to expand Medicaid, a key provision of the law. But it would be foolish for policymakers not to move forward with expansion. This provision alone would expand coverage to an estimated 330,000 people in 2014 and would be fully funded by the federal government for the first three years.
Continued implementation of federal health care reform will ensure access to quality, affordable health care for all Washingtonians- key to creating a healthy workforce, reducing overall costs, and helping children do better in school.
Read our series on the impact of health reform in Washington state here.