Trump will propose big cuts to safety net in new budget
WASHINGTON — President Trump’s first major budget proposal on Tuesday will include massive cuts to Medicaid and call for changes to antipoverty programs that would give states new power to limit a range of benefits, people familiar with the planning said.
The domestic budget cut will be proposed despite growing unease in Congress about cutting the safety net, they said. The budget for fiscal year 2018 will also call for cuts to the food stamps program, agricultural subsidies, and federal pensions.
With Medicaid, the state-federal program that provides health care to low-income Americans, Trump’s budget plan would follow through on a bill passed by House Republicans to cut more than $800 billion over 10 years.
The Congressional Budget Office has estimated this could cut off Medicaid benefits for 10 million people over a decade.
The White House also will call for giving states more flexibility to impose work requirements for people in different antipoverty programs, people familiar with the budget plan said, potentially leading to a flood of changes in states led by conservative governors.
Many antipoverty programs have elements that are run by both the states and the federal government, and a federal order allowing states to stiffen work requirements could have a broad impact in terms of limiting who can access antipoverty payments, and for how long.
Numerous social-welfare programs grew after the financial crisis, leading to complaints from many Republicans that more should be done to shift people back into the workforce. Shortly after he was sworn in, Trump said, “We want to get our people off welfare and back to work. . . . It’s out of control.”
Trump’s decision to include Medicaid cuts is significant because it shows he rejects calls from a number of Senate Republicans not to reverse the expansion of Medicaid that Barack Obama achieved when he was president as part of the Affordable Care Act.
The House has voted to cut the Medicaid funding; Senate Republicans have signaled they are likely to start from scratch.
When the White House released a partial budget plan in March, many lawmakers in both parties objected to cuts averaging 10 percent in the budgets for domestic agencies and foreign aid. Some cuts in the new version of the budget are also expected to be unpopular.
‘‘We think it’s wrongheaded,’’ said Representative Mike Conaway, chairman of the House Agriculture Committee, said when asked about looming cuts to farm programs.
‘‘Production agriculture is in the worst slump since the depression — 50 percent drop in the net income for producers. They need this safety net,’’ said Conaway, a Republican from Texas.
Congress must approve of most changes in the budget plan before it is enacted into law.
The March streamlined version of the budget plan dealt only with the 30 percent of government spending that is appropriated each year. In that budget, Trump sought a big increase in military and border spending combined with major cuts to housing, environmental protection, foreign aid, research, and development.
But Tuesday’s budget will be more significant, because it will seek changes to entitlements — programs that are essentially on autopilot and don’t need Congress’s annual authorization. The people describing the proposals spoke on the condition of anonymity because the budget had not been released publicly and the White House is closely guarding details.
In addition to cuts in Medicaid, the White House also is expected to propose changes to the Supplemental Nutrition Assistance Program.
SNAP is the modern version of food stamps, and it swelled after the financial crisis as the Obama administration eased policies to make it easier for people to qualify for benefits. As the economy has improved, enrollment in the program hasn’t changed as much as many had forecast.
An average of 44 million people received SNAP benefits in 2016, down from a peak of 47 million in 2013. Just 28 million people received the benefits in 2008.
Josh Archambault, a senior fellow at the Foundation for Government Accountability, a conservative think tank, said that giving states the flexibility to impose work requirements could lead to a raft of changes to programs ranging from Medicaid to public housing assistance. “One of the encouraging things about putting this in the budget is that states will see if it works,” he said. “States will try it.”
SNAP already has a work requirement, which typically cuts benefits for most able-bodied adults who don’t have children. But states were given more flexibility during the recent economic downturn to extend the benefits for a longer period, something that split conservatives at the time.
Many critics have said work requirements can include blanket ultimatums that don’t take into account someone’s age, physical or cognitive ability, or limitations put in place by the local economy.
In March, the White House signaled that it wanted to eliminate money for a range of other programs that are funded each year by Congress.
This included federal funding for Habitat for Humanity, subsidized school lunches, and the US Interagency Council on Homelessness, which coordinates the federal response to homelessness across 19 federal agencies.
Trump’s budget director, former South Carolina representative Mick Mulvaney, said Trump did not want cuts to Medicare and Social Security’s retirement program in this budget
A key element of the budget plan will be the assumption that huge tax cuts will result in an unprecedented level of economic growth.
Trump recently unveiled the broad principles of what he has said will be the biggest in US history, and Treasury Secretary Steven Mnuchin told a Senate panel last week that these tax cuts would end up creating trillions of dollars in new revenue, something budget experts from both parties have disputed.
The tax cuts would particularly benefit the wealthiest Americans, as Trump has proposing cutting the estate tax, capital gains and business tax rates.