There is an apt observation about government budget-making: They are the clearest way to see priorities. That makes sense of course. After all, when it comes to public spending, there are unlimited demands and limited funds. Balancing the needs of society with the available resources is the centerpiece of rational governmental budget-making.
This month, the President and the Congress have hammered out two deals that would drastically impact funding for federal programs: budget reconciliation and rescission plans.
With that in mind, the recently approved federal budget reconciliation and rescission legislation, advanced by President Trump and approved by both houses of Congress, makes clear where their priorities lie.
The budget reconciliation agreement is the one that has the broadest impact, both in terms of the nation’s finances as well as the effect on individual Americans.
The reconciliation legislation, dubbed the “One Big, Beautiful Bill,” covered a lot of issues. The ones that received the most attention are the changes to Medicaid (health insurance for the poor) and SNAP program (subsidies to purchase food for the needy), the elimination of federal spending on climate programs, as well as increasing the nation’s debt ceiling to $5 trillion.
The changes to Medicaid will have a dramatic impact. According to estimates, as many as 11.8 million Americans (including 1.5 million New Yorkers) will lose their health coverage. The changes in the program create new obstacles for beneficiaries, many of whom will end up dropping out due to the new requirements and the difficulty of submitting necessary information.
Moreover, the impacts go beyond those affecting people – hospitals, particularly rural ones – will feel it as well. A recent report estimated that as many as one-third of all rural hospitals in the country are at risk of closing due to financial distress, including 29 New York hospitals.
The Supplemental Nutrition Assistance Program (SNAP) serves 42 million Americans and is the government’s effort to combat hunger in the country. Yet the legislation approved earlier this month will result in the biggest cut in its history.
A recent analysis of the changes concluded that 22.3 million American families would lose some or all of their SNAP benefits. Among these families, 5.3 million would lose at least $25 in SNAP benefits per month, and most of them would be working families and families with children.
Of course, other items were included as well. These items touched on subjects like new fees for those applying to immigrate. Immigrants will now have to pay a $100 fee to apply for asylum and a $500 fee to apply for temporary protected status, which only applies to those unable to return to their home country due to “extraordinary and temporary conditions,” such as an armed conflict, environmental disaster or epidemic.
Major changes were made to federal student loans. Loans for graduate school will be capped at $20,500 per year and $50,000 per year for professional degrees.
There are tax cuts for the purchase of gun silencers and short-barrel rifles, which will result in an estimated $1.7 billion loss in tax revenue. From now on only machine guns and “destructive devices” like bombs and missiles are federally required to be taxed $200 and undergo more intensive background checks and waiting periods.
The federal changes contain changes to, or elimination of, the majority of clean energy tax credits that were passed in the Inflation Reduction Act (IRA). Climate researchers at Columbia University estimate that up to $9.65 billion of the $62 billion appropriated in the IRA will be rescinded.
Funds for building coastal management, monitoring air pollution and reducing it in schools, reducing the impact of climate disasters on low-income communities, collecting data on greenhouse gas emissions, and standardization of corporate climate action commitments are all under threat of being revoked.
And the rescission package that passed last week eliminated federal governmental support for public broadcasting and its educational programming, clawing back funds previously approved by Congress.
Yet, the effort to reduce spending was not about reducing the nation’s debt; the legislation increases it and does so massively. According to the Congressional Budget Office, the nation’s debt would increase by $3.4 trillion over the next decade. Moreover, the benefits of the changes go overwhelming to the wealthiest Americans, increasing the tax burden for the poorest while enhancing the incomes of the richest.
Sensing the widespread opposition of the nation to this legislation, the “spin doctors” are hard at work to change the narrative. For example, the Vice President is talking up aspects of the changes that are more popular, such as its creation of a $1,000 savings accounts for newborns.
Yet, there can be no denying the priorities of the Congress and the President: eliminate health coverage for millions, deny access to food for many in need, reduce efforts to combat the climate crisis, while piling on more debt to pay for tax cuts to the wealthy.
We’ll get a clearer picture of whether those priorities match the public’s next Fall.
Blair Horner is senior policy advisor with the New York Public Interest Research Group.
The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.
