With a narrow two-vote margin, Republicans in the US House of Representatives yesterday advanced an inhumane budget plan that would slash health coverage and food assistance for tens of millions of Americans to pay for tax cuts for the wealthiest people and most profitable corporations. Large cuts are also required of the committee presiding over the areas of education and workforce, including student loan assistance. If Congress ultimately follows this plan, many tens of millions of Americans—including hundreds of thousands of DC residents—will not receive the medical care they need, go hungry, and experience increased hardship, all so the rich get richer. DC leaders will need to do everything in their power to maintain economic stability for residents.
The cost of extending the Trump tax cuts of 2017 for the top 1 percent, equal to $1.1 trillion, is roughly what the budget resolution calls for in cuts to Medicaid ($880 million) and the Supplemental Nutrition Assistance Program (SNAP, $230 million), according to the Center on Budget and Policy Priorities (CBPP). The average tax cut for those in the top 1 percent is greater than the average annual family incomes of most of the households who get their health coverage through Medicaid.
House members look poised to actually cut $2 trillion from programs to allow for $4.5 trillion in tax cuts through the budget reconciliation process that is on the horizon. That amount includes extending the full $3.6 trillion in tax cuts adopted by Congress in 2017 during the first Trump administration and adding another $900 billion that likely will go to profitable corporations, increasing the budget deficit.
The stakes of such a stark redistribution of resources to wealthy people and profitable business are extremely high. Medicaid provides health coverage for 72 million people across the country, including about 271,000 residents in the District, nearly half of whom are children and older adults. If a final reconciliation bill slashes the federal matching rate for DC’s Medicaid program to 50 percent from 70 percent, as was suggested in House Republican’s leaked wish list of cuts, for example, the cost to the District could be more than $1 billion annually. Other proposals that Republicans have considered would cost even more. (DC’s higher matching rate is set in the National Revitalization Act, which acknowledged federal limits on DC’s taxing authority were hamstringing the District’s finances.) DC cannot absorb such a severe loss in federal funds without raising new revenue and, even still, would likely be required to make drastic cutbacks to the program to keep the District budget in balance.
Likewise, SNAP provides food assistance for about 42 million people across the country, including over $300 million annually in food assistance to 137,500 (or 1 in 5) people in DC. The lion’s share of these residents (79 percent) have incomes below the poverty line and the majority of them are in families with children or those with members who are elderly or have a disability. All of them struggle to get by in the District.
Beyond the harm to people, slashing federal health coverage, food assistance, and other programs will also harm DC’s economy as hundreds of millions to potentially billions of dollars are removed from circulation in our health care system and businesses like grocery stores. That kind of contraction likely would have ripple effects that also create job losses in the care sector and beyond, and would put more pressure on the District’s unemployment system and its revenues overall.
While the level of disruption and harm caused by these enormous federal cuts is daunting, Mayor Bowser and DC Council must do everything in their power to mitigate their harm. That includes asking wealthy residents and corporations that will see federal tax cuts to contribute more to DC’s shared resources to support health, housing, and economic security for DC’s most vulnerable residents.
