First, Obamacare may be toast. By rolling back the Medicaid expansion and ending private subsidies, Republicans would almost certainly send the uninsured rate back up to Bush-era levels. In the last six years, the number of uninsured families living around the poverty line fell by almost 50 percent. Those gains would be reversed, and more than 20 million people, many of them just above the poverty line, could suddenly lose access to health care.
Second, Trump’s proposed tax cut will be one of the largest ever, possibly reducing federal revenues by more than $6 trillion in the next decade. His plan is in line with tax cuts envisioned by House Speaker Paul Ryan. Although taxes would be cut at every level, “the highest-income taxpayers would receive the biggest cuts, both in dollar terms and as a percentage of income,” according to the Tax Policy Center. The richest 0.1 percent of the country would save, on average, more than $1 million.
What does that have to do with the poor? Well, the massive size of the proposed Trump tax is significant, because House Republicans are also calling for a balanced budget. Mathematically that means that the GOP will be on the lookout for $6 trillion in spending cuts over the next decade. And Trump has essentially declared more than half the budget off-limits for cuts, since he wants to grow the military and preserve Social Security and Medicare.
With protective collars around defense and spending on the elderly, the rest of government spending would have to be bulldozed. This remainder is dominated by assistance for the young and poor. Medicaid would shrink, as might the Children’s Health Insurance Program. Food stamps would be cut. Federal unemployment insurance spending would fall, as would housing and energy assistance for the poor. The Department of Education would have to be gutted, taking federal student loans with it.
It’s not clear which of Obama’s economic policies would actually face elimination, because Trump has been so vague about his own plans, beyond Mexican walls and Chinese trade wars. In the absence of more details, one document that gives a sense of where things could go is Ryan’s grand plan “A Better Way.” This document is more thoughtful and potentially less draconian than Ryan’s previous budgets, which concentrated massive pain on the poor and the sick. But even this relatively kinder and gentler approach would still make it harder to be poor in America, by cutting welfare and health insurance payments to the poor in order to balance the budget while financing a historic tax cut for the wealthy. If President Obama was a throwback to the programs of the 1960s, this could be a throwback to the 1950s.
I once wrote that the U.S. president’s relationship with the economy is more like the captain of a ship sailing through turbulent waters rather than the bow-to-stern engineer. Presidents cannot slide the economy to 4 percent growth, as if GDP were a thermostat bar. But the government has great control over how growth is shared. For the last eight years, the Obama doctrine has put sharing at the heart of economic policy with a progressive plan to redistribute the country’s prodigious wealth to help low-income Americans of all ethnicities stay afloat in a period of severe inequality. Tuesday’s vote represents the repudiation of that economic policy, and the inauguration of a very different strategy. America is about to find out just how much a president matters to the lives of its citizens. For the poor, the stakes could not be any higher.