President Donald Trump’s first major budget proposal comes out on Tuesday, but many of the details are already public. The budget would reverse several of Trump’s campaign promises—like his pledge to preserve Medicaid and Social Security—by dismantling welfare for the poor and sick, while ensuring that rich Americans keep more of their income.
At this point, the proposal is just that—a proposal, and Congressional Republicans, some of whom have balked at the president’s blueprint, hold the power of the purse. But if followed, the plan would reportedly cut anti-poverty programs by $1.7 trillion over the next 10 years in an attempt to balance the budget, according to the The Washington Post and Axios. In addition to $800 billion in cuts to Medicaid—which comes directly from the House’s Obamacare replacement—the budget would also let states use “work requirements” to limit eligibility and spending on programs like SNAP (the Supplemental Nutrition Assistance Program, previously known as food stamps), CHIP (the Children’s Health Insurance Program), and Social Security Disability Insurance. There is little question that these policies would raise the number of uninsured Americans (the Congressional Budget Office’s estimates suggest by more than 20 million), expose more households to medical bankruptcy, and push more families into poverty.
Conservatives tend to support reforming welfare policies because they think that government programs trap families in a state of dependency, cutting them off from work and immiserating their children. In fact, research shows that the opposite is true. Several recent papers have found that the children of low-income mothers with access to prenatal coverage under Medicaid later had lower obesity rates, higher high-school graduation rates, and higher incomes in adulthood, and were less likely to receive welfare payments, like SNAP. Meanwhile, a Brookings analysis of SNAP found that 65 percent of mothers who receive the benefits would fall below the poverty line without the program. There is practically no question that reducing support for working parents by hundreds of billions of dollars will increase the number of children who grow up in poverty.
Tuesday’s proposal comes two months after the president released a so-called “skinny budget” previewing changes to discretionary spending, the 30 percent of government that is appropriated each year, unlike “mandatory spending,” like Social Security or Medicare. In that budget, Trump sought a big increase in military and border spending offset by cuts to science funding, the State Department, and environmental protection. The skinny budget was notable for shutting down some of the few economic programs that specifically help the Rust Belt and Appalachia, starving research universities of the funds that often power local innovation.
In short: Trump’s budget would almost certainly increase the number of uninsured Americans while hurting poor families, especially those that rely on government support in Appalachia and the Rust Belt. But that’s not all.
It’s critical to assess Tuesday’s budget along with the White House’s tax plan. Its centerpiece is a proposal to lower the tax rate on “pass-through” income to 15 percent. This change might seem like a middle-class tax cut, since most businesses are small pass-throughs, like small barbershops or sole proprietorships. But 80 percent of all pass-through revenue is actually taken in by the richest 1 percent of small business, which means a large rate cut for pass-through income turns out to be a windfall for the rich. According to the Tax Policy Center, the proposal “would add $2 trillion to the debt over the next 10 years, while distributing nearly all the benefits to the highest-income households.”
In the biggest picture, the Trump budget is a multi-trillion-dollar transfer of post-tax income from the poor and sick to the richest 1 percent. This not only explicitly reverses many of the president’s campaign promises. Even stranger, it represents an extraordinarily unpopular vision for government by a president who is obsessed with demonstrating his own popularity.
Trump is devoted to destroying the Affordable Care Act at a time when support for it is at an all-time high. Meanwhile, the replacement bill, which Trump has repeatedly praised, has an approval rating of just 21 percent. The White House’s proposal for a historic tax cut, one of the largest in American history, comes at a time when 77 percent of Americans are opposed to cutting taxes on the wealthy. Meanwhile, his budget dismantles parts of the welfare state. But in a recent NBC/WSJ poll, 57 percent of respondents said they want the federal government to do more to solve people’s problems—the highest level in the history of the poll, going back to 1995.
So, what, exactly is Trump thinking? A simple answer is: He isn’t. The president has never demonstrated a deep affection for the inner-workings of budgetary procedure or policy. He often seems at a loss to explain even the basic details of his own policies. As a result, perhaps he’s turned over budget-policy writing to traditionally conservative Republicans with a handful of guidelines—e.g., don’t cut Medicare, don’t cut defense spending—and decided that it’s easiest to simply support whatever they come up with, even if it’s a violation of his campaign promises.
But another reasonable interpretation is that Trump’s budget is simply a continuation of the con-artistry he’s practiced for decades. With Trump University, the president once promised thousands of older Americans that he could make them rich by imparting secrets gleaned from a successful career in real estate. But after a deluge of lawsuits accusing the university of being a fraud, a federal judge approved a $25 million settlement payment from the sitting president. Trump ran for office on a promise to drain the swamp, cut down the establishment, and return power to the downtrodden. In office, he’s taken little time to immerse himself in policy details while allowing Randian conservatives to dictate health-care and budget policy. There is no federal judge to affirm that the president has abandoned his campaign pledges out of indifference or ignorance, but the fraud is just as clear. Once again, the con is that he cared.
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