Reducing Federal Investments in Human Needs Hurts Us All
Issue Brief
June 2025
Download the Reducing Federal Investments in Human Needs Hurts Us All Issue Brief
The 119th Congress is considering passage of an agenda proposed by
President Trump to extend and expand tax cuts for corporations and
wealthy individuals. Currently, that looks like strip-mining health care
and food assistance programs by making the largest cuts to Medicaid
and the Supplemental Nutrition Assistance Program (SNAP) in history
and hiding their dangerous actions behind the mask of cutting federal
spending for the greater good. Congressional leaders in both chambers
are using a legislative strategy called “reconciliation” to accomplish their
goals, and if successful the equity gap will grow, creating lasting damage
and causing individuals, families, and communities to be left behind
without critical resources.
What is at Stake?
The bill includes sweeping cuts to social safety net programs and other
resources that support individuals and families across the country.
Medicaid and SNAP received some of the severest cuts while dramatic
changes to tax credit availability and student loan forgiveness options
contribute to fears of instability for the majority of Americans.
What is Reconciliation?
The reconciliation procedure is an optional process, that expedites the
drafting and passage of legislation focused on spending, revenue, and
debt limit laws. One primary hallmark of this process is in the Senate.
Reconciliation bills, limited to one session, are not subject to filibuster and
amendments must meet stringent guidelines. It requires only a simple
majority of 50 votes to pass a reconciliation bill rather than the 60 votes
usually required to pass legislation in the Senate.
The reconciliation process begins with adopting a budget resolution that
includes reconciliation instructions for individual committees. Then,
specific committees report legislation in response to the instructions. The
Budget Committee then pulls all responses together and reports the bill to
the full chamber.
From here the bill follows the well-known next steps in
which the bill is considered on the chamber floor, differences between
House and Senate chambers are resolved, and the bill is signed into law or
vetoed by the President.
Since 1980, this procedure has been used to pass 25 reconciliation bills
including deficit-reduction packages under President Reagan, the Bush tax
cuts in 2001 and 2003, amending the Affordable Care Act in 2010, the
Tax Cuts and Jobs Act from the first Trump Administration, and the COVID-19
relief package known as the American Rescue Plan Act of 2021.
In May, the House pushed their version of the budget reconciliation bill
through a rushed process—oftentimes in the late or early hours of the
day. The House voted to pass the bill in a razor thin margin of 215-214
with 215 Republicans voting yes, all Democrats voting no in addition to
two Republicans, and one member voting present. Two Republican
members did not vote.
The House sent their bill over to the Senate who used that version of the
bill to draft their own bill. Initially, there was hope that the Senate would
take a pragmatic approach that would balance the demands of their party
with the needs of individuals, families and groups. Unfortunately, the
Senate version differs very little from the House version and does nothing
to negate some of the worst harms laid out in the House bill.
Right now, the Senate is working with the parliamentarian to assess the
provisions in the bill that are outside the purview of the reconciliation
process. Once they have a version, they will send the bill to the floor for
a vote and will confer with the House on a version they plan to send to
the president. The timeline for these next steps is quick, with a vote by
the end of June and hopes to send the final version of the bill to Trump
by the 4th of July.
Medicaid
Republicans in the House passed nearly $800 billion in cuts to Medicaid,
the largest cut to Medicaid in history. Over eight million Americans could
lose their health care coverage and the health system as a whole would be
significantly impacted leading to limited access to less care. To pay for
these cuts, the following changes are made to the Medicaid Program;
- Repeal regulations that help children enroll in and maintain their
healthcare through access to Medicaid and the Children’s Health
Insurance Program (CHIP).
- Penalize states if they use state-only funds to provide coverage to
undocumented individuals by cutting the amount of money the federal
government pays for Medicaid expenditures, known as the Federal
Medical Assistance Percentage (FMAP). This retaliation would impact 33
states and Washington, D.C. for providing coverage to undocumented
immigrants or lawfully present pregnant women and children.
- Prohibit the use of federal funds to support provider-directed, medically
necessary surgical or medical interventions for transgender youth, and
prevent states from defining gender affirming care as an essential
health benefit so it cannot be paid for in any situation.
- Impose a job-loss penalty that increases paperwork burdens for
Medicaid participants while not increasing work participation.
- End Medicaid eligibility for many lawfully present, taxpaying immigrants
by requiring citizenship to access this program and other health care
resources from the Affordable Care Act.
Medicaid is a crucial investment in early childhood health and
development outcomes, and it also helps ensure more parents are
healthier and better able to care for their children. When parents have
coverage, their children are more likely to be covered and receive regular
health care screenings. With the reduction of investment in Medicaid,
providers, including clinical social workers will face a loss of resources and
jobs, creating an unprecedented gap in
critical behavioral health services.
States rely on federal investments for Medicaid to fund services that
communities need like keeping rural hospitals open and providing
essential services like behavioral health treatment, preventative care, and
prenatal care. Cutting Medicaid funding or reducing access will cause
irreparable harm to families.
SNAP
Many people are struggling to put food on the table and this bill takes
away nutrition assistance from the people who need it most.
According to
Feeding America,
47 million people, including 14 million children, in the
United States are food insecure. SNAP is a government nutrition
assistance program that provides food benefits to low-income families.
According to the USDA who is responsible for SNAP,“the program
supplements their grocery budget so that they can afford nutritious food
essential to health and well-being.” In fiscal year 2023,
SNAP served over
42 million people per month.
The reconciliation bill makes the largest cut
to SNAP in history—$295 billion—at a time when families are struggling
with the high cost of food. These cuts include a new proposal to shift the
cost of SNAP benefits to states—a move that could be devastating for
state budgets. Currently, 1 out of every 3 households participating in SNAP
have children under the age of 5, with these federal dollars keeping 4.5
million young children fed and healthy. Forcing states to take on more of
the costs for this program puts families in danger of losing this resource
completely as many states cannot support the program.
This proposal also imposes drastic work requirements—even as it has
been demonstrated that making it tougher for people to meet their basic
needs makes it more difficult for people to find work.
Participation in Medicaid and SNAP currently helps streamline access to
other resources
and clinical social workers would see the impacts of these
cuts firsthand when families lose access to free and reduced school meal
programs and
Special Supplemental Nutrition Program for Women, Infants,
and Children (WIC) programs
, further exacerbating nutrition deficiencies in
this country.
Families rely on SNAP to put food on their table and feed their young
children. Cutting off access to this program hurts the very families with
children the proponents of this bill say they are helping.
Tax Credits
The Budget Reconciliation bill is primarily a tax bill. When this process was
used in the midst of the COVID-19 pandemic, we saw major investments
into individuals, families, and marginalized groups. In 2021, the American
Rescue Plan Act expanded the Child Tax Credit (CTC), making it fully
available to families with low and moderate incomes—including families
of 17 million children who are frequently left out because their families
do not meet income thresholds. Now, the CTC will be denied to
one in
four
families that need it most. The proposed bill also excludes 4.5
million citizen and legal resident children from receiving the credit
because they are in families in which one or more parents do not have
a Social Security Number.
While the bill would increase the amount of the credit from $2,000 to
$2,500 for the next four years, it would only go to families who are
already eligible for the full credit including families making up to
$400,000 a year, who would get an extra $500 per child. The impact
will be felt more significantly by many children in non-white households,
children in immigrant families (including Dreamers), and those in families
headed by single mothers.
19.3 million people receive premium tax credits (PTC) that “provide
upfront financial assistance to help people afford the individual or family
health insurance plans offered in their state through the ACA
marketplaces.”
PTC help enrollees save an average of $700 by lowering
the caps on premium contributions and allowing people with incomes at or
slightly above the federal poverty level pay $0 for silver-level premiums.
In 2021, the PTC was expanded, allowing record coverage among Black
and Latino people and families with lower incomes as the uninsured rate
hit an all-time low. These credits are set to expire this year. The
reconciliation bill was the opportunity to extend them and keep millions of
people insured but sadly it allows the PTC to expire. Instead, this bill will
raise the rates of uninsured individuals and increase child poverty as more
than 2 million children will see food assistance to their families reduced or
terminated and all children will risk losing some or all of their healthcare
benefits depending on how states react.
Student Loans
If signed into law, the reconciliation bill will completely change federal
financial aid programs, the ways individuals repay their loans, increase
the cost of college for individuals, and reduce access. The proposed bill
eliminates federal Direct Subsidized student loans that do not accrue
interest while undergraduate students are in school. It also dramatically
reduces Pell Grants which support primarily non-white students from
low-income families who face food or housing insecurity. Cutting off
these loan programs would push many students to predatory private
lenders and may exclude students from higher education all together.
In the 2022-2023 academic year, the average cost of four years in an
undergraduate program, including books, tuition, fees, room, board, and
other expenses was between $27,100 for public institutions to $58,600
for private schools. The reconciliation bill sets a rigid lifetime cap on
undergraduate borrowing of $50,000. The proposal also places a
maximum cap of
$50,000 on parents for the Parent PLUS loans,
regardless of how many dependents they have. Additionally, the bill
eliminates the Graduate PLUS loan program that has helped close to
2 million current borrowers, including many social workers, afford
graduate school. All these caps harm borrowers who are Black, students
without a parent or guardian with good credit, whose parents are paid low
wages, and families juggling other responsibilities. The outcome for many
aspiring social workers and other individuals is severely limited access to
a college education and to the professions to which they are called.
For borrowers in repayment, their payments will increase. The bill
overhauls the existing federal repayment options by eliminating the Saving
on A Valuable Education (SAVE) Plan which currently has 8 million
individuals enrolled. These families will be forced to make immediate
payments on their loans. The Income-Contingent Repayment (ICR) plan
which has 1.2 borrowers enrolled will be moved to the less generous
Income-Based Repayment programs, and Pay As You Earn (PAYE) plan for
all 1.3 million borrowers, causing them to pay 15 percent of their income.
The bill eliminates all current Income-Driven Repayment (IDR) plans for
future borrowers, forcing them to choose between standard repayment or
the Repayment Assistance Plan which costs thousands more than all
current IDR plans. Student borrowers with or without a college degree will
see payment increases.
Making college more expensive not only impacts the future of the
workforce but also pushes the ability to achieve economic mobility and
growth further out of reach of millions of Americans.
Now that the House has passed this budget reconciliation package, the
Senate will begin their process in the coming days. While Congress
continues the rush to move this large-scale bill forward, many people are
struggling to put food on the table, grappling with health costs, dealing
with the high costs of student loan repayment and college, and other
hardships in an increasingly uncertain economy.
Take action now and fill out this action alert and help ensure Members
of Congress reject these misguided cuts. Cutting the programs that help
meet the basic needs of the poorest in our society should not be the
focus of this legislation.