Blog: Republican Budget in the House would make drastic cuts to SNAP, Pell Grants, and Medicaid

Statement

The Republican budget that the House of Representatives will vote on Thursday seeks to balance the budget in 10 years. To reach the goal, the Republican proposal would cut spending by $5 trillion over the next decade. Nearly 70 percent of cuts in the Republican budget would come from programs that help low-income families, according to analysis from the Center on the Budget and Policy Priorities (CBPP).

These cuts would come from programs designed to prevent families from falling into deep poverty, hunger and homelessness. It also cuts funding for Pell grants that give students from low-income backgrounds the opportunity to go to college. The sections below outline the cuts in a few of those programs, including the Supplemental Nutrition Assistance Program, Medicaid, and the Federal Pell Grant Program.

Supplemental Nutrition Assistance Program

In 2012, the Supplemental Nutrition Assistance Program (SNAP), which helps low-income families buy groceries, lifted four million people out of poverty, according to the Census Bureau. About 70 percent of SNAP participants are in families with children, and more than 25 percent are in families with seniors or persons with disabilities. This nutrition assistance became a particularly important lifeline for families in the wake of the Great Recession when unemployment and poverty spiked and more and more people found it impossible to make ends meet.

But under the Republican budget, the SNAP program would face $137 billion in cuts over the next ten years, according to House Budget Committee staff,[1] on top of the cuts recently made to the program. The Republican proposal would turn the SNAP program into block grants for states, meaning states would get a fixed amount every year to provide nutrition assistance. With that fixed amount, states would not be able to respond to an increase of need, for instance, if there was a spike in unemployment or poverty. Block granting SNAP removes the safety net for millions of Americans who would face hunger in a future economic downturn.

To achieve the level of cuts proposed from block granting SNAP, the program would have to terminate eligibility, scale back benefits, or enact a combination of both. All of those options would have serious negative effects on families struggling to make ends meet. According to CBPP, if the cuts came only from scaling back eligibility, states would have to cut an average of 10 million people from the program each year between 2019 and 2024. If the enormous cuts came only from slashing benefits, states would have to cut an average of more than $40 a month for every single SNAP recipient in 2019 to 2024.

While the block grant would start in 2019, the Republican budget also includes other cuts that would hurt SNAP recipients immediately. It includes each of the draconian cuts proposed by the House of Representatives during the Farm Bill debate, which would immediately result in both benefit cuts and terminated eligibility for millions of families.

Medicaid

Medicaid is a program that helps low-income children and families and those with disabilities get access to health care. Researchers from the Kaiser Family Foundation have found that Medicaid increases access to care, improved adults' mental health, and eliminates catastrophic medical expenses that cause financial strain on families. This is a program that is proven to help struggling families who would almost certainly go without health insurance entirely.

The Republican budget would make Medicaid a state block grant program and cut $732 billion from the program over 10 years. Turning Medicaid funding into block grants would set an annual cap on the amount the federal government gives to states for Medicaid. While the cap would be adjusted for population growth and inflation, it would not factor in rising health care costs or economic downturns that may cost Americans health insurance they relied on from their jobs.

The pressure would be on cash-strapped states to make up the cost difference. The Congressional Budget Office found that the reduction in spending would mean that states would have to increase their spending on Medicaid, make considerable cutbacks in the program, or both. "Cutbacks might involve reduced eligibility…coverage for fewer services, lower payments to providers, or increased cost-sharing by beneficiaries -- all of which would reduce access to care," according to the CBO report.

The Republican budget would also repeal the Affordable Care Act, which expanded Medicaid, bringing the total cuts to Medicaid to $1.5 trillion. Those cuts account for 26 percent of the Republican budget cuts.

Higher Education Programs

The Federal Pell Grant Program provides need-based grants to millions of low-income students who want to climb the economic ladder and further their education. Pell grants cover about a third of public tuition and fees which lowers the cost of college for millions of low-income students. Pell grants have already been cut by $50 billion, but the Republican budget would further cut Pell grants by nearly $90 billion over ten years. Under the Republican budget, the maximum Pell Grant would be cut by $100 in FY2015 and would stay frozen at $5,730 over the ten-year window, even as the cost of higher education continues to rise. This means that every year, it will be harder and more expensive for low-income students to attend school.

Secondly, 88 percent of Pell recipients graduate with an average student loan debt of $31,000, well above the national average. Right now, subsidized student loans don't begin to accrue interest until students leave school, but the Republican proposal would eliminate the interest-free benefit for students. Under this proposed change, CBO projects that students will pay at least $3,800 more in accrued interest.

Finally, the Republican budget would eliminate Pell Grants for students who attend less than part time. That could put college out of reach for students who work or take care of their families. And by decreasing income-based repayment, borrowers will not have important protections to help them manage their student debt loads.

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