KY Policy Blog

Critical Investments in Kentuckians at Risk in U.S. House Budget

By Ashley Spalding
July 20, 2017

The House budget resolution that passed out of committee last night sets out a harsh framework over the next 10 years that would lead to deeply damaging cuts to many federal investments that help Kentucky families meet basic needs and support our economy. The budget proposes cutting federal entitlement programs by $4.4 trillion over 10 years — including Medicaid and Medicare and income assistance programs such as SNAP food assistance. Also in the resolution are big cuts to Non-Defense Discretionary (NDD) programs that help to improve Kentucky’s economy and quality of life, including by funding improvements in education and economic development opportunities.

With its deep cuts to basic assistance, health programs and core investments in our economy combined with tax cuts to benefit the wealthy, the House budget resolution is broadly very similar to President Trump’s budget proposal.

In addition, the budget plan contains an immediate threat to begin implementing these cuts while making room for enormous tax cuts that will benefit the wealthy. The proposal would use the reconciliation process to fast-track at least $203 billion in cuts to entitlement programs that benefit many low-income Kentuckians and our communities.

Proposed Budget Deeply Cuts Programs that Help Low-income Kentuckians Meet Basic Needs

The House budget plan would cut $4.4 trillion over the next decade from entitlement programs, a category that includes Medicaid and Medicare, basic food assistance, income assistance for working poor and other struggling families, and assistance for students to go to college. These cuts would make it more difficult for Kentuckians to afford food, housing, health care and a college education.

Here are some of the programs that are at risk for cuts:

Medicaid & Medicare

Medicaid is a cornerstone of our system of health care coverage, providing 1.4 million Kentuckians access to important preventative services, substance abuse treatment, care for chronic conditions and more. Overall funding for “Medicaid & other programs” (the category listed in the budget materials) would be cut by $1.5 trillion over the decade.

Medicare provides health insurance to people ages 65 and over as well as to younger people with disabilities. The programs helps pay for health care services including physician visits, hospitalization, prescription drugs, skilled nursing facility care, home health care and hospice care. The House resolution proposes to cut Medicare by $487 billion over the decade. In 2015, 826,296 Kentuckians were insured through Medicare.

Income Assistance

While the budget lacks sufficient detail to determine the precise level of cuts in many programs, the resolution indicates cuts to income assistance programs that help Kentuckians — which include SNAP food assistance and could include Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC).

  • SNAP: The Supplemental Nutrition Assistance Program (SNAP), formerly known as “food stamps,” helps low-income Kentuckians afford basic food needs, and boosts the economy during downturns when more people become eligible. The House resolution proposes $150 billion in SNAP cuts over 10 years, more than 20 percent of the SNAP budget. In February 2017, 651,889 Kentuckians (308,453 households) were receiving SNAP.
  • SSI: This program provides income support for individuals who are disabled or elderly and have little income and few assets. As of December 2016, there were 180,613 Kentuckians receiving Supplemental Security Income (SSI) benefits. Of those, 58 percent are women and 61 percent live in rural areas.
  • TANF: Temporary Assistance for Needy Families helps low-income Kentuckians make ends meet. The majority goes to basic cash assistance (55 percent), and some goes to support work activities (13 percent) and child care assistance (18 percent). But the program is already stretched so thin that only 19 of every 100 families living in poverty receive any kind of cash assistance. As of January, there are 18,300 Kentucky families receiving cash assistance through TANF. This number includes 32,124 children and 7,778 adults earning an average monthly benefit of $101.33 per person.
  • EITC & CTC: The EITC helps raise living standards for low and moderate-income workers. The CTC helps low-income working families by offsetting part of the cost of child rearing. The EITC and the refundable portion of the CTC lift more people out of poverty than any other program besides Social Security. In 2015, 397,439 tax filers in Kentucky received $968 million worth of tax credits through the EITC program, an average of more than $2,436 per filer. In 2014, 280,000 Kentucky households received the low-income part of the CTC.

Student Aid

The House budget resolution includes deep cuts to the Pell Grant program — $80 billion over 10 years — which provides grants to low-income students attending college. In Kentucky in 2017, 102,360 students received Pell grants. The resolution also cuts federal student loans.

Fast-Track Process for Cuts

The budget resolution itself just provides a framework for spending in the future. But this year’s budget action includes an additional component that puts the entitlement programs at immediate risk for at least $203 billion of these cuts through the fast-track process of budget reconciliation. Through reconciliation, Congress is able to pass cuts with only a simple majority in the Senate (i.e., without any Democratic votes) using the same process that has been used recently to try to repeal and replace the Affordable Care Act.

Big Cuts to NDD Programs Would Severely Impair or Eliminate Core Public Services

Federal NDD programs improve Kentucky’s economy and quality of life in multiple ways — including by funding improvements in education, help for kids and families, healthier and safer communities, workforce and economic development and cultural enrichment opportunities. Kentucky currently receives approximately $2 billion a year in NDD funding.

In the House budget resolution, NDD programs are cut by $1.3 trillion over the next decade. Overall funding for this part of the budget has already fallen significantly since 2010 because of the Budget Control Act’s caps on discretionary programs and sequestration cuts. With the cuts in this budget proposal, by 2027 NDD funding would be 44 percent below its 2010 level, after adjusting for inflation.

Cuts Pave the Way for Tax Cuts That Disproportionately Benefit Those at the Top

It is important to note that at the same time the House is proposing these incredibly harmful cuts to such important programs, the resolution also includes tax cuts that would disproportionately benefit those at the top of the income scale and large, profitable corporations. The budget creates a fast-track process to enact these tax changes, which are in part dependent on the entitlement cuts as the budget calls for deficit-neutral “tax reform.”

A House vote on the resolution could happen as early as next week.

Click to see fact sheets on what’s at risk in all six Kentucky Congressional Districts

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