There are two things you should know about President Donald Trump’s recently released budget proposal: First, it would significantly boost funding for Homeland Security and the Department of Defense while cutting social services that could hurt millions of people living in poverty. Second, his budget is just a proposal for Congress, and it almost certainly won’t become law.
But just because Congress is unlikely to pass Trump’s budget as is doesn’t mean that the proposal is entirely meaningless. It will likely influence what Republican lawmakers choose to focus on during negotiations in Congress, and, more importantly, it offers a window into his priorities.
Trump’s budget proposal looks to cut a total of $163 billion, slashing funds for education, housing, and health programs. Many of those cuts would come from programs that help lower-income Americans, from youth job training to Federal Work-Study. The cuts don’t include Social Security, Medicare, and Medicaid — some of the country’s biggest programs and the cause of the most heated debate over welfare reform. That’s because the proposal is limited to discretionary spending, and programs like Social Security and Medicare are mandatory spending.
Trump knows that gutting programs like Social Security and Medicare would likely have major political consequences. He has promised not to touch those programs other than by tackling waste, fraud, and abuse, though these are often a pretense to deliver benefits cuts anyway. The new budget proposal emphasizes that he hopes to overhaul the social safety net without igniting a fierce backlash. He’s betting, in other words, that people just don’t care enough about these less flashy parts of the social safety net or about how aid is delivered to people in need.
Trump wants to change how aid is distributed
One of the departments that would see the deepest cuts under Trump’s budget is Housing and Urban Development, which would lose $33.5 billion. Most of that, about $26 billion, would come from significantly reducing funding for rental assistance programs — including public housing, vouchers, and housing for the elderly — and combining them under a single program. The budget also proposes introducing a two-year limit on rental assistance for able-bodied adults.
The proposal would not only put millions of people’s benefits at risk, it would also upend how federal rental assistance works entirely.
Right now, money for housing vouchers, for example, goes toward directly subsidizing people’s rents. The White House wants that money to go to block grants instead. That means the funding would go into a pool of money that can be used to fund various state or local housing programs, giving states more flexibility in how they choose to spend it, even if that means they won’t go toward directly helping with rents. So hypothetically, money that is today intended for housing vouchers could be used to fund a program to give developers incentives to build more housing. (And while it’s good to build more to lower the cost of housing in the long term, that shouldn’t come at the cost of taking away direct rental assistance that helps keep people housed.)
There is precedent for this kind of switch. In 1996, Congress passed a law to create Temporary Assistance for Needy Families (TANF), which replaced the old, New Deal-era welfare system known as Aid to Families with Dependent Children (AFDC). While the latter provided direct federal payments to people who qualified, TANF created a system of block grants, where states could allocate welfare funds as they wished.
At the time, the argument for this funding structure was that states needed more freedom to spend welfare funds. But the block grants resulted in states diverting funds away from basic cash assistance. According to the Center on Budget and Policy Priorities, states spend just over one-fifth of their TANF funds on basic assistance, instead directing resources toward, in some cases, unrelated programs like funding tax cuts.
As Peter Germanis, who worked on welfare reform in the Reagan administration, put it: “When it comes to the TANF legislation, Congress got virtually every technical detail wrong,” Germanis wrote. “Congress gave states too much flexibility and they have used it to create a giant slush fund.”
By turning the federal government’s various forms of rental assistance into a single block grant program, the Trump administration might make it less likely for renters to receive the direct benefits they are entitled to, just as was the case with welfare reform in the 1990s.
That’s not to mention that the proposed budget cuts would be devastating to begin with. What renters need is actually the opposite of what Trump is proposing: more funding for rental assistance, not less. Federal rental assistance already helps lift millions of people out of poverty each year, but it doesn’t reach everyone who needs it, especially given the rise in housing costs.
Trump is targeting lesser-known programs
Another major cut that Trump is proposing is a program that helps families cover their home heating and cooling bills. His budget also includes a $4 billion cut to the Low-Income Home Energy Assistance Program (LIHEAP). Given that the LIHEAP budget is also around $4 billion, this essentially means that it’s seeking to eliminate the program altogether. The budget states that LIHEAP “is unnecessary” and alleges that the program is riddled with fraud.
LIHEAP, established in 1981, is one of those government programs that might not generate as much controversy as Social Security or Medicare, largely because it’s much smaller in reach and scale. But it’s a critical program that currently helps about 6 million families across the country. LIHEAP, along with the Weatherization Assistance Program, also helps cover the costs for home improvement projects, like wall insulation or furnace replacements, to make homes more energy efficient, especially in extreme weather conditions.
Eliminating this program could have catastrophic consequences for some families. “The stakes of this assistance can be life-and-death,” journalist Martine Powers wrote in the Washington Post last month. “Seniors are especially vulnerable to extreme temperatures. Getting electricity cut off for failure to pay bills can also be catastrophic for people with disabilities who depend on medication that needs to be refrigerated.”
Why this matters, even if it doesn’t become law
While LIHEAP has helped millions of families, it has also been underfunded, threatened by presidents of both parties, and doesn’t reach nearly as many people as it should. In fact, according to the National Low Income Housing Coalition, the program is only able to serve 20 percent of eligible households. Many eligible people also don’t know they qualify for the program and don’t apply for it.
Similarly, rental assistance programs help a lot of people stay housed, but they clearly aren’t reaching everyone they ought to, in large part because they’re underfunded. About half of renter households in the US are cost-burdened, which means they spend more than 30 percent of their income on housing.
Those are the kinds of issues that require real solutions, which would likely entail more funding, not less. But Trump’s budget underscores the problem that America’s social safety net constantly faces: Instead of looking for tangible fixes to improve programs like LIHEAP or housing vouchers, lawmakers often find ways to make them even harder to access, setting them up for failure. As I wrote in a previous issue of this newsletter, that was the case with public housing, which presidents and Congress routinely sabotaged before labeling it a failed experiment, even though they at times specifically designed it to fail.
And though Trump’s budget is not likely to become law — Republican Sen. Susan Collins, for example, said she has “serious objections” to Trump’s budget, including his targeting of LIHEAP — it shouldn’t be dismissed as a symbolic wish list. Even if Congress doesn’t deliver what Trump wants, these programs still won’t be safe. Just last month, for example, Trump abruptly fired the entire staff running LIHEAP, jeopardizing the delivery of heating and cooling assistance to families across the country.
So even if Trump’s budget never sees the light of day, here’s what you should keep in mind: It’s a blueprint for how his administration will hurt low-income families.
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