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House GOP Budget Just Another Extreme Giveaway to the Rich
The budget makes the Republican agenda clear: costly tax cuts for the wealthy and businesses, paired with deeply harmful cuts in programs and services for families and communities.
Feb 13, 2025
The House Republican budget released Wednesday by Budget Committee Chair Jodey Arrington is an extreme giveaway to the wealthy at the expense of families who already have a hard time making ends meet. It would raise families’ healthcare, food, and college costs; increase the nation’s economic risks; and worsen poverty and hardship for tens of millions of people, while doubling down on huge tax giveaways for wealthy households and businesses. This budget plan reflects a stark betrayal of U.S. President Donald Trump’s campaign promises to protect families who struggle financially.
The proposed budget’s reconciliation instructions—the directives to the tax-writing and other committees that set up a special fast-track process for passing budget and tax legislation—make the Republican agenda clear: costly tax cuts for the wealthy and businesses, paired with deeply harmful cuts in programs and services for families and communities. This is an upside-down plan that prioritizes the wealthy and well-connected over families for whom the cost of healthcare, college, and food is a serious concern. A reconciliation bill that meets the reconciliation directives to each committee would add trillions to the debt over the decade.
For weeks, House Republicans have been circulating proposals that would take health coverage and food assistance away from millions of people and raise the cost of student loans to offset part of the cost of extending the expiring 2017 tax cuts. Based on various proposals, 36 million people or more could be at risk of losing their health coverage through Medicaid, and more than 40 million people could receive less help from SNAP to buy groceries, millions of them potentially losing their food assistance altogether. About 5 million undergraduate students a year use federal student loans to pay for college, and many are at risk of higher costs to go to college given the cuts assigned to the Education and Workforce Committee. Millions of borrowers no longer in school could also be at risk for higher loan costs.
Extending the tax cuts for the top 1% costs $1.1 trillion through 2034, roughly the same amount they are proposing in cuts for millions who rely on Medicaid for health coverage and who use SNAP to buy groceries.
These aren’t just numbers. The loss of Medicaid means, for example, a parent can’t get cancer treatment, and a young adult can’t get insulin to control their diabetes. Cuts to food assistance mean a parent skips meals so their children can eat or an older person who lost their job has no way to buy groceries. These cuts will affect people in every state and of all races and ethnicities, but the impacts will often be especially severe in poorer states and among Black, Latino, and Indigenous people and people in rural communities, who have higher poverty rates and thus are more likely to qualify for food assistance and health coverage. Rather than expanding opportunity, the budget would make it harder for people to afford the healthcare and food they need to survive and succeed.
In addition to taking food assistance and health coverage away from people who need it, the budget plan could result in enormous cost shifts to state, local, territorial, and tribal governments, which are already facing tougher fiscal conditions than in recent years. And when they can’t meet those higher costs, the impacts on people and families will be severe.
All of this for what? To give tax cuts to high-income people for whom the cost of eggs or prescription drugs is at most an afterthought. The spending cuts required by the reconciliation instructions total $1.5 trillion, which is about the cost of extending the expiring tax cuts through 2034 just for those with incomes above roughly $400,000. Extending those tax cuts would give households with incomes in the top 1%, who make roughly $743,000 a year or more, a tax cut averaging $62,000 a year—significantly more than the total income of most households at risk of losing Medicaid or SNAP.
Even as Republicans promise to extend tax cuts skewed to the top, they are noticeably silent about extending one tax cut that is well targeted to people who need it: the improved premium tax credits that since 2021 have made Affordable Care Act marketplace health coverage far more affordable. Failure to extend this tax cut would raise premiums for more than 20 million people, including at least 3 million small business owners and self-employed workers, and render an estimated 4 million people uninsured.
Outside of the reconciliation instructions, the budget blueprint calls for significant additional, unspecified cuts, including cuts to the part of the budget that funds K-12 education, Pell Grants for college students, medical research, transportation and flight safety, clean air and water projects, and customer service at the Social Security Administration and the IRS.
The Numbers
The budget resolution directs the House Energy and Commerce Committee to reduce the deficit by $880 billion over 10 years, a target Republicans have indicated they will hit primarily by cutting Medicaid. Similarly, it directs the House Agriculture Committee to reduce the deficit by $230 billion over 10 years, which the committee would achieve primarily by cutting SNAP benefits, restricting eligibility, or both. And it directs the Education and Workforce Committee to reduce the deficit by $330 billion, the bulk of which is likely to come from making student loans more expensive.
These cut numbers are a “floor”; committees could cut even more as the legislative process advances. The budget resolution even includes a non-binding policy statement indicating a desire to make deeper cuts. (The directive to the House Ways and Means Committee may also assume cuts to energy tax credits, which would increase utility bills, imperil energy reliability, and threaten jobs and investment nationwide.)
This budget also cuts myriad investments in the budget area that covers everything from schools to roads, medical research, assistance with rents, and administering Social Security, known as non-defense discretionary (NDD) spending. In 2024, total NDD funding outside of veterans’ medical care was 14% below the 2010 level, after taking into account inflation and population growth, and it will likely fall further in 2025, when appropriations are finalized. The House Republican budget would continue this disinvestment in the future.
The House Republican budget’s path of less opportunity, higher poverty, and more inequality is the wrong direction for our nation.
As noted above, the budget plan could result in enormous cost shifts to state, local, territorial, and tribal governments. Some of the proposed cuts in Medicaid and SNAP would force them to pick up a much larger share of the programs’ costs or leave people without needed help. Cuts in funding for education, childcare, transportation, and other services would also leave states and localities to fill in the holes or see serious degradation in basic public services. If some states are better able than others to fill in those holes, the already large differences among states in areas such as education funding and quality will grow.
The budget would cut Medicaid, SNAP, and a broad set of public services and make college more costly, but not to reduce deficits or respond to a national emergency; instead to offset a portion of Republicans’ profligate tax agenda. The reconciliation instructions allow for the Ways and Means Committee to increase the deficit by $4.5 trillion through 2034. This is $900 billion more than is needed to extend the expiring 2017 tax provisions over that time period, signaling that more tax cuts will be added on top of the already expensive 2017 tax cuts and could include additional regressive corporate tax cuts. (Note that the reconciliation directives only go through 2034, so include nine years of new tax policy because the 2017 tax cuts are already in effect through 2025.)
Underscoring the House Republicans’ upside-down priorities: extending the tax cuts for the top 1% costs $1.1 trillion through 2034, roughly the same amount they are proposing in cuts for millions who rely on Medicaid for health coverage and who use SNAP to buy groceries. This is the same old trickle-down nonsense that has dramatically worsened inequality in income and wealth.
As large as the tax cuts are, the Budget Committee claims that the budget plan, if followed, would achieve deficit reduction by using unreasonable estimates of economic growth and its resulting impact on government revenues and spending. Their claimed macroeconomic “bonus” of $2.6 trillion over 10 years is far larger than independent estimates of macroeconomic effects of extending the tax cuts done by diverse entities like the Tax Foundation, Tax Policy Center, Yale Budget Lab, Joint Committee on Taxation, Congressional Budget Office, and Penn-Wharton Budget Model. While these were not estimates of this precise budget plan, it’s extremely unlikely that they would show a bonus anywhere near this size. And it should be noted that the Trump administration’s planned mass deportations (supported by the increased spending in the budget plan) as well as restrictions on new immigration and tariffs are all projected to reduce economic growth.
When you strip away the budget’s “bonus,” the budget would increase the debt by $1.6 trillion over the next decade—driven by expensive tax cuts—while increasing poverty, increasing the cost of a college education, raising families’ costs for food and healthcare, and leaving more people without health coverage. Coupled with the potential for tariffs to raise consumers’ prices for many goods, this agenda is a stark betrayal from the -resident’s promises during the campaign to look out for people who face financial struggles.
The House Republican budget’s path of less opportunity, higher poverty, and more inequality is the wrong direction for our nation. Unfortunately, Senate Republicans appear poised to head in a similar direction, only through two reconciliation bills rather than one. Congress should return to the drawing board and craft a budget that broadens opportunity, lowers costs, and invests in people and families, while responsibly raising the revenues needed to make those investments and reduce economic risks associated with high debt.
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We Need a Shared Working-Class Agenda to Overcome Economic Hardship and Defeat Trump
If we resist getting caught up in the endless drama, divisions, and distractions—and work together to further our own slate of issues—we have the power to create meaningful change.
Jan 30, 2025
As Trump creates crisis and chaos, testing the limits of his authority and driving the news cycle, it’s critical we keep returning to what matters most to the American people. By focusing on our shared priorities and working together, we can stay grounded during the turmoil and build the power to drive positive change.
At the top of Americans' concerns is economic hardship and inequality. Ninety percent of voters told Gallup the economy was a top influence on their 2024 votes. The rising cost of housing and everyday expenses was cited as the most critical issue by both Trump voters (79 percent) and the broader electorate (56 percent).
These concerns reflect real struggles. According to the Federal Reserve, more than one-third of American adults lack the resources to handle a $400 emergency without borrowing. Families face crushing costs—median childcare runs $1,100 monthly, matching typical rent payments. Natural disasters have financially impacted nearly one in five adults.
By focusing on the issues that affect the lives of millions of Americans, we can build common ground for organizing and advocacy.
The ALICE framework helps us understand this crisis. These Asset Limited, Income Constrained, Employed families—now 42 percent of all U.S. households—often work multiple jobs yet still struggle to cover basics. They are our neighbors, many of them working nearby in businesses, medical facilities, and factories living paycheck to paycheck, while caring for children and elders. Many are forced to choose between rent, food, gas for the car, and paying the power bill.
Millionaire and Vice President JD Vance said at the recent “March for Life” rally in Washington, D.C., that he wished more young people would have children. Yet over half of parents surveyed said that they suffer anxiety due to not having enough money to support their family.
It is not unusual to find people living in their cars or in tent encampments, going to work at multiple jobs but unable to afford rent. The numbers of these ALICE families have grown by 23 percent since 2010 and now make up 42 percent of American households.
Meanwhile, America's billionaire class has accumulated unprecedented wealth—$6.72 trillion among 813 individuals, growing by $1 trillion in just that last nine months of 2024, according to the Institute for Policy Studies. This concentration of wealth translates directly into political power that even many wealthy Americans recognize as wrong. The Patriotic Millionaires group, representing 500 wealthy individuals, has called for higher taxes on the ultra-wealthy, warning that extreme wealth concentration is corroding democracy.
In spite of his populist language, the Trump administration’s millionaires and billionaires show few signs of being interested in addressing the economic hardship of American families. The president’s true priorities were on display as the billionaires lined up to kiss the royal ring with large donations for the inauguration and were seated in the most prestigious seats at the events.
What can be done? How can ordinary people build sufficient power to put the wellbeing of ordinary families first?
The American people understand these challenges and 89 percent of them recognize that excessive political influence by the wealthy drives inequality, according to the Pew Research Center. Two-thirds believe our economic system needs major reform. Even wealthy Americans largely share these concerns, polling just 9 points lower in their worry about inequality.
With MAGA Republicans dominating Congress and the Executive Branch, national reform is tough. But if we resist getting caught up in the endless drama and distractions, and work together to further our own agenda. we have the power to create change.
- We can remind elected officials at all levels of government that their constituents expect support for child care, healthcare, education, minimum wage increases, and housing policies for working families;
- We can support state and local initiatives to tax wealth and invest in communities;
- We can keep economic hardship and inequality at the center of public discourse; and
- We can join organizations, like the Working Families Party, and build coalitions around shared economic concerns.
By focusing on the issues that affect the lives of millions of Americans, we can build common ground for organizing and advocacy. Instead of being distracted, divided, and overwhelmed, we can set our own agenda, build power together for positive change, and insist that our elected leaders act on our shared priorities.
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Investing in Childcare Would 'Massively Increase' Parents' Earnings: Study
"This kind of payoff is almost unheard of in government labor-market policies."
Oct 07, 2024
While Republican proposals for solving the childcare crisis in the presidential campaign have ranged from recruiting "grandpa or grandma" as babysitters to slashing providers' certification requirements—with presidential candidate Donald Trump failing to give a coherent answer when asked about the issue last month—a new study delivers a simple message about how the benefits of public spending on childcare significantly outweigh the costs.
Researchers at Yale and Brown universities analyzed the universal pre-kindergarten program in New Haven, Connecticut, and found that "politicians could massively increase Americans' earnings" by expanding investments in such programs.
The New Haven program began as the result of a 1996 court ruling and is open to all families in the city regardless of income—but it uses a lottery system for enrollment due to limited funding and space.
The paper the researchers published with the National Bureau of Economic Research shows that parents whose children were selected in New Haven's lottery had 11 more hours of childcare than those who weren't able to benefit from the tuition-free universal pre-K program—enough to increase the parents' earnings by 21.7% even after their kids moved on to elementary school.
That increase makes childcare spending "one of the most effective, pro-work policies in the U.S.," said Washington Post economic columnist Heather Long.
The added earnings stemmed largely from the parents' ability to continue working without taking time off to fill in gaps left by a lack of childcare, particularly because New Haven's program includes extended hours, with children able to attend as early as 7:30 am and as late as 5:30 pm.
The paper emphasizes that families that didn't get a pre-K slot still utilized other childcare programs out of necessity—but they had to pay for them out of pocket and were able to send their children to the programs for fewer hours per week than those who won the lottery.
"A few more hours of care can have long-run returns for families that are quite a bit larger than the costs of provision," Seth D. Zimmerman, a research associate at Yale who co-authored the study, told the Post.
Combining the added earnings for parents and other economic benefits associated with early childhood education, the researchers found, every dollar spent on providing tuition-free full-time childcare yielded $6 in benefits.
"This kind of payoff is almost unheard of in government labor-market policies—much higher than for most other pro-work programs, such as the earned-income tax credit," wrote Post columnist Catherine Rampell in an analysis on Monday.
The study was published days after the White House released an issue brief titled Childcare Is Infrastructure, which the Biden administration said was made evident by its $24 billion investment in the industry through the American Rescue Plan.
"Introduction of universal pre-K across various states led to increased pre-K enrollment and higher employment rates among mothers with young children in those areas on average," said the White House. "Consistent with an increase in overall economic activity, places that introduced universal pre-k also had larger increases in new business applications and the number of establishments than places that did not."
Vice President Kamala Harris, the Democratic presidential nominee, has expressed support for expanding childcare programs and lowering costs for families, including by restoring the expanded child tax credit and providing an extra tax break for families with newborns.
The new study suggests that in the presidential campaign, "childcare should be front and center," wrote Rampell. "If you want to help workers, help them care for their kids."
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