Trump’s Budget Proposal: A Blueprint for Harming Low-Income Families

President Donald Trump recently released his budget proposal, and while it’s unlikely to become law in its current form, it offers a stark glimpse into his administration’s priorities and how they might impact low-income families across the nation. The budget outlines significant increases in funding for Homeland Security and the Department of Defense, coupled with drastic cuts to social services that millions of impoverished individuals rely on.

While Congress is unlikely to adopt Trump’s budget wholesale, its influence on Republican lawmakers’ negotiation strategies and the policy areas they prioritize is undeniable. It serves as a roadmap for the administration’s intentions, revealing a willingness to dismantle key components of the social safety net under the guise of fiscal responsibility.

The proposed budget seeks to slash a staggering $163 billion from crucial sectors like education, housing, and health programs. These cuts disproportionately affect lower-income Americans, targeting initiatives ranging from youth job training to Federal Work-Study. Notably, the proposal avoids direct cuts to Social Security, Medicare, and Medicaid – the nation’s largest social programs, which often spark intense debates over welfare reform. This exclusion is primarily because the proposal focuses on discretionary spending, while Social Security and Medicare fall under mandatory spending categories.

Trump’s approach appears to be a calculated strategy to overhaul the social safety net without provoking a widespread political backlash. He understands that directly tampering with Social Security and Medicare could have significant political repercussions. Instead, he focuses on less prominent programs, betting that the public won’t object to cuts in these areas or to changes in how aid is delivered to those in need.

One of the most severely impacted departments under Trump’s budget is Housing and Urban Development (HUD), which faces a proposed reduction of $33.5 billion. The majority of these cuts, approximately $26 billion, target rental assistance programs, including public housing, housing vouchers, and housing for the elderly. The proposal aims to consolidate these programs into a single entity and impose a two-year limit on rental assistance for able-bodied adults.

This proposed restructuring not only jeopardizes the benefits of millions of people but also fundamentally alters the way federal rental assistance operates. Currently, funds for housing vouchers, for example, directly subsidize individuals’ rent payments. The White House seeks to redirect these funds towards block grants, which would provide states with a pool of money to allocate to various state or local housing programs. This shift grants states greater flexibility in how they spend the funds, potentially diverting them from direct rental assistance. Hypothetically, money earmarked for housing vouchers could be used to incentivize developers to build more housing, which, while beneficial in the long term, shouldn’t come at the expense of immediate rental assistance for those facing homelessness or housing insecurity.

The precedent for this type of shift exists in the 1996 welfare reform legislation, which created Temporary Assistance for Needy Families (TANF) to replace the New Deal-era Aid to Families with Dependent Children (AFDC). While AFDC provided direct federal payments to eligible individuals, TANF established a system of block grants, allowing states to allocate welfare funds as they saw fit. The rationale behind this change was to grant states greater autonomy in managing welfare funds. However, this resulted in states diverting funds away from basic cash assistance and towards other programs, including tax cuts. Data from the Center on Budget and Policy Priorities indicates that states spend only a small percentage of their TANF funds on basic assistance, instead directing resources towards unrelated programs.

Critics like Peter Germanis, who worked on welfare reform during the Reagan administration, argue that the TANF legislation contained fundamental flaws. He states that Congress granted states excessive flexibility, leading to the creation of "giant slush funds."

By transforming federal rental assistance into a block grant program, the Trump administration risks reducing the likelihood that renters will receive the direct benefits they are entitled to, similar to the outcomes of the 1990s welfare reform. This concern is compounded by the sheer magnitude of the proposed budget cuts. Rather than reducing funding, what renters need is more support for rental assistance programs. Federal rental assistance programs already play a crucial role in lifting millions of people out of poverty each year, but they are underfunded and fail to reach everyone who needs them, especially in the face of rising housing costs.

Another significant cut proposed by Trump’s budget targets the Low-Income Home Energy Assistance Program (LIHEAP), which helps families cover their home heating and cooling bills. The budget includes a $4 billion cut to LIHEAP, effectively eliminating the program entirely, given its existing budget of approximately $4 billion. The administration argues that LIHEAP is "unnecessary" and rife with fraud.

Established in 1981, LIHEAP is a smaller and less controversial program than Social Security or Medicare. However, it provides essential assistance to about 6 million families across the country. LIHEAP, along with the Weatherization Assistance Program, also covers the costs of home improvement projects, such as wall insulation or furnace replacements, to improve energy efficiency, particularly in areas with extreme weather conditions.

Eliminating LIHEAP could have devastating consequences for vulnerable families. As journalist Martine Powers wrote in the Washington Post, "The stakes of this assistance can be life-and-death." Seniors are particularly susceptible to extreme temperatures. Cutting off electricity for non-payment can be catastrophic for people with disabilities who rely on refrigerated medication.

While LIHEAP has assisted millions of families, it has historically been underfunded, threatened by presidents from both parties, and unable to reach all eligible households. Data from the National Low Income Housing Coalition indicates that LIHEAP serves only 20 percent of eligible households. Furthermore, many eligible individuals are unaware of their eligibility or fail to apply.

Similarly, while rental assistance programs help many people remain housed, they do not reach everyone who needs them due to underfunding. About half of renter households in the US are considered cost-burdened, meaning they spend more than 30 percent of their income on housing.

Addressing these issues requires tangible solutions, including increased funding. However, Trump’s budget highlights a recurring problem with America’s social safety net: instead of seeking ways to improve programs like LIHEAP or housing vouchers, lawmakers often make them more difficult to access, setting them up for failure. This was the case with public housing, which faced sabotage by presidents and Congress before being labeled a failed experiment, despite being designed to fail in the first place.

Although Trump’s budget is unlikely to become law in its entirety, its significance should not be dismissed. Even if Congress rejects the budget proposal, these programs remain vulnerable. Last month, Trump abruptly fired the entire staff running LIHEAP, jeopardizing the delivery of heating and cooling assistance to families nationwide.

Therefore, regardless of the budget’s ultimate fate, it’s crucial to remember that it serves as a blueprint for how the Trump administration intends to harm low-income families.