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Slashes These Programs by Unprecedented $2.5 Trillion

May 30, 2017


Isaac Shapiro
Richard Kogan
Chloe Cho
We have updated this analysis using Congressional Budget Office data, which rely on more realistic assumptions than the Trump Administration’s estimates. For the new version, see: Trump Budget Gets Two-Thirds of Its Cuts From Programs for Low- and Moderate-Income People.

President Trump’s 2018 budget contains the largest dollar cuts to programs for low- and moderate-income people proposed by any President’s budget in the modern era, reflecting a strikingly imbalanced approach to reducing the deficit or offsetting the cost of its proposed tax cuts.  The plan would cut these programs by an estimated $2.5 trillion over the next decade.  About three-fifths (59 percent) of the budget’s cuts would come from these programs that help low- and moderate-income families afford the basics or improve their upward mobility.

Damaging and Disproportionate Cuts
 Altogether, the budget proposes $4.3 trillion in non-defense cuts through 2027.  This means its $2.5 trillion in cuts to programs assisting low- and moderate-income people would constitute about 59 percent of the total non-defense cuts (see Figure 1), even though these programs account for just 29 percent of non-defense spending and just 24 percent of total program spending.  No other modern President (including President Reagan when he proposed deep cuts to low-income programs in his first budget) has proposed a budget with cuts of this magnitude to programs assisting struggling families, even if the cuts are adjusted for inflation or measured as a percent of the economy.

As Table 1 indicates, over the next decade the Trump budget also proposes:  $22 billion in cuts to the Temporary Assistance for Needy Families program (TANF), which already has lost more than one-third of its value since the mid-1990s due to inflation; $17 billion in cuts by eliminating the Social Services Block Grant, which provides states with funding for services for people with modest incomes, such as child care and adult day care programs; and $40 billion in cuts[3] to the Child Tax Credit and Earned Income Tax Credit.  Further, the budget would eliminate subsidized student loans for low- and moderate-income families, forcing them instead to take out the more expensive unsubsidized loans that accrue interest while the student is in school.  This will raise the cost of college for students with demonstrated financial need.[4]

Taking From Those Who are Struggling, Giving to Millionaires

2 The total CTC and EITC cut equals $40 billion, consisting of $28 billion in outlay reductions and $12.5 billion in tax increases.

Source: CBPP based on Office of Management and Budget and Congressional Budget Office

Federal Budget, Budget Plans


[1] For an explanation of this combined calculation, see http://www.cbpp.org/blog/trump-budget-cuts-medicaid-even-more-than-house-health-bill-showing-danger-of-per-capita-cap.  That earlier CBPP analysis estimated the combined Medicaid cuts reflected in the Trump budget would total $1.3 trillion from 2017-2026, examining those years to maintain consistency with the Congressional Budget Office analysis of the House health bill.  The $1.6 trillion figure used here is for 2018-2027, the ten-year window that is the focus of the budget.

[2] The budget does not propose specific funding levels for individual non-defense discretionary programs after 2018.  To estimate future cuts in low-income programs, we assumed that each of these programs would receive the same proportion of non-defense discretionary funding every year throughout the decade as it would receive in 2018 under the Trump budget.

[3] The cuts to these tax credits includes $28 billion in spending (or outlay) cuts and $12.5 billion in tax increases, for a total cut of more than $40 billion over ten years.

[4] This cut — of $39 billion — is not included in the $2.5 trillion total, since the overall student loan program, unlike the other programs discussed in this report, is not targeted on low- and moderate-income families; it also serves families with larger incomes. PDF of this report (4 pp.)


May 23, 2017
May 26, 2017

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Areas of Expertise:
Federal Budget