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Trump budget: Attacks on poor and working class, claims tax cuts for rich ‘compassionate’

Commentary by Masao Suzuki |
March 19, 2017
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Milwaukee protest against Trump. (Fight Back! News/Staff)

an José, CA - On Thursday, March 16, President Donald Trump presented his first budget proposal to Congress. That proposal, combined with his backing of the House Republican American Health Care Act (AHCA) proposed the week before, add up massive cuts to programs that help the poor and working class, together with large tax cuts for the rich. Trump’s budget director, Mick Mulvaney, told the press with a straight face that the budget proposal was “compassionate” even though those facing the biggest cuts are children, seniors and the disabled.

The biggest single hit is the AHCA cuts to Medicaid, the federal health program for poor Americans. Over the next ten years, the federal government will spend $880 billion less on Medicaid. States, which operate the program, must pay more and/or cut health care for the poor. The bipartisan Congressional Budget Office (CBO) projects that this will lead to 14 million poor Americans losing their health insurance. About two thirds of Medicaid spending goes to children, seniors and people with disabilities. The AHCA would also eliminate more than $300 billion from subsidies for working class individuals to buy health care. Last, but not least the AHCA repeal of the mandate that larger companies provide health care benefits for their workers would lead to 7 million more workers and their families losing their health care over the next ten years.

Trump’s budget proposal entirely cuts federal funding for 19 agencies and 61 more programs to save $54 billion next year alone. This money would go to the U.S. military to fund the wars in Afghanistan and Iraq started under the Bush administration, and the third war being started by Trump in Syria with the introduction of U.S. combat forces. In addition to the programs and agencies being cut entirely such as the Corporation for Public Broadcasting, many other federal programs that help protect the environment, fund transportation and infrastructure, nutrition aid for pregnant women and children (WIC), weatherization of homes to conserve on energy, health research and education, would face steep cuts as high as 30% next year.

Many of the programs that the Trump budget proposal would mainly hurt are programs that benefit poor and working-class Americans. One of these would be the elimination of all $385 million in funding for the Legal Services Corporation, which is a major source of money for Legal Aid in 134 counties across the country. This will lead in large cuts in legal support for poor and working-class Americans, who will be even more at the mercy of unscrupulous bosses and landlords who try to cheat their workers and tenants. 70% of Legal Aid clients are women and a majority are white.

Another program that would be eliminated is the Low Income Home Energy Assistance Program or LIHEAP, that helps poor and working-class households pay for expensive energy bills in the winter. In 2014, the LIHEAP gave aid to 5.7 million households to pay for heating, 673,000 for air conditioning, and 1.7 million more households whose power was about to be turned off. 90% of the households getting help from LIHEAP include children, seniors or disabled people. In households getting aid from LIHEAP, one-third reported going without food, and 40% sacrificed medical care to keep warm and the lights on. In fact, the main problem with LIHEAP is that it is underfunded, as only about 20% of eligible households are able to aid before the annual budget of $3 billion.

The poor and working class in rural areas that largely voted for Trump would take a hit from the budget proposal to eliminate $180 million for the Appalachian Regional Commission, the Delta Regional Authority, and the Northern Border Regional Commission. These agencies help fund roads and bridges, water and sewer projects, and job training in some of the poorest rural areas along the border with Canada, Appalachia, and the Mississippi delta.

Last but not least, the ACHA would totally eliminate Federal funding for Planned Parenthood next year. Right now, Planned Parenthood provides services to about 2.5 million women and men each year. Most of their centers are in rural or poor urban areas that lack health care resources. The cuts in funding for Planned Parenthood are part of the large cut to funding Medicaid.

The Trump administration has not yet made its tax proposal for next year, which is expected to have large tax cuts for the rich, by eliminating the estate tax and the Alternative Minimum Tax, that helps to prevent millionaires and billionaires such as Trump from paying any taxes by limiting tax breaks for high-income taxpayers.

But the ACHA does cut taxes for the rich by eliminating the taxes used to fund the Affordable Care Act (ACA, also known as Obamacare). These taxes targeted for elimination include an investment income tax, and a Medicare surcharge for high income households that reward the rich with almost $300 billion in tax cuts over ten years. Health insurance companies would get another $150 billion in tax cuts during this time.

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