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POLICY INSIGHT
BEYOND THE NUMBERS

Here’s Our Take on the House’s Low-Income Cuts

News stories (like this and this) and commentaries (like this) offer differing numbers on how the House-passed budget legislation of yesterday would affect programs for low-income Americans.  We’ve said the legislation achieves 42 percent of its savings from “assistance targeted to low- and moderate-income Americans.” With various numbers floating around, we thought it would be useful to show you how we got our figure, which is based on estimates from the Congressional Budget Office (CBO). CBO says the legislation would achieve $309 billion in savings from mandatory programs over the next ten years. Some 42 percent would come from programs like SNAP (formerly known as food stamps), Medicaid, and CHIP (the Children’s Health Insurance Program), and from social services for vulnerable children and elderly and disabled people. Here’s how we got the figure:
  • $35.8 billion (or 11.6 percent of total mandatory savings) from SNAP, eliminating 2 million people from the program and cutting benefits for 44 million others.
  • $31.9 billion (or 10.3 percent) from scaling back the support that many people with incomes too low to owe federal income tax would receive under health reform to help them buy insurance in the new health insurance exchanges; this reduction would cause an estimated 350,000 people to forgo coverage.
  • $12.7 billion (or 4.1 percent) from reducing the number of low- and moderate-income uninsured people who would receive help buying coverage through the health insurance exchanges.  The legislation would eliminate federal grants to help states set up the exchanges, which CBO estimates would delay the establishment of some exchanges and, so, deny some low-income uninsured persons the opportunity to immediately buy subsidized coverage through them.  CBO estimates $14.1 billion in outlay reductions from this proposal, but we do not count as a low-income program cut the $1.4 billion of this amount that reflects lost grants to states — just the remaining $12.7 billion, which reflects lost health insurance subsidies for the uninsured.
  • $23.5 billion (or 7.6 percent) from Medicaid and CHIP.
  • $16.7 billion (or 5.4 percent) from terminating the Social Services Block Grant (SSBG), which states use to provide social services such as home-delivered meals for the elderly and child day care assistance; SSBG overwhelmingly supports services for low- and moderate-income families and individuals and focuses on lower-income communities.
  • $7.6 billion (or 2.5 percent) from reducing the number of people with incomes too low to owe federal income tax who claim the refundable part of the Child Tax Credit.  The legislation would require filers claiming the refundable part of the credit (but not the non-refundable part, which goes to filers with somewhat higher incomes) to provide their Social Security number.
The low-income cuts listed above total $128 billion, or 42 percent of total savings in mandatory programs in the House-passed bill.