This year began with several promises from federal lawmakers as Republicans held unified control of the federal government: repeal the Affordable Care Act (ACA), invest $1 trillion in infrastructure, enact drastic tax reform, and build a wall. Although less prominently featured in the national narrative, major changes in federal antipoverty programs were also on the agenda.
The American “safety net" for low-income families encompasses a patchwork of programs. The ability of an individual or family to enroll and receive benefits depends on where they live within the country, their income, and the program structure. Some programs, like Temporary Assistance for Needy Families (TANF), generally allow anyone who meets the eligibility criteria to participate, while other programs, like housing assistance, provide benefits to only a portion of those who qualify.
We tracked relevant legislative and regulatory actions to understand the directions federal antipoverty programs could take in this administration. Some of the promised legislative reforms—such as repealing the ACA—did not materialize, but 2017 saw significant changes for several programs affecting low-income families.
What happened to the safety net this year?
Congressional inaction and various regulatory changes chipped away at economic supports for families reliant on federal antipoverty programs. Congress failed to reauthorize the Children’s Health Insurance Program (CHIP), putting coverage and health care affordability at risk for millions of children. Some states are projected to run short of CHIP funds as soon as the end of January unless a solution is found in the final days of the year. Congress also failed to extend funding for community health clinics. The looming threat of cuts to housing assistance caused some public housing authorities to restrict access to Housing Choice Vouchers and tighten their already slim budgets in other ways.
The US Department of Agriculture recently announced its intent to provide states greater flexibility in administering the Supplemental Nutrition Assistance Program (SNAP), which provides food assistance to low-income households. Such flexibility may open the door for states to enact additional work requirement rules or implement drug testing. Some states, like Wisconsin, are already looking to do so.
The administration also ended an Obama-era policy that permitted states to request a waiver to TANF’s work requirements. Although this TANF change is mostly symbolic (no state ever used these waivers), when coupled with recent discussions about welfare reform, it signifies a potential move toward instituting across-the-board work requirements for recipients of federal assistance.
What are the implications of tax reform and the budget debates?
Tax reform’s potential damage to the safety net is twofold. First, specific programmatic changes will reduce incentives for socially beneficial action, such as slashed corporate tax rates that reduce the incentive for companies to invest in the Low-Income Housing Tax Credit and the repeal of the individual mandate for health care, which reduces the incentive for people to buy insurance under the ACA. Second, reduced tax revenue will increase the deficit, putting pressure on the government to reduce spending on the safety net.
Without separate congressional intervention, some cuts will automatically go into effect in accordance with the “pay as you go” budget rule intended to offset deficits. This could amount to nearly $30 billion in Medicare cuts next year alone.
The current congressional budget resolution includes decreased funding for programs like SNAP, TANF, Supplemental Security Income, the Low-Income Home Energy Assistance Program (LIHEAP), and rental housing subsidies provided through the US Department of Housing and Urban Development. Congress passed a continuing resolution as a stopgap measure until Friday, December 22. As of the publication of this blog post, the House is considering an additional continuing resolution to keep the government open that includes a CHIP extension through the end of March, provides health center funding, and delays automatic cuts.
What’s coming in 2018?
Although we don’t know the cuts and programmatic changes that may result from a final budget deal, the administration’s proposed fiscal year 2018 budget and House Speaker Ryan’s “A Better Way” plan can provide insight into what we might see. Urban Institute analysis of the administration’s proposed fiscal year 2018 budget found that about 20 percent of all families and 30 percent of families with children would lose resources if cuts to key safety net programs—including SNAP and LIHEAP—were approved. Children’s education and health programs would also face deep cuts.
The administration may not have overhauled federal antipoverty programs in 2017, but President Trump and Speaker Ryan have already indicated that welfare reform will immediately follow tax reform. Reports have recently surfaced of an executive order coming as soon as January that would review safety net programs to “streamline” benefits. We will continue tracking these changes as the debate over the future of federal antipoverty programs continues in 2018.
An earlier version of this post incorrectly stated that a congressional budget resolution, rather than a continuing resolution, provided stopgap funding until December 22.