Last month, Congress rushed through the night to pass the One Big, Beautiful Bill Act with last minute changes that would further increase cuts to many federal programs. In the health care sections, the bill primarily targets adults – including many parents and caregivers – who gained health coverage from the Affordable Care Act (ACA) through Medicaid expansion and the marketplace. The Medicaid/CHIP provisions alone will translate to millions losing health care coverage and more than $850 billion in cuts. This comes even as most Americans across the political spectrum don’t support cuts, including a proportion of voters who would actually prefer to see increased Medicaid spending. And while Medicaid takes the biggest hit, the rest of the bill will further risk the health of many of the same families. Most families would experience the effects of the budget reconciliation bill as massive, ugly hits to their budgets, stress levels and mental health – piling on to families already struggling to make ends meet.
Right now, families are facing:
- A continued maternal health crisis that puts the lives of moms and babies at risk, especially in rural areas where health care and birthing hospitals are increasingly hard to access
- Child care that is hard to find and expensive (Child Care Aware’s annual report on supply and cost shows that on average, child care costs more than a family’s rent, mortgage or university tuition in most states.)
- Rising costs of living, from groceries to housing.
Since the pandemic, the RAPID survey has regularly checked in with families with young children to track their experiences. Their latest brief highlights the ways material hardship weighs on the entire family. Higher costs are especially challenging for low-income families, who face higher hurdles to meet basic needs. Meanwhile, the nation’s leaders are in one breath looking for ways to improve the national birth rate, while championing a bill that will take basic health, nutrition and education support from millions of families. Provisions targeting children in immigrant families – including many citizen children –are particularly mean-spirited.
So how will the bill affect low-income families? Let’s take stock.
Medicaid cuts will translate to loss of coverage as millions of parents, child care providers, caregivers, and other low-income adults face strict work requirements and other red tape that will only make it harder to get and stay enrolled in Medicaid. Added red tape will also mean hundreds of thousands of children lose out on coverage they are eligible to receive. These coverage losses impact family health and add economic stress by hitting their wallets. Medicaid is an important economic as well as health care support for families– when even one family member becomes uninsured, the whole family takes the hit.
More families – and their children – will lose access to nutrition assistance through the State Nutrition Assistance Program (SNAP). At least 2 million children are estimated to lose food assistance as their parents or caregivers become subject to the work requirement. The SNAP cuts – adding up to roughly 30% of the program – would also require states to pay as much as 25% of the cost of nutrition assistance for the first time in SNAP’s 50-year history. This could force states to roll back benefits or opt out of the program altogether.
Families of as many as 20 million children are blocked from receiving the full $2500 child tax credit. The 2021 American Rescue Plan Act boosted the child tax credit for 2021 and allowed all working families to receive the full credit, which evidence shows reduced child poverty. Last year, the House passed a larger child tax credit for these working families with a bipartisan vote before the bill stalled in the Senate. In the reconciliation bill, low-income working families with children will remain unable to access the full credit and won’t benefit from the $500 increase, as higher-income families up to $400,000 receive the full credit, increased to $2,500 total. Child tax credit changes would also prohibit parents without a social security number (SSN) from qualifying for the tax credit, even if the child has their own SSN– that’s 4.5 million kids losing out.
The Trump savings account for children, as written, disproportionately favors higher-income families. Some have pointed to the “Trump Accounts” included in the bill as a national version of Baby Bonds, a popular and promising approach states and communities (See Connecticut) have used to help low-income children gain access to the same educational and employment opportunities as their wealthier peers. Trump accounts do create a vehicle for long-term, tax-advantaged savings for young kids. They would be available to any American child born between 2025-2028, created with a $1,000 contribution from the federal government, intended to grow through family contributions of up to $5,000 annually. The concept behind this is sound – as these kids enter adulthood, they have solid investments on which they can lean for approved expenses such as homeownership or higher education. The Urban Institute points out that without better guardrails the bill’s Trump accounts would disadvantage lower-income families already struggling to get by, much less fund additional funds to contribute significant sums over time. This is consistent with the full bill – which the Congressional Budget Office shows will increase household resources of the wealthiest Americans by pulling from the resources that support the lowest income Americans. The bill’s overall cuts to the social safety net wipe out any real investment these accounts would provide to low-income kids.
States and communities will bear the financial brunt of these cuts– and be forced to deem winners and losers. Massive cuts to federal programs are a massive cost-shift to states. How can the biggest Medicaid and SNAP cuts in history NOT impact state budgets? Less federal funding coming in the door for Medicaid and SNAP will pressure other areas of the state budgets, like education, as states scramble to try and make up massive losses in federal.
Ultimately, even as families are already struggling, states will be unable to do more for low-income families – the financial reality will be that they will be forced to do less. (Yes, even in states with the best of track records.) The Center on Budget and Policy Priorities has new 50-state fact sheets on the impact of the full House-passed bill on families and state economies.
Lawmakers have forcefully asserted that these cuts would not hurt pregnant women and children, but the evidence paints a different picture. Don’t believe any suggestion that the largest cuts in Medicaid history, an overhaul of SNAP, loss of child tax credits and other rollbacks in family support won’t hurt pregnant women, children or families. No person, no family, no community, no state will be spared.