The Trump Administration’s “Rescission” Proposal: Cuts by Another Name

By Kate Walz and Andrea Kovach

Back during the fight over the Republican tax agenda, an ominous question loomed — after driving up federal deficits by $1.5 trillion to give massive tax cuts to huge corporations and our country’s wealthiest households, how would the Trump Administration try to pay for it?

As advocates warned at the time, much of the GOP tax plan would be financed on the backs of low-income and working people. That worry is now coming to fruition.

Last week, the Trump Administration sent a “rescission” proposal to Congress, asking lawmakers to cancel $15 billion in spending that has already been authorized. Similar to other recent proposals from the administration, it includes deep cuts to funding for affordable housing and health programs. Though these cuts represent just a tiny fraction of the revenue expended on the GOP tax plan, if implemented they would jeopardize access to healthcare and affordable housing for millions of low-income and working people.

The Trump Administration’s proposed rescission cuts threaten access to healthcare for low-income families and children.

Half of the proposed $15 billion in cuts come from the Children’s Health Insurance Program (CHIP), which currently provides healthcare coverage to some 9 million low-income children. By ensuring that children and families have access quality healthcare, CHIP has been shown to improve long-term health, educational, and financial outcomes for recipients.

The administration claims their cuts won’t harm children and families, but a large share would come from the program’s contingency fund — which is a pot of rainy day money used by states in times of emergencies, like a natural disaster or economic recession. What happens when states see an unexpected uptick in need?

State governments, providers, and enrollees were recently thrust into a state of stress and panic after after Congress let funding for the program lapse for months. Indeed, just after spending months in angst over the future of federal funding for CHIP, the last thing states and families need is yet another wave of uncertainty.*

The Trump Administration’s proposed cuts threaten the continued existence of public housing stock.

Most of the news coverage around the rescission proposal has focused on the threats posed to CHIP — but the plan would also cut deeply into federal funding for public housing.

Specifically, the plan targets approximately $41 million from the Public Housing Capital Fund, which addresses capital and emergency repairs as well as physical inspections. These proposed cuts, which come at a time when there are already at least $40 billion backlog for public housing repairs, would impact an estimated one million units nationwide — including projects currently undergoing the Rental Assistance Demonstration (RAD) program, a HUD effort meant to alleviate the combination of crumbling units and insufficient public capital needs funding.

The existing gross under-funding of public housing capitol funds has created dire circumstances for low-income families. Public housing residents across the country have suffered for years under increasingly poor housing conditions because of the lack of unit maintenance and inadequate inspections. Such cuts would only lead to the further deterioration of public housing, leaving individuals, families, and communities in even more need during one of the worst affordable housing crises our country has ever seen.

The Trump Administration’s rescission proposal is just its latest attack on low-income and working people.

Since signing the tax plan into law, the administration has proposed gutting other key anti-poverty programs, pushed to expand and strengthen so-called “work requirements,” sought to raise rents on struggling families, continued its ongoing campaign to sabotage healthcare under the Affordable Care Act (ACA), and drafted racially-fueled regulations that, if implemented, would force many immigrant families to choose between meeting their basic needs and staying with their loved ones.

To be sure, each of these proposals is bad in and of itself — but taken together, this agenda represents nothing short of a war on the poor.

Congress must reject these cruel, ill-advised cuts.

Federal lawmakers have 45 days to consider this particular proposal, but the administration is expected ask for even more cuts through rescission in the future.

Lawmakers should reject these and other attacks on the physical and financial well-being of low-income and working people. Rather than undermining federal anti-poverty programs, we should be investing in them.

Trevor Brown contributed to this blog.

*Editor’s note: This paragraph was edited to correct an error on which source of funding states used after CHIP expired.