Donald Trump’s Assault on the Social Safety Net
It’s a policy of death by a thousand cuts.
The White House/Flickr
Adrian McGonigal worked full-time at a chicken plant in Arkansas. Chemicals used in the plant aggravated his Chronic Obstructive Pulmonary Disease (COPD), but medication kept it in check. Because his job did not offer health insurance and he earned less than $16,642, he was eligible for Medicaid and qualified forprescription coverage. When he went to pick up his medication, however, he was told his Medicaid was cancelled.
Arkansas’s new Medicaid rules meant that Adrian had to report at least eighty hours of work online every month. There is no option to report by phone, in person, or by mail, even though the website shuts down between 9 PM and 7 AM. Like thousands of Arkansans, he doesn’t have internet access or a computer, so he used his sister-in-law’s smartphone. But Adrian, 40, didn’t realize that he had to confirm his employment on a monthly basis. Subsequently, he was dropped from the rolls. Unable to afford his medication, his COPD flared up and he missed too much work. He was eventually fired.
Arkansas provides us a first glance at the human cost of the Trump Administration’s war on the safety net. InJanuary 2018, President Trump issued an executive order, taking the unprecedented step of allowing states to impose work requirements on individuals like Adrian. Arkansas is now one of seven states given a waiver to impose work requirements in Medicaid and alter established protocols for the program’s eligibility or reporting procedures. An estimated 18,164 Arkansans lost coverage as a consequence, although one study found that most had met the work requirement or qualified for an exemption. Meanwhile, in Texas, 50,000 children per year are losing coverage because of paperwork issues and administrative mistakes. Indiana could see up to 88,000 participants lose coverage. And as many as 23,000 beneficiaries in New Hampshire may be terminated within one year.
Before the Trump administration, these states never would have been allowed to implement these draconian policies. The Obama administration rejected Medicaid work requirements because they undermined access to health insurance and fell outside the law’s statutory objectives.
While Trump’s efforts follow a long history of GOP opposition to the welfare state, he has reinvigorated this assault by deploying executive actions and byzantine administrative rules outside of the legislative process. Calling Medicaid work requirements “unconscionable and illegal,” Eliot Fishman, senior health policy director at Families USA—a leading national, non-partisan voice for health care consumers—said that the administration’s decision to allow work requirements for Medicaid isn’t about work: “It is about taking away health insurance from low-income people.”
Ronald Reagan’s 1980 election first opened the doors to a period of antagonism toward safety-net programs. Undergirding his hostility was the belief that anti-poverty programs should be reserved for only the neediest. If families could work, they shouldn’t qualify for public assistance. Lyndon Johnson’s Great Society, he said, was “the central political error of our time.”
For decades thereafter, conservatives from Reagan to Newt Gingrich to George W. Bush sought to rein in federal spending on social welfare programs. Reagan’s 1981 budget cut funding for programs like food stamps and consolidated existing health services, maternal care and mental health programs into block grants, which drastically reduced funding. While conservatives failed to retrench programs like Medicaid or privatize Social Security, Gingrich did work with Bill Clinton in 1996 to convert Aid to Families With Dependent Children (AFDC) into the Temporary Assistance for Needy Families (TANF) block grant severely weakening the nation’s welfare program.
They also sought to delegate authority to the states to decide which programs to fund and which to kill. Conservative states with high proportions of black welfare recipients quickly imposed tough welfare policies, exacerbating racial inequalities. Reformers argued that states were better equipped to tailor programs to the true needs of the poor, but history has proved them wrong.
Trump’s proposals, however, are ideologically incoherent and significantly crueler than Reagan’s or Gingrich’s. In some instances, he gives states more control, allowing them to implement work requirements for Medicaid recipients. In other areas, he has prevented state experimentation thereby reducing flexibility.
His administration’s claims that work requirements for Medicaid and SNAP recipients will reduce dependency belies all social scientific evidence. They don’t. In fact, reporting modifications have kicked eligible people off programs. In Texas, nine-month old Elijah’s mother rushed him to the hospital after his lips turned blue from a lack of oxygen to his blood. After he was diagnosed with a respiratory virus while in intensive care, doctors told his mother that his Medicaid coverage had been dropped—an error that happened because she had allegedly not responded quickly enough to a letter asking for new proof of income.
What’s more, Trump’s promise to repeal the Affordable Care Act (ACA) was profoundly unpopular. Republicans nonetheless tried to ram through several bills, generating widespread protest and outrage. Eventually, they failed. The swift process they employed to sink the ACA was a public and politically disastrous battle. In response, they have moved to crush the law and reshape the safety net behind the scenes through executive actions and administrative rulemaking. It’s a strategy of death by a thousand cuts.
Before us now are numerous executive actions and rule proposals to limit access to health care; scale back food stamps (SNAP); restrict immigrants’ access to safety net programs; and dramatically reduce enrollments across dozens of safety-net programsby altering the Official Poverty Measure (OPM).
The administration’s unifying vision is to cut back on social spending by tapping into citizen attachments to mythical, unsubstantiated notions of deservedness, hard work, race, and personal responsibility. No president has demonstrated the type of hostility toward poor people that Trump has. No president has initiated these types of cuts at such breakneck speed.
On her first day in office, Seema Verma, administrator of the Centers for Medicare and Medicaid Services, sent a letter to states encouraging them to apply for Section 1115 waivers to implement work and community engagement requirements, compelling people to work or prepare for jobs in order to receive benefits, in line with Trump’s executive order. This was a first in Medicaid’s more than fifty-year history.
While ten state waiver requests are pending, judicial rulings have blocked implementation in three states, concluding that work requirements violate Medicaid’s statutory objectives. One ruling said that states cannot “refashion the program Congress designed in any way they choose.”
This past week, the administration sent a guidance to states offering them an up-front lump sum of Medicaid dollars in exchange for further restrictions of benefits or eligibility for the program, thereby enrolling fewer people, reducing services, including the prescription coverage that Adrian relies on, and reducing provider rates. Millions of beneficiaries will be affected. Conservatives have long sought to block-grant Medicaid but have repeatedly failed to do so legislatively. Trump hopes to achieve this unilaterally.
In May, the administration proposed the “refusal of care” rule, allowing health care providers to refuse care or procedures on religious or moral grounds. The potential implications are wide-ranging: discrimination against women and members of the LGBTQ community; employer refusal to cover procedures, pharmacy refusals to dispense medication, and reduced access to care in rural communities. In November, a District Court Judge wrote that the rule is “shot through with glaring legal defects” and declared it unconstitutional.
It’s not enough to take away low-income Americans’ health care, though. The administration also wants to take away their food. Even though SNAP kept 3.4 million out of poverty in 2017 and helps feed tens of millions of Americans annually, the administration has proposed several rules to limit its effectiveness by unilaterally enacting a series of draconian measures.
The first proposal limits benefits to three months every three years for “able-bodied adults” under age 49, unless they work or seek job training at least 80 hours per month. That could result in more than 800,000 people getting kicked off of SNAP over the next decade. The administration finalized the rule in December.
A second, unfinalized, SNAP proposal eliminates a decades-old policy: broad-based categorical eligibility (BBCE), which allows states to set less restrictive income and asset tests to access the program. The USDA claims the rule would reduce fraud and save money, proclaiming that “automatic eligibility has expanded to even allow millionaires to become eligible.” But research reveals that just 0.2 percent of SNAP benefits went to beneficiaries with net incomes above the poverty line. This change would kick more 2 million people off of SNAP and nearly one million children would lose access to free and reduced-price lunches.
A third proposed rule will prevent states from using utility allowances when determining benefits and instead impose a nationwide standard. If finalized, SNAP benefits would decrease by $4.5 billion over the next five years; 20% of recipients would see a decrease in their benefits; and 8,000 families would lose benefits.
At the same time, the administration has taken action to restrict immigrants’ access to the safety net. It instituted a rule that allows the federal government to deny green cards to hundreds of thousands of immigrants who use Medicaid, food stamps, housing vouchers, or other forms of public assistance. Even before the rule was finalized, it had the chilling effect anticipated by the administration, with legal clinics reporting that parents were opting their children out of needed benefits. While the rule was temporarily in legal limbo, the Supreme Court, in a 5-4 decision, recently allowed the administration to move forward with implementation on February 24th.
In May, the Department of Housing and Urban Development (HUD) proposed a rule barring family members who qualify for public housing from living with any ineligible (another word for undocumented) family members, including children. The choice forced upon these families is to either stay together as a family, lose housing assistance and face homelessness, or be separated. Nearly 108,000 people are at risk: 25,000 families including 55,000 children who are U.S. citizens and green card holders. HUD even acknowledges that the “fear of the family being separated would lead to a prompt evacuation by most mixed households.”
Yet, what could be the most consequential reform is perhaps the most convoluted. The administration has also proposed to change the inflation rate used to update OPM. This could have disastrous consequences and significantly shrink the number of people considered poor. The reverberation throughout the welfare state of cutting eligibility or benefits in more than 80 federal programs that use the OPM to determine eligibility could result in millions with no access to life-saving programs.
Taken together, the modifications to safety net programs will make millions of already marginalized Americans hungrier, sicker, and more vulnerable; eradicating any shot at the “American Dream” or even just plain survival.
The “reforms” already attempted by the administration may be a harbinger of even more cuts to come. The president’s 2020 budget slashes spending in Medicare and Social Security, not to mention Medicaid, food stamps, housing assistance, and other programs. A proposed rule targeting Social Security disability payment changes for hundreds of thousands of Americans, including elders and children, has just closed to public comment. If the GOP sets its eyes on further entitlement reform, it may seek to again do so outside public view to prevent the inevitable public outcry.
That’s partly because the GOP solution to deal with poverty conveniently leaves out some important facts. Studies confirm that anti-poverty programs work. During the first year of Trump’s presidency, safety net programs, such as food stamps, social security, disability insurance, housing subsidies, and the earned income tax credit, directly kept 47.7 million people out of poverty, according to the U.S. Census Bureau. These programs might be the only reason that millions of workers, families, children, seniors, and those unable to work have food on the table. Low-wages, under-employment, and discriminatory hiring practices keep millions on the edge. Ironically, red state residents know this: they are far more dependent on these programs than are those in blue states.
Trump’s bombastic proclamations about a “great economy” ignore the reality that nearly 40 percent of Americans are unable to cover a $400 emergency expense. The gap between the richest and the poorest households is now the largest it’s been in the past 50 years and the racial wealth gap has widened. A third of Americans struggle to afford either food, shelter, or medical care. Moreover, social mobility has declined significantly over the past several decades. Trump’s social welfare agenda only benefits plutocrats who seek to continually reduce their tax burden by gutting federal spending while average Americans suffer the consequences.
Many of the rules proposed by the Trump administration will likely end up in federal courts as judges block states from implementations and suits continue. But even the courts will present a challenge given that Trump has now appointed nearly a quarter of the active judges on the US Court of Appeals. This judicial legacy will pose problems for progressives for decades.
All this is to serve as a warning. Those who know the benefits of the social welfare state—and the people whose lives it preserves and protects—will have to work doubly hard to rebuild it moving forward. Despite the dysfunction that so many journalists and pundits have described in the White House, the administration has nonetheless deployed a unified and intentional assault on the safety net, with unfathomable consequences for the millions of Americans who rely on these programs. It will take a historically vigorous effort to effectively fight back.
Donald Trump’s Economic Record Isn’t What He Says It Is
U.S. Department of Agriculture/Flickr
Prize-winner Joseph Stiglitz
“The remarkable thing is how weak wages are, how weak the economy is, given that as a result of the tax bill we have a $1 trillion deficit.” NOBEL PRIZE-WINNER JOSEPH STIGLITZ
Donald Trump’s Economic Record Isn’t What He Says It Is
He claims the economy is “the best it has ever been.” A closer look at the data tells a different story.
U.S. Department of Agriculture/Flickr
Donald Trump has been on a mission this week to distract from his impeachment by touting his administration’s economic record. First, he launched a 30-second ad after the Super Bowl promising that “the best is yet to come.” Then, in his State of the Union address Tuesday night, Trump highlighted the “American Comeback.” The speech was full of audacious—and characteristically inaccurate—claims: “our economy is the best it has ever been”; the “average unemployment rate … is lower than any administration in the history of our country”; and “wages are rising fast.”
The reality, however, doesn’t match Trump’s
rhetoric. In fact, it would take much longer than a
30-second commercial to highlight the many
ways that the U.S. economy isn’t working for all.
Still, the moment provides an opening for Democratic presidential candidates to challenge the president’s record.
In 2019, for instance, the gap between the richest and poorest households in the United States reached its highest point in more than 50 years. The number of Americans without health insurance continues to climb following years of declines since the passage and implementation of Obamacare. And household debt is now in excess of $14 trillion, exceeding the pre-recession high.
Even with low unemployment, wage growth is lagging. The most recent employment report reported wages increasing by just 2.9 percent over the last year. With inflation at 2.1 percent, that’s not much of a pay raise. To the extent that wage growth has picked up in recent months, a major contributor has been increases in state and local minimum wages that Republicans and the president opposed.
Trump’s signature legislative accomplishment, the 2017 tax cut, has produced none of its promised benefits, including the $4,000 pay raise that he and his allies promised to American workers.
In fact, as a result of the tax cut, 91 companies in the Fortune 500 paid no federal taxes last year. The country’s six biggest banks saved $32 billion at the same time that they laid off more than 1,000 employees.
The tax cut has also failed to produce the “four, five and even six percent” economic growth that Trump promised. In the fourth quarter of 2019, the GDP growth of 2.1 percent was lower than both the growth rate before the tax cut was passed in 2017 and the average of Obama’s second term (2.4 percent). Instead, the tax cuts have produced annual budget deficits of $1 trillion, which Trump has signaled may lead to cuts in Social Security and Medicare, in addition to his ongoing efforts to erode the social safety net.
Ironically, despite the president’s pledge to help the “forgotten men and women,” blue-collar job growth—which includes construction, manufacturing, and mining—remains anemic, only growing at 0.8 percent in 2019 compared to 2 percent in Obama’s final term.
What’s more, the ongoing trade war plunged the manufacturing sector into recession last year, which has stunted economic growth in states like Wisconsin and Michigan. Tensions with China produced a 24 percent increase in farm bankruptcies last year, with the most coming from Wisconsin. The Congressional Budget Office estimated recently that Trump’s trade policies will cost American households an average of $1,277 this year.
Worse yet, employers reported the highest number
of layoffs in four years. For workers who are able
to find new jobs, data shows they earn about 10
percent less than before. That gap is even greater
for workers who were at the same job for three
years or more.
But while the economic reality under Trump is troubling for most Americans overall, it’s even more daunting for African-American workers, who have an unemployment rate almost twice as high as white workers. Displaced African Americans earn 13 percent less in their new jobs. Those who were employed for three or more years earned 31 percent less in their new jobs.
Despite the headlines, too many workers are not feeling the economic boom Trump describes. Instead of making investments to provide Americans with the world-class education and training needed for 21st-century jobs, the president and the Republican Congress chose stock buybacks to benefit the wealthy and a temporary sugar high for the economy that has now worn off.
Democrats can and should challenge Trump on the economy in 2020. Millions of workers are looking for good jobs and a pay raise. Policies to build an economy for all should be central to any campaign’s message. But it’s more than just good politics. Building an economy that works for the 90 percent instead of just the top 10 percent is sound economic policy.
“The remarkable thing is how weak wages are, how weak the economy is, given that as a result of the tax bill we have a $1 trillion deficit.” NOBEL PRIZE-WINNER JOSEPH STIGLITZ
Donald Trump is ‘just wrong’
about the economy, says Nobel
Prize-winner Joseph Stiglitz
President Donald Trump told business and political leaders in Davos, Switzerland last week that the economy under his tenure has lifted up working- and middle-class Americans. In a newly released interview, Nobel Prize-winning economist Joseph Stiglitz sharply disagreed, saying Trump’s characterization is “just wrong.”
“The Washington Post has kept a tab of how many lies and misrepresentations he does a day,” Stiglitz said of Trump last Friday at the annual World Economic Forum. “I think he outdid himself.”
In Davos last Tuesday, Trump said he has presided over a “blue-collar boom,” citing a historically low unemployment rate and surging wage growth among workers at the bottom of the pay scale.
“The American Dream is back — bigger, better, and stronger than ever before,” Trump said. “No one is benefitting more than America’s middle class.”
Stiglitz, a professor at Columbia University who won the Nobel Prize in 2001, refuted the claim, saying the failure of Trump’s economic policies is evident in the decline in average life expectancy among Americans over each of the past three years.
“A lot of it is what they call deaths of despair,” he says. “Suicide, drug overdose, alcoholism — it’s not a pretty picture.”
The uptick in wage growth is a result of the economic cycle, not Trump’s policies, Stiglitz said.
“At this point in an economic recovery, it’s been 10 years since the great recession, labor markets get tight, unemployment gets lower, and that at last starts having wages go up,” Stiglitz says.
“The remarkable thing is how weak wages are, how weak the economy is, given that as a result of the tax bill we have a $1 trillion deficit.”
As the presidential race inches closer to the general election in November, Trump’s record on economic growth — and whether it has resulted in broad-based gains — is likely to draw increased attention.
BLOG: THE GREATEST TRANSFER OF WEALTH TO THE RICH OCCURRED DURING THE OBAMA-BIDEN BANKSTER REGIME
“The middle class is getting killed; the middle class is getting crushed," former Vice President Joe Biden said in a Democratic presidential debate last month. "Where I live, folks aren't measuring the economy by how the Dow Jones is doing, they're measuring the economy by how they're doing," added Pete Buttigieg, a Democratic presidential candidate and former Mayor of South Bend, Indiana.
Trump has criticized Democrats for tax and regulatory policies that he says will make the U.S. less competitive in attracting business investment.
“To every business looking for a place where they are free to invest, build, thrive, innovate, and succeed, there is no better place on Earth than the United States,” he said in Davos.
Stiglitz pointed to Trump’s threats last week of tariffs on European cars to demonstrate that turmoil in U.S. trade relationships may continue, despite the recent completion of U.S. trade deals in North America and China.
“He can’t help but bully somebody,” Stiglitz said.
Max Zahn is a reporter for Yahoo Finance. Find hi
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