How Trump's budget proposals could affect lower-income Americans

Axios

03-05-2025

The White House's budget proposes enormous cuts to federal spending — some of which, if enacted, would put millions of the poorest Americans in a bad spot.
Why it matters: The proposal is just a starting point, but it's a dark one, say advocates for the disadvantaged.
The big picture: The budget would cut 10% from last year's level of discretionary spending — things the government does excluding mandatory programs like Social Security and Medicare.
But the White House wants to increase spending for border security and defense, so the bulk of the cuts are on non-defense programs, like health care, education, and housing.
The proposal comes just as recession fears are spiking, and worries are growing that tariffs will raise the prices of everyday goods — a bitter pill to swallow for those living paycheck to paycheck.
By the numbers: The cuts would bring non-defense discretionary spending to its lowest level in modern history — less than 2% of GDP, compared to an average 3.1% over the past 40 years, per an analysis from Bobby Kogan, a senior director of federal budget policy at the liberal Center for American Progress.
"They are calling for something that is extreme, objectively, and even by Trump standards," adds Kogan, who worked at the Office of Management and Budget during the Biden administration.
The other side: The White House says the cuts are a way to move certain programs, particularly education, back to the states, and eliminate "radical gender and racial ideologies that poison the minds of Americans."
Zoom in: Housing advocates were stunned by a nearly $27 billion cut to housing assistance for low-income Americans.
Those cuts come after huge spikes in rents coming out of the pandemic. Their impact will be "inhumane and devastating," said Rachel Fee, Executive Director of the New York Housing Conference, in a statement.
"This plan will drive more people into homelessness."
Another hit: Trimming $4 billion by eliminating the Low Income Home Energy Assistance Program, or LIHEAP, which assists poor people in paying for heat in the winter and cooling in the summer. It is critical in states with harsh winters — both senators from Maine have pushed for it.
The White House says it duplicates state programs. Instead of providing help with energy bills, low-income individuals will be supported "through energy dominance, lower prices, and an America First economic platform," the budget document says.
An administration official pointed to a 2010 GAO audit that found 9% of households receiving benefits contained invalid identify information — some "likely due to simple errors." The report says its recommended security fixes had been implemented.
"Seniors and low-income [people] also will not go without utilities as states have their own policies to help with utilities, including severe weather no-disconnection policies, lessening the need for this program at a federal level," an administration official tells Axios in an email.
Also cut: $4.5 billion in Title I education assistance, which is money meant for poorer school districts.
Caveats: A president's budget is just a wish list; Congress doesn't simply put it through.
This is just a partial proposal, it doesn't discuss Trump's plans for tax breaks. Some of those, like no taxes on tips, could theoretically help lower earners.
It also doesn't cover Medicaid, the federal health insurance program for lower-income Americans. That's reportedly on House Republicans' chopping block.