President Trump campaigned on promises of helping the average American worker, but his proposed budget aims to cut benefits for many, including the poor, new grads, and young workers.
The new fiscal directive calls for sweeping budget cuts and increases in national security spending–including $1.6 billion to build Trump’s infamous border wall. To pay for it, entitlement programs for poor and working-class people are being slashed. Looking at “anti-poverty and safety net” programs alone (which include Medicaid, food stamps, and earned income tax credits), Mother Jones reports that over $935 billion is set to be cut over the next decade. The document also proposes more than $66 billion worth of educational program cuts, which includes federal literacy grants and student loan assistance.
The budget projects that these cuts will help bring about 3% economic growth, but which experts say is anywhere from”improbable” to “ludicrous.”
These cuts will hit the poor the hardest, but several proposals in the budget plan also don’t look great for the average U.S. worker. Young workers stand to be especially hard hit. Here’s a look at a few examples of how Trump’s proposed budget will hurt American workers.
Student Loan Reform
President Trump wants to cut $143 billion in the name of reforming the federal student loan program. He proposes a more “streamlined” income-based repayment plan, which would give loan forgiveness to undergraduates after 15 years of repayment and to graduates after 30 years.
One of the most popular repayment programs, however, would be cut: Public Service Loan Forgiveness. This forgave public servants’ student loans after 10 years of repayment and service. The program was enacted in 2007 as way to encourage more Americans to work for the public good. But now, for example, if a social worker gets his or her MSW and agrees to work for the government, that student’s loan won’t be forgiven until 30 years of repayment. In short, public servants–teachers, social workers, public advocates–who have masters degrees will be paying back their loans until the end of their careers.
What’s more, the new budget proposes to slash a vital loan program aimed at low-income people getting their degrees. This allowed the government to pay certain students’ federal loan interest while they were in school and then six months after. The loan assistance made it more feasible for low-income people to get a degree and then enter the workforce.
Social Security And Medicare
The new budget makes no changes to Social Security’s retirement program or Medicare, which the administration uses as an example to show that popular programs will continue relatively unscathed. But even this puts workers in peril. And it does make cuts to the Social Security disability insurance program.
Specifically, recent projections say Social Security’s trust fund will run dry in 2034. This means that if no significant changes are made to the Social Security, in just a few years Americans will not be able to receive full retirement benefits. By not making any changes to this part of Social Security, Trump is implicitly handicapping it.
The same can be said for Medicare–its trust is projected to run out by 2028. This means that poor people receiving medical coverage from the government will likely see reduced benefits in the coming years. Essentially, not changing either of these programs means that workers in the next 10 to 20 years will see a reduction in benefits and likely little help from the government.
The Bottom Line
The good news is that this is just the proposed budget and it’s unlikely to be passed in its entirety. As more analysts describe the budget’s unfeasibility, the more of a fiction it becomes; one former budget director under Reagan described it as “dead before arrival” to the New York Times.
Still, a budget will be passed soon and it remains to be seen whether or not it will look out for American workers. And until low income people are offered more equitable student loan access and necessary entitlement programs aren’t slashed or left to die, that simply won’t be the case.
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