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Trump's Budget & What It Means For Grant Programs

The US Government gives away approximately $500 billion every year, through over 1000 programs.[1] Most of this money goes to state and local government programs, often through large "block grants," or is given to schools or other institutions. Federal programs do sometimes provide direct support to individuals, through either subsidized loans or outright grants. These programs are primarily designed to support the most vulnerable portions of American society: the aged, the disabled, and the very poor. They form an important part of America's social "safety net."

On May 23, 2017, the Trump administration released a proposal that it claimed would cut $4.3 trillion in spending over the next decade. The proposed cuts include a $1.4 trillion reduction in nondefense discretionary spending, a $616 billion cut in Medicaid and the Children's Health Insurance Program, a $272 billion cut in welfare programs, and a $143 billion cut in student loan subsidies.[2] Many of these cuts involve agencies that provide direct or indirect assistance to needy Americans, and the proposal would have a significant impact on federal grant and loan programs.

It is important to remember that this is a proposed budget and that it is likely to see major revisions from Congress. The proposal is a statement of ideological intent, not reality, and legislators may not be eager to cut programs that directly benefit many of their voting constituents. While there will probably be major changes, the proposal does represent a strong indicator of government priorities, and with the administration party in control of both the Senate and the House, those priorities are likely to be reflected in the final budget. If you're receiving federal money or considering applying, you'll want to keep track of how the debate is developing.

Here are some of the areas where proposed cuts are likely to affect grant programs.

The budget proposal calls for a total of $9.2 billion in cuts to the Dept. of Education.[3]

Pell Grants, the largest federal program supporting higher education for low-income Americans, would not be cut, but $3.9 billion would be cut from the Pell Grant program's surplus, which was widely expected to go to summer class funding for needy students.[4] The Federal Supplemental Educational Opportunity Grant (SEOG) program, which provides need-based aid for college students, is slated for elimination.[5] The proposal cuts $143 billion from the Federal student loan program, eliminating federally subsidized loans entirely and eliminating a forgiveness program that reduces or ends loan obligations for police officers, nurses, and teachers, among others.[6] $2.4 billion in grants for teacher training would be eliminated.[7] The proposed cuts in the education budget are likely to be a significant concern to low-income students who plan to seek government support for their education.

While the Pell grant should not be immediately affected, other programs will be, and competition for Pell grants may become more aggressive. Student loans are likely to be more expensive and harder to get, especially for individuals with low credit scores.

Food support has received substantial federal funding over the years. The most visible program is the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, which provides direct assistance with food purchases to over 40 million Americans. The administration proposes a 25% cut to SNAP funding over the next ten years, reducing spending on food assistance by $193 billion.[8] The Special Supplemental Nutrition Program for Women, Infants, and Children would be cut by $200 million.[9] The Emergency Food Assistance Program (EFAP), a major source of food for soup kitchens and other food assistance projects, would be cut by almost $5 million.[10] In sum, these cuts represent a significant reduction in federal support for programs that feed America's hungry.

Financial Support
Financial support for the disabled, the needy, and the aged is set to face serious reductions if the proposed budget is approved. Temporary Assistance to Needy Families (TANF), commonly known as "welfare," is slated for a $311 billion cut.[11] The Community Services Block Grant program, a key source of funding for state and local assistance programs, would be eliminated.[12] Social Security retirement benefits would be untouched, but Social Security Disability Insurance would be cut by around $70 billion over ten years, with further cuts to the Supplemental Security Income program, which is administered by the Social Security Administration and supports disabled, elderly, and other residents.[13] These cuts could have a significant impact on the availability of money supporting the elderly, the disabled, and the needy.

Federal programs supporting low-income Americans that wish to buy or rent better housing or repair the houses they have would take a serious hit under the proposed budget. Housing programs administered by the Dept. of Housing and Urban Development (HUD) would be cut by 17%, or $7.7 billion and up to 250,000 people could lose Housing Choice vouchers supporting their rent and mortgage payments.[14] The Dept. of Agriculture's Single Family Housing Direct Loan program, which supported low-income rural people who want to purchase homes, would be eliminated.[15] HUD's Community Development Block Grant program, an important source of funding for state and local housing programs, would be defunded, along with the Choice Neighborhoods program and several other HUD initiatives.[16] The Weatherization Assistance Program and the Low Income Energy Assistance Program, which helped people reduce and pay their utility bills, would be discarded.[17]

What Does It Mean?
We have to stress again that we are discussing a proposal, not an actual budget. Extensive changes are expected, and any or all of these cuts could be reversed by Congress. However, the proposal does reflect the overall ideological intent of the administration party, and that party does control both houses of Congress. The proposal may be moderated during the budget process, but the overall direction of policy planning is likely to remain.

If you are receiving a federal grant or other government assistance, you will want to monitor the debate closely and keep track of emerging proposals and directions. Programs that affect you could be set for cuts or elimination and competition for the remaining resources will become more aggressive. You may want to look for other options and prepare for the possible loss of funds or to develop new strategies for keeping or obtaining a grant. If you are likely to be affected by program cuts, or if you have strong opinions on the subject, you should consider contacting your representative and making your opinion known. Citizen input does matter!