Tim Steller's column: Tucson program cuts, House bill amount to wealth transfer

When the stories come out, they may feel isolated.

There were cuts to group meals for the elderly around Pima County and some meals-on-wheels services.

The Americorps program lost positions for people working at Arizona food pantries and summer camps.

Most recently, the Fred Acosta Job Corps Center, which has trained low-income youth in Tucson for 46 years, was suddenly scheduled to close this month.

Stories like this have dribbled out one by one, over the weeks and months, but they are not of course isolated. Broadly speaking, they’re results of the Trump administration’s effort, much of it through the Department of Government Efficiency, to slash federal spending, even to programs that Congress passed and funded like the Job Corps program.

These social-spending cuts are also part of a bigger vision, something that the “Big Beautiful Bill” passed by the House May 22 made clear. The safety-net cuts and the proposed tax-code changes in the bill amount to a massive wealth transfer, away from poorer Americans and toward wealthier Americans.

There’s a lot in the bill — too much, actually — but bottom line, it spends less on services for the poor and moves the savings disproportionately to the wealthy.

Take for example, this key fact, reported by the New York Times columnist Ezra Klein, and which I confirmed with the nonprofit Tax Policy Center: The bill passed by the U.S. House contains the equivalent of about $1.1 trillion in tax cuts for people making $500,000 per year or more, and it contains about $1.1 trillion in cuts to Medicaid and food stamps funding.

It could be hardly clearer than that neat symmetry.

Cuts balance out benefits

This isn’t to say there are no good things for the lower and middle classes in the bill, which the Senate is debating and asking hard questions about. Among other things, the bill:

• Increases the annual child tax credit from $2,000 per child to $2,500 per child per year.
• Would give an income-tax cut to the vast majority of American taxpayers
• Would eliminate taxes on tips and on overtime wages

The eventual effect could be an annual income boost of $4,000 to $5,000 for a median income family, according to the president’s Council of Economic Advisers.

But those positive impacts are offset in many different ways. Most important is the impact on social spending on programs like Medicaid, Affordable Care Act insurance and food aid.

Back to homepage

Subscriber Login

Keep reading with a digital access subscription.

Subscribe now

The Kaiser Family Foundation, analyzing Congressional Budget Office reports and the bill itself, estimates 354,000 Arizona residents would lose insurance through our Medicaid program, the Arizona Health Care Cost Containment System.

This is largely done by establishing new work requirements and bureaucratic steps for maintaining eligibility, which the GOP has termed a way to weed out “waste, fraud and abuse.”

Don’t believe it. These changes to the system would inevitably boot people out who simply don’t fill out or submit forms correctly. That’s not a bug — it’s a feature. It’s the way the bill will succeed at cutting spending.

Overall, the impact of the bill would be to increase the household resources provided by the government to the topmost 10 percent of earners, and reduce the resources given to the bottom tenth, according to the Congressional Budget Office.

The losses in spending on services like Medicaid and SNAP would amount to 2% to 4% of income to the lowest tenth of earners by 2033, the CBO reported. By contrast, the top tenth of households would experience an increase over 2% to 4% in government resources over the same period.

The Tax Policy Center notes that the tax cuts are “highly regressive.”

“Tax cuts would be relatively small for low- and moderate-income households but much bigger for those with higher incomes, especially those making between about $460,000 and $1.1 million (in the highest-income 95th-99th percent),” the center noted in a report out Tuesday.

Benefits cut, debt grows

All of that could arguably be worth it if somehow it reduced our federal budget deficit, but of course it doesn’t. Estimates from the Congressional Budget Office put the increase in the deficit over 10 years at about $3.8 trillion.

So, it’s reducing benefits for lower-income people to hand more money to wealthier people and sell ever more Treasury bonds to finance the debt.

What’s happening at the local level is related. It was a Department of Government Efficiency staffer who prepared the report that led to the Labor Department announcing closures of the Fred Acosta Job Corps Center and others around the country, according to the National Job Corps Association, an advocacy group.

The Labor Department’s argument was that data shows the centers are underperforming. That’s a case worth making — to Congress, which funds the Job Corps centers. The department doesn’t have the power to make such a unilateral and sudden decision that takes benefits from poorer people.

Besides, the department has announced no plan to reinvest the savings in similar training programs. (I asked the department spokesman for elaboration on this, but did not hear back.)

By appearances, spending less on the job corps centers is simply part of the administration’s overall vision, as expressed in the Big Beautiful Bill. It’s one where we spend less on poor people and give more to the wealthy and pile on more debt anyway.