The Trump Budget: 15 Threats to Opportunity in Colorado

President Trump released his “skinny budget” on March 16, a broad outline of his priorities for the federal budget. He proposes to increase spending on defense by $54 billion and pay for it with cuts to other areas.

Based on our initial review of the data provided, we find his budget to be shortsighted. It chokes off investments that promote opportunity for moderate- and low-income Americans and shifts the costs from the federal government to states and families. It hurts many of the people who Trump claims to represent and, when coupled with his other proposals on health care and tax reform, will exacerbate income inequality.

About $8 billion, or 30 percent, of Colorado’s $27 billion total operating budget for this year comes from the federal government, most of it going to health care, human services, education, and transportation.

While important, federal funding to the states has been declining for decades when measured as a percentage of the overall economy. Nationwide, federal spending on grants to the states is lower today than it was over three decades ago in 1980. It is substantially lower than it was in 2010, with discretionary spending down by about one-third since then.

Here are some of more egregious proposed cuts and how they make it difficult for Coloradans to get ahead economically.

Education & Training

In our Opportunity Handbook, we show most jobs in Colorado by 2020 will require some education or training past high school, but the costs of college are growing faster than family incomes. The lack of skilled workers is currently holding back our economic growth.

But President Trump’s budget cuts student aid and work study programs that help low- to moderate-income students afford college. It would:

  • Cut $3.9 billion in the federal Pell Grant student financial aid program that helps students afford college when they or their families need aid. In 2016, Colorado received about $450 million in federal Pell Grants.
  • Significantly cut funding for the Federal Work-Study program that provides part-time jobs for many low- and middle-income college students to help them pay for school. This aid is shown to support improved rates of college completion and post-graduation employment. In 2016-17, Colorado colleges and universities were allocated almost $14 million in Federal Work-Study funding.
  • Close low-performing Job Corps centers that provide hands-on career and technical training for disadvantaged youth to help them get meaningful jobs.  Job Corps operates 125 centers nationwide, including one in Collbran, Colorado.
  • Impose major cuts in federal workforce training and employment program funding under the Workforce Innovation and Opportunity Act and shift responsibility for these programs to states, localities and employers.
  • Eliminate the Senior Community Service Employment Program (SCSEP) which provides job training services for low-income, unemployed seniors. Colorado is experiencing historic growth in our senior population and one of the recommendations from our bipartisan Strategic Action Planning Group on Aging is to find ways of keeping more seniors in the workforce. Colorado received $874,000 from the SCSEP in FY 16-17.
  • Eliminate the 21st Century Community Learning Centers that provide crucial before- and after-school academic enrichment programs for low-income children and their parents, a key two-generation program. In 2016-17 Colorado received $11.6 million for this program.

Health & Human Services

The largest hit to Colorado’s budget for health care will come from the proposed American Health Care Act (AHCA) currently being debated in Congress and supported by President Trump. A recent analysis by the Colorado Health Institute shows the AHCA would:

  • Cut $340 million in federal Medicaid funding in 2020, the first year of Medicaid changes, and by $14 billion over the ensuing decade.
  • Cause 600,000 Coloradans to lose eligibility for Medicaid by 2030.
  • Cut taxes by $600 billion by 2026, with almost all of it going to wealthy taxpayers.

President Trump’s budget makes numerous cuts to health research and public health including:

  • Funding for the National Institutes of Health (NIH) is cut by 20 percent or $5.8 billion. NIH is the largest source of academic medical research grants and Colorado received $350 million in NIH grants in 2016. The University of Colorado received $254 million.
  • “Reform funding” for public health and prevention services from the U.S. Centers for Disease Control and Prevention (CDC) by awarding funds through block grants.  Not much detail was provided in the budget, but some speculate that it could mean that these funds would be diverted from the CDC’s core budget. Colorado received over $66 million in 2016 from the CDC.
  • Funding to the Environmental Protection Agency for research which the Colorado Department of Public Health and Environment relies on for its work on clean air, water, and land. Dr. Larry Wolk, Colorado’s chief medical officer, said the cuts, “…will affect nearly every program in the department and every community in the state.”

Community Programs

President Trump’s budget makes numerous cuts to the Community Development Block Grants and eliminates several programs altogether, such as the Low-Income Home Energy Assistance Program and the Legal Services Corporation. The budget would eliminate funding for:

  • Meals on Wheels as part of the cuts to the Community Development Block Grant program. This is a good example of where relatively minor cuts in the budget hurt people and end up costing them and the rest of us more over the long run. Research shows programs like Meals on Wheels are effective at allowing seniors to stay in their homes which is three or four times cheaper than going to a nursing home or assisted care facility.
  • Low-Income Home Energy Assistance Program (LIHEAP) which helps seniors and others pay for their utility costs. Colorado received almost $44 million funding for this program in FY16-17. A study by the University of Colorado at Denver found inability to pay utility costs was the second highest reason given for homelessness by families with children.
  • Legal Services Corporation that provides legal services and access to the justice system for vulnerable Coloradans. The American Bar Association expressed outrage at this action which would cut $4.7 million in federal funding from Colorado Legal Services, the only agency in the state that provides free legal services to low-income Coloradans in every county of the state. Legal Services also leverages pro-bono help from other attorneys and handled 7,867 cases in 2015, most of which dealt with family law, housing, and consumer finance issues. The cut means that low- to moderate-income Coloradans will find it harder to get legal representation when challenged in court by the likes of predatory lenders.
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