The Republicans’ domestic policy legislation will most likely raise after-tax incomes of the richest Americans while its cuts to social spending will leave the poorest at a substantial disadvantage, according to an analysis released on Monday by the nonpartisan Congressional Budget Office.
The report also estimated that millions of low-income Americans could lose access to federal food assistance or Medicaid under the sweeping bill that President Trump signed into law last month.
This highly regressive pattern — both cutting the safety net for the poor and reducing taxes for the rich — has no precedent among large budget bills passed in the last 40 years.
The budget office’s report was an update to an earlier analysis it had issued in June. It looked at how the bill’s long list of policies would affect Americans at every level of income, estimating that the incomes for the highest 10 percent of earners would rise by an average of 2.7 percent by 2034, mainly driven by tax cuts, while those of the lowest 10 percent would fall by 3.1 percent, mostly because of cuts to programs such as Medicaid and food aid.
The gains for the top 10 percent of earners would be higher than for any other income group, relative to their income, and the bottom 10 percent would face the biggest relative losses, the analysis suggested.
The budget office also released updated estimates on the number of people who could lose benefits provided by the Supplemental Nutrition Assistance Program, once known as food stamps. The office estimated that stricter work requirements would reduce participation in the program by roughly 2.4 million people in an average month over the next decade.
The policy bill made several changes to the program, which provides food assistance to roughly 42 million people each month. The law imposes more stringent work requirements on SNAP recipients, applying them to able-bodied adults through age 64 and parents with children 14 and older. Previously, adults up to age 54 had to comply and people with dependents were exempt.
The law also makes it more challenging for areas with higher unemployment rates to qualify for work requirement waivers, and it eliminates work requirement exemptions for veterans, homeless people and certain former foster youths.
States will also have to pay a portion of SNAP benefits for the first time unless they maintain lower payment error rates. The budget office said it expected that states would respond in various ways. Some would maintain current benefits and eligibility, while others would modify benefits or “leave the program altogether.”
Some states, including Pennsylvania, have questioned whether they can continue operating SNAP if they cannot cover the extra costs of providing benefits.
The budget office estimated that the cost share change would reduce or eliminate SNAP benefits for about 300,000 people in an average month.
The budget office also updated detailed estimates about how the bill will affect the number of Americans with health insurance. Under the law, 10 million more people are expected to become uninsured by 2034. The office had published that number before, but Monday’s report included more detail about which policies would have the largest impacts.
The law’s new strict work requirement for Medicaid will have the largest impact of any other health care policy change, causing an estimated 5.3 million more Americans to become uninsured. Overall, the bill’s Medicaid policies will cause around 7.5 million Americans to lose health insurance.
In addition, its changes to Affordable Care Act marketplaces will cause around 2.1 million to lose coverage, and the elimination of Medicare coverage for certain legal immigrants who have contributed to the program for at least 15 years will cause 100,000 such people to become uninsured, according to the report. An additional 300,000 people are estimated to lose insurance because of interactions between the policies.