Senate Bill: A Fiscal Catastrophe for Local Governments

WASHINGTON – AFSCME President Lee Saunders released a scathing statement after the Senate passed its version of the budget reconciliation bill, which would bring even deeper cuts to Medicaid while also slashing food assistance and public services nationwide. The bill, dubbed the "One Big Beautiful Bill," is anything but beautiful for the millions of Americans who rely on these essential programs.

“WE ARE DEEPLY DISAPPOINTED BY THE SENATE’S DECISION TO PASS A DANGEROUS BUDGET THAT TEARS HEALTH CARE AWAY FROM OVER 20 MILLION PEOPLE, LEAVES MILLIONS WITHOUT FOOD ASSISTANCE, AND SADDLES WORKING FAMILIES WITH HIGHER COSTS.”

The Senate bill, which includes provisions that would dramatically reduce federal funding for Medicaid and the Supplemental Nutrition Assistance Program (SNAP), is a fiscal catastrophe waiting to happen. The proposed cuts would result in a decline of 2.9 percent (about $700) in income for the bottom quintile, which includes many low-income individuals and families who rely on these programs for basic needs. This reduction in income would likely increase the demand for local government services, such as food banks and emergency assistance, as more people struggle to afford basic necessities.

“FROM THE CAREGIVERS WHO RELY ON MEDICAID TO KEEP THEIR LOVED ONES AT HOME, TO THE HARDWORKING PARENTS STRUGGLING TO AFFORD GROCERIES, TO THE NURSES WORRIED ABOUT THEIR PATIENTS LOSING CARE, EVERYDAY PEOPLE WILL FOOT THE BILL FOR A BUDGET THAT HANDS MORE TAX CUTS TO BILLIONAIRES AT THE EXPENSE OF OUR COMMUNITIES.”

The Senate bill also includes provisions that would impose an 80-hour a month work requirement on childless adults who are considered able-bodied and working-age, with some exceptions. However, it would also apply to parents/caregivers of children aged 14 and up, subjecting an even broader population to the paperwork and reporting requirements. This could lead to a significant number of people losing their Medicaid coverage, further increasing the demand for local government services.

“FOR MONTHS, AFSCME MEMBERS HAVE URGED CONGRESS TO REJECT THIS MORALLY BANKRUPT BUDGET AND PUT WORKING FAMILIES AHEAD OF DEBT-EXPLODING TAX CUTS FOR THE ULTRA-WEALTHY. INSTEAD, A NARROW MAJORITY IN THE UNITED STATES SENATE SOLD OUT THEIR OWN CONSTITUENTS BY GUTTING THE HEALTH CARE, FOOD ASSISTANCE AND PUBLIC SERVICES OUR COMMUNITIES COUNT ON.”

The potential long-term economic consequences of shifting the financial burden from federal to state and local governments, as outlined in the bill, are significant and multifaceted. One of the key provisions in the Senate bill is the reduction in the Federal Medical Assistance Percentage (FMAP) for states that permit Medicaid coverage for undocumented individuals. This reduction by 10% would shift a substantial financial burden to the states, which would need to find alternative funding sources to maintain the same level of services. This could lead to increased state taxes or cuts in other essential services, potentially straining state budgets and impacting the overall economic stability of the regions.

“THIS BUDGET BILL IS DEEPLY UNPOPULAR FOR A REASON: IT IS THE LARGEST TRANSFER OF WEALTH FROM WORKING FAMILIES TO BILLIONAIRES AND BIG CORPORATIONS IN AMERICAN HISTORY, AND IT WILL COST LIVES AND JOBS. BUT THIS FIGHT IS NOT YET OVER. AS THIS BUDGET BILL MOVES BACK TO THE HOUSE FOR FINAL PASSAGE, AFSCME MEMBERS WILL BE GETTING ORGANIZED AND FIGHTING TOOTH AND NAIL TO PROTECT OUR COMMUNITIES.”

“THIS IS A NO-BRAINER! YOU NEED TO STAND UP AND FIGHT AGAINST THIS BILL. DON’T LET THESE CUTS HAPPEN. THE FUTURE OF OUR COMMUNITIES DEPENDS ON IT.”

The Senate bill also includes provisions that would lower the FMAP rate for emergency services provided to low-income adults who are ineligible for full scope Medicaid because of their immigration status. This shift in costs to the states for providing services that federal law requires them to provide could further strain state budgets, leading to potential cuts in other areas or increased taxation.

“THIS BILL IS A DISASTER FOR LOCAL GOVERNMENTS. IT WILL FORCE STATES, COUNTIES, CITIES AND TOWNS TO SLASH FUNDING FOR LOCAL SCHOOLS, HOSPITALS, NURSING HOMES, EMERGENCY RESPONSE CENTERS, COLLEGES AND OTHER BASIC SERVICES OR SHUT THEM DOWN ENTIRELY.”

The bill's provisions on work requirements for Medicaid enrollees could lead to a reduction in the number of people eligible for Medicaid, further shifting the financial burden to state and local governments. The Senate bill expands the work requirement to apply to parents with children over the age of 13, which could result in a significant number of people losing coverage. This could lead to increased demand for state-funded healthcare services, further straining state budgets.

“THIS IS A FIGHT FOR OUR COMMUNITIES. WE CANNOT LET THIS BILL PASS. WE NEED TO STAND UP AND FIGHT FOR OUR RIGHTS. THE FUTURE OF OUR COMMUNITIES DEPENDS ON IT.”

In summary, the long-term economic consequences of shifting the financial burden from federal to state and local governments could include increased state taxes, cuts in other essential services, and potential strain on state budgets. These changes could have a significant impact on the overall economic stability of the regions and could lead to a reduction in the quality of healthcare services provided to residents.

“THIS IS A CALL TO ACTION. WE NEED TO STAND UP AND FIGHT AGAINST THIS BILL. THE FUTURE OF OUR COMMUNITIES DEPENDS ON IT.”