Introduction to the GOP Budget Cuts
In February, House Republicans passed a budget that President Donald Trump described as “ONE BIG BEAUTIFUL BILL.” It lays out Trump’s plan for federal money: tax cuts for the wealthy and increased military spending paid for by cuts to social services. Currently, the bill must pass the Senate before becoming law. And even though Trump’s initial attempt to freeze all federal funding has been blocked by two federal judges, his administration is appealing the decisions and some agencies have reportedly continued to withhold funds.
How the City Budget Works and How Much of It Comes from the Feds
New York City receives federal funding in a number of different ways: from federally-funded state programs that flow to the city, and to city programs directly. The city’s latest budget for 2025 includes $9.6 billion of federal funds — around 8% of its total budget. However, the percentage of federal money in the state budget is far higher: 39%. “New York State is pretty heavily dependent on federal money,” said Ana Champeny, the vice president for research at the CBC. “Most of this is for Medicaid and something called the Essential Plan.”
Health-care workers walk out of Bellevue Hospital, July 3, 2024. Credit: Ben Fractenberg/THE CITY
Who Will Be Most Affected by Big Cuts to Federal Money Flowing to NYC
These cuts would disproportionately hurt low-income families and other vulnerable New Yorkers, experts said. The agencies named above oversee a dizzying array of critical services, including subsidized apartments, enforcement of child welfare laws, grants for childcare and shelter for homeless families. As THE CITY previously reported, much of our local education department’s federal money funds Title I grants, which support schools that serve students in poverty, as well as money for school lunch and breakfast programs.
Are There Any Programs We Know Will Not Be Affected
The short answer: no. If the federal government takes money away from a program like Medicaid or public housing, it’s up to the state or city to decide if and how they want to make up that shortfall. And they don’t have a ton of extra money lying around — so if they want to fund specific programs, it will most likely require that they de-fund something else.
Is There a Way to Anticipate Which Programs Could Be Cut
According to Champeny, which programs face cuts is largely dependent on the priorities of the current city administration: the mayor and the City Council. “Different mayors have had different approaches to how they have done this in the past,” she said. For example, when then-Mayor Michael Bloomberg was in charge during and after the 2008 recession, he made cuts to the DOE, the Sanitation Department, ACS and even threatened to shutter firehouses.
Firefighters respond to a manhole fire on Eight Avenue in Midtown, Nov. 18, 2019. Credit: Gaspard Le Dem
Biggest Risks: Medicaid, the Essential Plan and NYCHA
As we mentioned earlier, some of the city’s programs that receive the most federal funding are Medicaid, the Essential Plan and NYCHA. Medicaid is a federal healthcare coverage program that supports low-income people. The federal government, states and localities (i.e. cities like NYC) share the responsibility of paying for the program. But the feds shoulder most of the burden. The state anticipates that federal dollars will make up about 60% of the program’s total funding this fiscal year.
People hang out outside of the NYCHA Housing complex at 344 E. 28th St on Thursday morning, August 19, 2021. Credit: Hiram Alejandro Durán/ THE CITY
Your Budget Questions, Answered
Our readers had specific questions for our newsroom about the Trump budget cuts, which we answered below. Have more questions for our reporters? We’re all ears, and do the best we can to find answers. Write to us at ask@thecity.nyc.
Benefits for Seniors
Reader Owen W. asked: I will be 71 in a couple of months, and I’ve been receiving Social Security payments for the last several years … I would like to know if the spending bill will eliminate those benefits, as well as Medicare benefits. The Trump administration has pledged not to touch Social Security or Medicare. And unlike his statements on Medicaid, the promise seems slightly more legitimate.
Transit’s Future
Reader David S. asked: Is the Gateway tunnel project in jeopardy in any way? Federal funds are a crucial part of the MTA’s capital plan: the big, multi-year budget that MTA officials say is needed to keep things from “falling apart.” The last capital plan, from 2020-2024, saw an estimated $13 billion in federal dollars.
Housing
Reader Gloria P. asked: Could rent stabilization be impacted? Rent stabilization and rent control aren’t part of city budgeting. They’re underpinned by state laws that date back to 1969, and were updated most recently in 2019 with the Housing Stability and Tenant Protection Act.
Courts and Public Defense
Reader Sarah C. asked: How could funding for legal services and public defense be affected by any federal funding cuts? The salaries of public defenders in the city aren’t paid for by federal money — it’s mostly a combination of state and city funds through large contracts to the public defender organizations.
Climate Plans
Reader Avi K. asked: What’s happening with the Fed’s Weatherization Assistance Program (WAP) and the state’s NYSERDA programs? In Trump’s Office and Budget Management memo that declared a funding freeze, he sought to pause all funding related to the Green New Deal.
Conclusion
The potential cuts to federal funding for New York City could have significant impacts on various aspects of city life, from healthcare and housing to education and transportation. While some programs may be more vulnerable to cuts than others, the city and state will have to make difficult decisions about how to allocate their resources. It is essential for residents to stay informed and engaged in the budgeting process to ensure that their needs and priorities are represented.
FAQs
Q: How much of the city’s budget comes from federal funds?
A: The city’s latest budget for 2025 includes $9.6 billion of federal funds, which is around 8% of its total budget.
Q: Which programs are most at risk of being cut?
A: Programs such as Medicaid, the Essential Plan, and NYCHA are among the most vulnerable to cuts.
Q: Will Social Security and Medicare be affected?
A: The Trump administration has pledged not to touch Social Security or Medicare, but there could be restrictions or regulatory changes that make them harder to obtain.
Q: How will the cuts affect low-income families and vulnerable New Yorkers?
A: The cuts would disproportionately hurt low-income families and other vulnerable New Yorkers, who rely on critical services such as subsidized apartments, childcare, and healthcare.
Q: Can the city fill the gap if federal funding is cut?
A: The city cannot easily fill the gap if federal funding is cut, as it would require significant reallocations of resources or tax increases.
