What Trump’s Big Budget Cuts Could Mean for New York

Republicans in Washington, at the behest of President Donald Trump, are crafting a bill to cut spending and use the savings to pay for tax cuts that could reduce aid to New York by tens of billions of dollars, blowing huge holes in both the state and city budgets.

Under Pressure

The potential for large reductions in aid to the state and city came into focus last week when House Republicans pushed through a resolution outlining their plans for budget and tax cuts on a party-line 217-215 vote. The resolution begins a process known as reconciliation, which allows a comprehensive spending and tax bill passed by the House to get through the Senate with only 50 votes rather than the 60 votes needed if Democrats were to filibuster the bill.

But the path from the resolution to final enactment remains treacherous. All Democrats in the House are expected to oppose any reconciliation bill as they did with the budget resolution, and with only a five-seat majority House Speaker Mike Johnson will have to keep both hard right conservatives who want more spending cuts and moderates, especially in New York, who are worried about the impact on their states.

Republicans in the Senate have also indicated they are reluctant to tackle all the issues in one bill and may want smaller cuts in programs.

Big Risk for New York

Health care cuts are the biggest risk for the state, whose Medicaid program exceeds $110 billion, with almost 60% of that coming from the federal government. It covers more than 9 million people statewide and more than 5 million — 60% — of all city residents. Also vulnerable is the state’s Essential Plan, which was created from the Affordable Care Act and covers 1.5 million people making slightly more than allowed for Medicaid, with almost its entire $10 billion cost paid for by the federal government.

“The number of people and institutions you are talking about have a vast impact on public health,” said Maria Doulis, deputy state comptroller of budget and policy. “It’s a budgetary risk but it is also a public health risk.”

Food Stamps and Housing

Food stamps, another key Republican target, provide help to 1.8 million city residents, one third of whom are children and another third seniors. Cuts in the food benefits, called SNAP, could cost the city $900 million a year if it filled the gap, said city social services commissioner Molly Wasow Park last week.

“We are literally talking about taking food out of kids’ and older adults’ mouths to pay for tax cuts for the wealthiest,” she said.

With the city in the midst of an unprecedented housing crisis, Republicans have also targeted programs that New York relies on in both the resolution and in the axe that Elon Musk’s Department of Government Efficiency is taking to the U.S. Department of Housing and Urban Development.

“DOGE is trying to kneecap HUD with massive staff cuts and Congress is ready to slash discretionary spending to pay for tax breaks,” said Rachel Fee, executive director of the New York Housing Conference. “At risk are key programs that fund housing vouchers, public housing and community development and affordable housing finance.”

Governor and Mayor Respond

Mayor Eric Adams, who told his top aides not to criticize Trump, did sign on to a letter from mayors around the country opposing cuts to food programs but has been much quieter than Gov. Kathy Hochul.

Hochul has been very vocal about the damage Republican cuts could do to New York and has put a spotlight on New York Republicans in the House who had said they were reluctant to vote for the resolution but fell in line.

“Every New York congressmember who backed this should be ashamed,” she said at one point, adding later, “So I’m saying, call your members of Congress who claim they represent the people of this state and stand up to this assault on New Yorkers.”

But she added there is too little information to take any specific action.

FAQs

What does the resolution call for?
The resolution instructs the Energy and Commerce Committee overseeing Medicaid to reduce spending by $880 billion over the next decade and the Agriculture Committee, which has jurisdiction over SNAP, by $230 billion.

What is the potential impact on New York?
The cuts could blow huge holes in both the state and city budgets, forcing difficult choices and potentially leaving millions of New Yorkers without health care, money to put food on the table, or get housing help.

What is the response from the governor and mayor?
Gov. Kathy Hochul has been vocal about the potential damage the cuts could do, while Mayor Eric Adams has been quieter, signing on to a letter opposing cuts to food programs but not criticizing Trump directly.

What is the budget situation in New York?
The state has a projected budget gap of $1.5 billion for the 2022-2023 fiscal year, while the city has a projected gap of $1.1 billion.

What is the next step?
The resolution is just the first step in a long process, and the actual cuts will depend on the outcome of negotiations between the House and Senate.

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