On paper, the Republican Party has long been in favor of shifting power away from Washington back to the states. The GOP budget law that President Donald Trump signed last week puts that mantra into practice by shifting the balance of support for food and health care benefits toward the states. By refusing to uphold their end of the social safety net, Trump and congressional Republicans have left it to states to somehow keep that net taut. By foisting off federal responsibility, they’ve positioned governors and state lawmakers to take at least partial blame for people who tumble off into the abyss.
Medicaid and the Supplemental Nutrition Assistance Program (SNAP) are federally funded programs that the states administer. While there have always been limits or restrictions from Congress on how those programs function, the so-called big, beautiful bill Republicans passed adds major new red tape that will most likely cut off access to those programs for millions of people.
By refusing to uphold their end of the social safety net, Trump and congressional Republicans have left it to states to somehow keep that net taut.
The cuts to Medicaid come mostly via a new set of federal work requirements for enrollees in states that expanded access under the Affordable Care Act. As The New York Times recently noted, the GOP’s legislation “leaves states with the difficult task of building out software systems to track eligibility by the end of 2026. Experts said states could face software glitches that may cause delays in enrollment or leave eligible children and parents without health care.”
This administrative burden will also fall on states that run ACA exchanges to subsidize health care. Still more paperwork will be needed to administer new work requirements on SNAP benefits, as well. We’ve already seen from past examples that these requirements make it more difficult for those who qualify to keep health insurance coverage and put food on the table while doing little to boost the employment rate. These new burdens will fall not only on residents who will need to keep on top of their proof of employment, but they will also fall on state employees. Though many are likely to already be overworked and stretched thin, they will have to do even more to administer an old program to which Congress has needlessly added more complexity.
The greater workload means a higher chance of mistakes — and states will pay deeply for any errors related to SNAP especially. Under the new budget law, states will be required to cover at least 5%, and up to 25%, of the total cost of SNAP benefits for their residents. The formula is based on each state’s payment error rates, or the amount it accidentally overpaid or underpaid its beneficiaries. As I wrote in May: “Based on an analysis from the Center on Budget and Policy Priorities, that would add roughly $3 billion to state budgets in Missouri and South Carolina over the next 10 years and a whopping $15 billion to Florida’s balance sheet.”
Beyond the new work requirements, the bill further threatens access to health care on several fronts. The reduced number of people on Medicaid in places like West Virginia will cause such a drop in patient numbers that smaller hospitals could be shuttered. The law also axes a practice known as “provider taxes” that almost every state uses to boost its Medicaid funding. That program uses taxes on health care providers, such as hospitals and nursing homes, to boost the amount of matching funds the federal government paid out. Without that funding, though, many hospitals in rural areas are unlikely to remain open.
The pain that will be felt as states start belt-tightening in anticipation will potentially kick in much sooner.
The full impact will vary from state to state, but the overall picture isn’t good. Many state governments were desperately searching for ways to balance their budgets for reasons that had nothing to do with this looming exodus of federal dollars — and then the Trump administration heaped uncertainty on top of that. Politico reported in May that California was facing a $10 billion budget deficit that could double depending on how much federal money is withdrawn. According to The City, New York’s budget is likewise expected to be tens of billions of dollars further in the red because of cuts to health care funding for legal immigrants and SNAP benefits and a reduction in housing aid.
It isn’t just Democrat-led states that will feel the impact. Purple and red states are also bracing for the economic impact. The Maine Center for Economic Policy warned in April that between the attacks on Medicaid, SNAP and education funding, the GOP’s planned cuts could “blow a $649 million hole in Maine’s state budget.” The Kentucky Center for Economic Policy issued a particularly dire warning last month:
If the law were in place now, the state would have to budget an additional $253 million to maintain SNAP enrollment based on the error rate in the current year. That is more than the $228 million the state spends on the University of Louisville and Northern Kentucky University combined; more than the $196 million it spends on the Department of Behavioral Health, Developmental and Intellectual Disabilities that provides mental and physical health, substance abuse and other services to over 175,000 Kentuckians; and the same as the cost of paying the salaries and benefits of 3,135 Kentucky public school teachers.
And beyond the direct impact of the new cuts and work requirements, other parts of the budget law will most likely affect states’ coffers, as well. For example, the massive immigration crackdown the bill finances could trigger an economic slowdown, prompting a drop in state taxes paid and an increase in the number of people who need assistance. There’s little in the law that will help them should economic conditions worsen because of the GOP’s agenda.
The political impact that these cuts will have is still uncertain: Republicans were careful to backload most of the most detrimental effects of their bill until after the next midterm elections. That leaves time for federal lawmakers to reverse some of those changes between now and then, as GOP Sen. Josh Hawley of Missouri has suggested. But the pain that will be felt as states start belt-tightening in anticipation will potentially kick in much sooner.
In their rush to pass a bill to support Trump’s arbitrary deadline, congressional Republicans have set a slow-rolling avalanche tumbling toward their own constituents and state-level colleagues. In doing so, they made sure blame for triggering the catastrophe wouldn’t fall solely on them. Instead, they’ve made the states their accomplices in pain, drafting governors and state lawmakers to do the dirty work of stripping people of the help they need to survive.