New York leaders recently received some good budget news with the announcement of higher-than-expected tax revenues from both the state and New York. Unfortunately, the additional billions that arrive will fail to stem a looming danger that could come to a head next year: an aggressive Donald Trump administration, with a trio of Republican governments in hand, going after tens of billions of dollars. federal grants, aid and programs the city and state receive for everything from Medicaid to building inspections.
An emboldened White House and Republican Congress could try not only to reduce but to divert funds already allocated to achieve their overarching anti-government goals, but also to punish what are considered politically hostile jurisdictions. Even if there are no drastic cuts or specific clawbacks, state and local leaders should still expect to receive less overall from the federal government and prepare to tighten their belts.
Trump has little interest in the expansive industrial policy that President Biden championed with the Infrastructure Investment and Jobs Act or the Inflation Reduction Act – efforts to invest huge sums in long-term development of national industries and public works.
The new president and his developing administration appear skeptical of all government programs and spending, with the duo of Elon Musk and Vivek Ramaswamy named to head an external advisory office aimed at significantly scaling back operations and federal budgets.
Republicans, with a slim but still present majority in the House and control of the Senate, will no doubt work to kill long-standing bogeymen like the Affordable Care Act, which they have spent the last fifteen years fighting. trim. Budgets for education, research, housing, etc. are all threatened.
The irony here is that a large portion of Trump voters pulled the lever in favor of the ex-president because they believed he would lower prices and improve their economic situation. When Trump and Musk talked about downsizing government, many of these voters envisioned a nebulous waste they say permeates federal agencies.
There is no doubt that billions of dollars are wasted every year, but does the public really want less from Medicare, VA and Social Security, three of the largest cost centers?
The feared cuts could all be implemented in full, or in part, or perhaps not at all. Trump is unpredictable and is pulled in many different directions by different interests. Some infighting within the new administration will be over the exact scope and type of federal spending cuts it wants to impose. Unfortunately, city and state leaders cannot wait for clarification that is unlikely to come before we must determine our own spending priorities.
That will involve determining where cuts can be made without making New Yorkers worse off, which means maintaining the basic services that keep people stable and giving them some financial breathing room. It also means pursuing all available options to compensate for disappearing income; we are happy that congestion pricing is back online, although it will not be enough.
