Federal budget cuts aimed at monetizing tax breaks hit local residents and those trying to help

As many Americans have struggled amid the rising costs of housing, groceries, and other essentials, social welfare services have long been a source of financial stability and security. However, since the start of the second Trump presidency, the federal government has worked to contract its spending on many of these programs.

Signed by President Trump last July, H.R.1, or the One Big Beautiful Bill Act, was a critical move towards achieving this aim. The act makes permanent expiring tax cuts passed in 2017, expands the estate and gift tax exemptions, and eliminates certain taxes, such as on tips and overtime, among related measures. To help offset this lost revenue, however, H.R.1 made significant cuts to a variety of welfare programs, including food assistance, healthcare, and student financial aid.The bill reduces work exemptions for Supplemental Nutrition Assistance Program (SNAP) beneficiaries, shifts costs of the food assistance program to states, and caps future benefit increases that may be implemented in response to inflation. 

The president has also acted without Congress to limit social spending. Last spring, he announced an unexpected $500 million cut to The Emergency Food Assistance Program (TEFAP), cancelling 94 million pounds of deliveries to food banks across the country. 

Although the majority of its funding comes from Feeding America of Eastern Wisconsin, the Oshkosh Area Community Pantry (OACP) has felt the impacts of federal cuts. In particular, Executive Director Ryan Rasmussen highlights the loss of a FEMA grant the pantry has historically been the recipient of and the cancellation of TFAP assistance.

“There were a couple of specific truckloads of federal commodities that got cut for us. One was an entire truckload of milk, and another one was an entire truckload of produce,” he said. “I don’t know why it was cut, but we got the notification that it wasn’t coming.”

The pantry has also been under pressure to fill in the gap created by the elimination of the Local Food Purchase Assistance (LFPA) Program, which reimbursed food banks for purchasing fresh produce from local growers. 

“Unfortunately, in March of this last year, LFPA was suddenly cut with no explanation as to why. And one of the things that was a direct reflection on us was about $120,000 worth of produce that we didn't see this last summer,” he said. “We've been able to fundraise about $70,000 of that $120,000 back, and it allowed us to be able to purchase some really great produce from a lot of great rural farmers.”

The subject of recurring debate and national attention, the administration has also rolled back healthcare spending. The federal government was shut down for a record 43 days as Congressional Democrats put pressure on Republicans to extend enhanced Affordable Care Act subsidies. Next year, individuals making more than 400 percent of the federal poverty level—$62,000 for an individual and $128,000 for a family of four—will lose all federal healthcare subsidies. Ryan Smith, Community Health and Outreach Manager at Partnership Community Health Center (PCHC), warns that this may lead many to lose healthcare coverage altogether.

“What we’re seeing right now is people on the higher end of the wage scale receiving tax subsidies and those folks who unfortunately don't qualify for tax subsidies because they’re over income for them, those are the people who are paying full price for a plan or darn near close,” he said.

Analysis by KFF estimates that the average premium payment for subsidized enrollees will rise to $1,904 after the enhanced subsidies expire in 2026, up from $888 this year.

Healthcare spending reform is in some cases related to the Trump administration’s controversial crackdown on the country’s immigrant communities. Smith says that changes to qualification changes will eliminate Medicaid coverage for legal permanent residents without incomes, such as elderly individuals being supported by their children.

“Medicaid has a specific rule that they don’t allow legal permanent residents who haven’t been here for more than five years to apply. So these individuals who have no income are not eligible for Medicaid,” he said. “Prior to this year, they were eligible for tax credits on the [Healthcare.gov] Marketplace. That is not the case anymore, unless they become wage earners at above 100% of the federal poverty level.”

These changes came as part of the healthcare cuts effected by H.R.1. The bill eliminates federal incentives and tax options to support states’ expansion of Medicaid and limits state-direct payments to healthcare providers, which had become essential sources of funding in underserved areas.

H.R.1 also imposes a new work or volunteer requirement of 80 hours per month to receive Medicaid coverage. Even when individuals meet these qualifications, Smith worries that the legal nuances of documenting work, disability, or other exemptions under H.R.1 could cause people to lose coverage.

“The biggest effects of that program that would be felt would be people who are eligible for the program, but the administrative burden of reporting causes them to fall off,” he said. “In the few cases of this being done in other states, that’s generally what people have learned from it.”

Smith predicts that the effects of these changes will have a disproportionate effect on some of the nation’s communities.

“In counties where there’s absolutely no competition—like really rural counties where there’s one plan and that’s it—those are generally the ones that are seeing huge increases,” he said. “The cuts are going to have an effect on our rural communities, not only potentially hospitals closing due to the lack of patient revenues from Medicaid but also people possibly getting cut off from coverage.”

The effects of such contraction of social welfare have been compounded by the recent government shutdown, which, among other issues, caused delays in distributing last month’s SNAP benefits. Wisconsin made FoodShare payments at the beginning of the month as the Trump administration withheld federal funds to do so, but even afterward the state's 700,000 program recipients faced uncertainty as the president ordered those payments to be redacted. Ultimately, recipients were able to keep the payments. 

Many who use the OACP rely on SNAP to help pay for groceries. Rasmussen notes the pantry saw an uptick in October in the number of guests using their annual emergency shop, which does not count towards the monthly two-shop limit, and says the pantry opened for two additional weekend days to provide flexibility amid a period of increased need. 

“There are about 17,000 households that utilize SNAP in Winnebago County. So, if even 30 percent of those 17,000 households had to use the pantry as their only place to receive food, that was going to be an increase of about 100 new families that were going to come to us a month,” he said. “That’s in addition to the 100 new families we were already seeing.”

Rasmussen says the OACP now serves an average 2,800 households each month, up from 1,300 when he became director of the pantry, and continues to see consistent growth. He credits the pantry’s first significant increase in its number of guests to post-pandemic economic instability.

“During COVID times, the federal government gave extra food share allotment to folks, so at that time as an example, a senior on a fixed income was getting about $120–130 of FoodShare benefits a month. When they rolled back those FoodShare benefits to pre-COVID levels, that same person was getting $20,” he said. “That also came at a time when the housing market went crazy. The cost of rent went through the roof, the cost of groceries was crazy high, the cost of gas was through the roof.”

Dr. Marianne Johnson, Distinguished Professor of Economics at UW-Oshkosh, suggests threats to SNAP, Medicaid, and other welfare programs reflect the priorities of the Trump administration. Nonetheless, she says recent cuts may come as a surprise to many in the Republican base.

“It’s a little bit of a problem in the sense that a lot of their supporters rely on food stamps,” she said. “I don’t think they thought their parts of the program were in danger. I think they thought other people’s stuff was in danger.”

The Trump administration has argued that such cuts are necessary to stem waste, fraud, and abuse pervasive within welfare programs. Many community organizations that fill in the gaps in the country’s social welfare programs are guided by a different philosophy, however. The OACP imposes no income limits, work requirements, or other barriers to its services, according to Rasmussen.

“We don’t like to use the stereotypical terms about folks who utilize our services, that they don’t have a job or don’t want to work or are taking advantage of the system. Generally, we don’t find that to be true,” he said. “There are other things happening in their lives, decisions about, do I feed my kids today or do I pay for this medical bill, or, do I pay rent this month, or do I buy groceries?”

Though the administration’s spending cuts have often had bipartisan opposition, this has not deterred the president. H.R.1 was passed through what is known as the rescissions process, which allowed the bill to be passed without concessions to Congressional Democrats or the few Republicans who voted against the policy. Johnson says that Trump’s use of impoundment and other methods of rescinding federal funding is unusual, and warns that efforts to challenge his use of executive power could trigger a governmental stand-off.

“He's mostly been successful (if you don't count that most [of his cuts] are stuck in court) because Congress hasn't insisted on the payments being made in accordance with their budgeting—but that's Congress's fault for rolling over and playing dead,” she said.

by Aria Boehler

Published December 1, 2025

Oshkosh West Index Volume 122 Issue III