$300 billion

Food banks and other charitable programs are sounding the alarm about $300 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP) over the next 10 years, recently adopted by the House of Representatives and now under consideration by the Senate as part of a budget reconciliation package. The changes outlined in the bill are estimated to terminate benefits for more than 3 million Americans from the program in an average month, according to estimates by the Congressional Budget Office.

Of particular concern is the impact these cuts will have in rural areas, even for those who do not receive benefits under the program. About a third of SNAP recipients live in small towns or rural areas. Further, many rural areas qualify as a food desert, or a combination of relatively high levels of poverty and low access to nutritious food options. This number stands to increase if rural grocery stores continue the current trend of dwindling numbers. The Center for Rural Affairs identified 48 of 93 Nebraska counties having census tracts or zip codes identified as food deserts, and projected that population growth will not be sufficient in these counties to emerge from food desert status. Nationwide, 95% of counties with the highest rates of SNAP recipients have few retailers that accept the benefits. Rural counties make up 77% of these areas. The National Grocers Association underscored the importance of SNAP for sustainability of rural grocery stores, sharing that in some low-income areas, more than 50% of grocery sales are driven by SNAP benefits. Even modest cuts would make it difficult for these stores to remain open, harming not only low-income consumers who will not have a nearby place to redeem benefits, but all rural residents.

Shuttered grocery stores not only pose significant consequences for food security, but rural economic health as well. These stores provide economic benefits like local tax revenue and employment. A study by the Commonwealth Fund estimates that deep cuts to SNAP would cost Nebraskans $5.4 million in state and local sales tax revenues, a $60 million decrease to the state’s Gross Domestic Product, and the elimination of about 500 jobs across the state.

$5,710

Adding to the urgency of the moment, federal agencies have submitted their budget requests to Congress for FY26. This process is separate from the reconciliation bill currently under consideration by the Senate, but also includes multiple harmful provisions.

The FY26 budget as proposed could limit access to higher education, especially for low-income Americans. The budget request submitted by the Department of Education limits Pell Grants to $5,710, reducing the maximum benefit by about 23%. The grants, available to students from low-income households, are awarded to about 30% of undergraduates each year who may otherwise not be able to afford a college education. Congress has its own proposal to substantially reduce the program as part of a broader effort to restrict higher education affordability, including changes to student loan programs, ending interest subsidies for undergraduates while they are in school, and eliminating a loan program for graduate students. Under their proposal, Pell Grants would only be available for “full time” enrollment of 30 credit hours per year, up from 24. It would also eliminate the grants altogether for students enrolled less than half time, who are often balancing work and family care responsibilities with their academic pursuits. Analysis by the Center for American Progress estimates that nearly 21,000 Nebraska students would be at risk of reduced Pell Grant funding, including about 6,600 who would lose funding completely.

Additionally, an $880 billion cut to Medicaid could threaten the stability of funding for state-level higher education programs as well. Higher education is considered a “balance wheel” for state budgets, or the first place lawmakers often look to make cuts to balance state budgets in lean economic times. Medicaid is a shared cost between the state and federal government, where at least 50% of costs are reimbursed to the states. Reduction of these reimbursements outlined in the reconciliation bill could prove devastating to state budgets, where every $1 states didn’t receive in reimbursements would have to be made up elsewhere. Studies outline the direct effect of reduced state investment in higher education, which include decreased in-state enrollment as well as detrimental credential outcomes, both in graduation rates and the quantity of credentials awarded, as well as increased tuition costs.

$40,000

As part of the reconciliation package, the Senate is considering a proposal passed by the House to raise the cap on SALT deductions, or the ability of individuals to deduct state and local taxes paid on their federal income taxes. Many Congressional Representatives have been seeking a remedy since 2017, when the Tax Cuts and Jobs Act (TCJA) capped the deduction at $10,000 a year for married couples who file jointly, consisting of property taxes plus state income or sales taxes, but not both. The SALT cap was enacted to partially pay for the 2017 tax law and only affects taxpayers who itemize deductions, which the TCJA limited by increasing the standard deduction. Since then, the cap has become so hotly contested that a bipartisan SALT Caucus was established to find an alternate solution. Some claim the deduction is a handout to high-tax states and others point to the regressive benefit relative to the federal tax costs as unsustainable. Others argue that the deduction helps avoid penalizing residents of high tax states and avoiding “double taxation”. The House Ways and Means Committee had already passed tax legislation that included a $30,000 cap, but the SALT Republicans considered the proposal insufficient and instead passed a $40,000 limit.

Analysis by the Tax Foundation finds that the increased SALT cap would primarily benefit high income earners. Their analysis points to significant benefit to the top 20% of tax earners, which they call the only group to meaningfully benefit from the proposal, even with the $500,000 income phase out.

Note: OpenSky’s office will be closed from Jun 9-June 13. We’ll be back in action after a much-needed rest for our team following the legislative session.