TLDR: Republicans passed their massive megabill earlier this month – and the damage is real. Now, implementation is underway at both federal and state levels. While we can’t control every outcome, how our coalition responds – and how quickly we act – will influence how deeply the impacts are felt by workers, businesses, and communities.
Earlier this month, Congress passed their “One Bill” reconciliation package – a sweeping measure that drastically cuts federal support for essential needs like food, housing, and health care while restricting access to education and training programs that workers and businesses rely on.
The bill includes one notable bright spot: the long-overdue expansion of Pell Grants to high-quality short-term programs – an idea that NSC and our partners have championed for a decade. But that win alone can’t shield workers and families from the bill’s widespread harm.
The bottom line is that this bill turns its back on the realities that workers face – ignoring the fact that food, health care, and stability are essential to workforce participation. Basic needs are workforce needs – yet this bill cuts food assistance, and Medicaid will have devastating effects on workers. For example, between 9.9 million and 14.9 million people are at risk of losing their Medicaid health care coverage in 2034 due to harsh new work reporting requirements. That could mean as many as 173,000 people in Oklahoma and 3.5 million people in California.
It’s up to workforce advocates to shape what comes next – by taking action in state legislatures, state, and federal agencies, and in our communities to mitigate the harm. These actions must be led by those most affected, and NSC is committed to supporting that leadership and helping advance inclusive solutions.
Agencies are beginning to implement the provisions in the bill. If implementation follows the normal process, federal agencies will engage with stakeholders and states and offer an opportunity to submit comments that will inform how the law takes shape.
Some provisions in the bill, however, have tight timelines – provisions for SNAP, Medicare and education provisions will take effect before the end of the calendar year or ahead of the 26/27 school year. Decisions are being made soon, and our coalition will have to act quickly to shape how the provisions are rolled out.
While not specific to One Bill, other federal actions will impact states, workers, and businesses.
With Reconciliation bill, Congress has effectively shifted more of the responsibility for supporting working people and small businesses onto state governments, while rolling back support for clean energy businesses and adding onerous new administrative requirements to two primary work support programs – Medicaid and food assistance. These changes will cause many people to lose access to these supports.
We’ve said before that advocates for an inclusive economy can’t treat federal budget decisions as a collection of unrelated policy choices. Whether we’re talking about workforce, health care, or infrastructure dollars – this is one collective conversation about what we value most.
The bill also creates significant holes in state budgets that state governments will need to fill. As just one example, for the first time in the modern history of federal food assistance, the federal government will no longer pay 100% of the modest benefit costs for low-income families, including student parents and people enrolled in training programs. Instead, some states would be expected to pay a portion of the cost of this food assistance.
To fill all these massive budget cracks left by the Reconciliation bill, state leaders will face tough choices: scaling back their support for basic needs, shifting funds away from other needed efforts (like education) to preserve basic needs, or (the historically unpopular option) of raising taxes. Governor Hobbs of Arizona has warned that the state’s $1.6 billion emergency fund will be insufficient to backfill all of the bill’s cuts. Some states are already considering special legislative sessions this Fall to deal with shortfalls.
All of these budget effects come at a time when states need to prepare for the expansion of Pell grants for short-term credentials. If they haven’t already, states need to establish quality frameworks “identify “high-skill, high-wage or in-demand” jobs, and, ideally, meaningfully engage employers in those decisions. States should also be investing in interagency data sharing so that students have transparent outcomes and earnings data to assess potential earnings. Without investments in these key safeguards, students will be more vulnerable to enrolling in unproven programs.
Now is the time for advocates and stakeholders concerned about any aspect of the budget bill (and its impact on workers, families, and small businesses) to learn what’s at stake and mobilize for coordinated action. Over the coming weeks, NSC offer several ways to get connected and help mitigate the bill’s impacts on workers and businesses in your state:
Now is the time to turn disappointment and outrage into action – and to work together to build a more equitable, resilient workforce system – even in the face of harmful policy.
