Business
Column: The GOP attack on the safety net and middle-class programs begins to take shape
No one can be surprised that Republicans are hoping to exploit their Washington trifecta — the White House and majority control of the House and Senate — by implementing vast federal budget cuts in order to save their 2017 tax cuts from expiration.
Now we’re beginning to see some meat on the bare bones of GOP policies, thanks to a “menu” of fiscal policy reforms recently leaked to Politico.
The one-page document, which Politico reports was produced by the House Budget Committee chaired by Rep. Jodey Arrington (R-Texas), lists dozens of cutbacks adding up to supposed savings of as much as $5.7 trillion over 10 years.
We ought to be able to unleash growth through tax cuts … and we ought to be able to bend the spending curve.
— House Budget Committee Chair Jodey Arrington (R-Texas)
The primary near-term goal appears to be staving off the expiration next year of the 2017 tax cuts, which disproportionately benefited corporations and the wealthy.
Many of these proposals are vague, presumably deliberately, though the drafters surely know the details. The ideas tend to match proposals that have been advanced by congressional Republicans in the past, and include some that were implemented by the first Trump administration and reversed or dropped by the Biden White House.
The main targets, moreover, are programs that the GOP has advocated paring back or eliminating for years, such as Medicaid, the Affordable Care Act and food stamps. Cuts in some programs are described in the “menu” under misleading headings.
Proposals that would cut Medicaid benefits or eligibility for thousands of Americans are titled “Making Medicaid Work for the Most Vulnerable.” A sheaf of proposals to raise costs for Obamacare enrollees comes under the anodyne heading, “Reimagining the Affordable Care Act.”
Arrington hasn’t commented publicly on the leaked document. His committee hasn’t responded to my request for comment. But he has made his name as a budget hawk: “We ought to be able to unleash growth through tax cuts,” he told the Wall Street Journal after the November election, “and we ought to be able to bend the spending curve.”
How many of these proposals can actually be enacted by the current Congress is unclear, since the GOP majority is narrow in the Senate and razor-thin in the House. Some proposals could hit hard in states and districts represented by Republicans. But the theme of the proposals is unmistakable — safety net programs and several Biden initiatives are on the chopping block.
Let’s examine some of the lowlights:
—Medicaid: Hostility to this federal-state program, which provides healthcare for low-income households, is a Republican hobbyhorse.
The proposal would change Medicaid into a block-grant program that provides federal assistance to states based on their population. As I’ve reported in the past — including when Trump proposed the change during his first campaign for office — block grants are just budget cuts in disguise. They’re invariably aimed at antipoverty programs.
Block-granting Medicaid would sap states’ ability to respond to changing conditions driving up healthcare spending, such as the COVID pandemic. The committee asserts that this change would yield as much as $918 billion in savings over 10 years. That’s the equivalent of about 15% of the federal share of Medicaid spending — potentially a major hit to state budgets.
The committee also advocates paring back the federal share of Medicaid spending on enrollees signed up under the ACA’s Medicaid expansion, which brought childless low-income adults into the program, to the percentage paid under traditional Medicaid. The ACA set the federal share for Medicaid expansion at 90% of costs.
The federal share in traditional Medicaid averages about 69% but varies by state, from a minimum of about 60% to a maximum of 83%. So this change, which the committee pegs at a 10-year savings of $690 billion, would place a further strain on state budgets. The proposal also would reduce the federal share of Medicaid administrative expenses, set by law at no less than 50%.
The committee also advocates imposing work requirements on Medicaid recipients. It claims that this would save $120 billion over a decade, but that could be achieved only by throwing thousands of enrollees out of the program. We know this because that’s exactly what happened when Arkansas tried it during the first Trump term.
The work rules did nothing to reduce joblessness, exacerbated a healthcare crisis, and raised administrative costs for the state. The Arkansas program was overturned by a federal judge, who also blocked other red states from proceeding. The Republican love for this policy despite ample evidence of its failure remains a mystery.
—Public assistance: Republican attacks on the most economically vulnerable Americans continue apace. The committee proposes reducing federal spending on Temporary Assistance for Needy Families (TANF), the federal-state program generally described as “welfare,” by 10%, to produce $15 billion in savings over a decade.
This is nothing but a cruel hit on America’s most desperate households. In no state do TANF benefits reach even 60% of the poverty level for a family of three. In 17 states — mostly those with large Black populations — they’re below 20% of the poverty level. In all but 11 states including California, according to the Center on Budget and Policy Priorities, TANF benefits were eroded by inflation between 1996 and 2023, sometimes by more than half.
A related proposal would reinstate the tightened standards for the “public charge” rule instituted in the first Trump term. This malevolent policy was aimed at immigrants by denying them entry or improvement in their immigration status if they were thought likely to access public assistance programs.
Trump added Medicaid and other noncash programs to the traditional roster of cash programs such as food stamps as signs the recipients would become a public charge.
As then-California Atty. Gen. Xavier Becerra noted at the time, the change was designed not only to throw millions of people out of public assistance programs, but also to have a chilling effect that would keep people who need healthcare and other help from seeking it. The Trump rule succeeded in doing so, according to an analysis by KFF; it was rescinded by Biden.
The menu lists “SNAP reforms” as the source of $22 billion in savings over a decade. It doesn’t specify the “reforms” sought in the food stmp program, but simple math suggests that they would involve either throwing people out of the program or reducing benefits, which currently average $6-$7 a day per person.
—The Biden Agenda: Other elements of the GOP menu take aim at key initiatives passed under Biden, including many that had bipartisan support.
It proposes dropping the green-energy provisions of the 2021 infrastructure bill, which included funding to modernize the nation’s public transit systems, building a national network of electric vehicle chargers and converting thousands of school buses to electric energy. The committee claims this would save $300 billion over 10 years, but since much of this spending is going to red states and conservative districts, rescinding it might be a tough lift for the GOP.
—The coming emergencies: The committee proposes to place restrictions on emergency spending — limiting the spending to the “recent average” to produce $500 billion in savings over a decade. This sounds like the elevation of hope over reality, since recent emergencies include not only the California fires, but tropical storms that leveled whole communities from Florida and Louisiana to Tennessee, North Carolina and Pennsylvania last year. Mother Nature, plainly, doesn’t pay much attention to budgetary posturing. Global warming is likely to raise the cost of emergency relief, not reduce it.
Politics as well as natural conditions will get in the way of these policies’ implementation. But it’s worth knowing what the Republicans aspire to achieve, and assessing their intentions.
Business
C.E.O.s, and President Trump, Want Workers Back in the Office
Five years since the pandemic began, workers have grown accustomed to a script. Their bosses make return-to-office plans, which then get shelved. And then shelved again.
In recent weeks, the calls to end remote work have come back with gusto, and with authority.
On Monday, President Trump signed an executive order requiring federal department heads to “terminate remote work arrangements” and require all federal workers to return to in-person work five days a week. He previewed the move in December when he said those federal workers who refused to go into the office were “going to be dismissed.”
Some chief executives, who have long been enthusiastic about ditching remote work, have also announced full return-to-office plans. Amazon, JPMorgan and AT&T told many employees they would have to be back in the office five days a week this year. Even in popular culture, the office is making a comeback, with “Babygirl” glamorizing the blouse wearing C.E.O., “Severance” returning for a new season probing corporate psychological drama, and buzzy newsletters like “Feed Me” declaring remote work “out.”
And some workers, who have come back to in-person work of their own volition, are eager to pick up their prepandemic work routines.
Two years ago, Ellen Harwick would have said she wanted to work remotely forever. Last fall, a switch flipped.
A marketing manager for an apparel brand in Bellingham, Wash., Ms. Harwick worked remotely for two weeks in Portugal while still working on Pacific time. Suddenly, she began to crave office chatter.
“Something just shifted for me,” said Ms. Harwick, 48. “Working from home was really novel for the first bit, and then I just felt isolated.” She is now back in the office five days a week.
But many proponents of remote work, who underscore the benefits it offers to people with caregiving responsibilities, voiced concern about flexibility evaporating entirely.
“It’s very challenging to find child care that allows you to be in the office 9 to 5,” said Sara Mauskopf, the chief executive and founder of Winnie, a start-up that connects families with child care providers. Her company is fully remote.
Amazon’s return to office began on Jan. 2, when the company instructed most workers to come in five days a week, up from the three days required as of May 2023. In some locations, the deadline has been postponed as the company reconfigures office space. Andy Jassy, the company’s chief executive, told employees in a memo that returning to the office would better allow workers to “invent, collaborate and be connected” to one another and to the company culture.
“Before the pandemic, it was not a given that folks could work remotely two days a week, and that will also be true moving forward,” Mr. Jassy wrote.
JPMorgan told employees that in-person work would support better mentorship and brainstorming. The company will start rolling out its return to office in March.
“We know that some of you prefer a hybrid schedule and respectfully understand that not everyone will agree with this decision,” JPMorgan wrote in a memo to employees. “We feel that now is the right time to solidify our full-time in-office approach.”
Many work force experts point out that executives have wanted people back in the office for a while, for the purposes of building culture and relationships. What has changed, they say, is that employers feel they have more leverage now that the labor market is not quite as tight as it was at the height of the Great Resignation, when there were more open jobs for the number of unemployed people.
“It becomes like another dimension of compensation — in a really tight labor market, employees get their way more, employers might not pressure them to come back because they might want to quit,” said Harry Holzer, an economist at Georgetown University. “In a labor market where there’s more slack, employers might be less worried about that.”
Sometimes a return-to-office push has less to do with building an office culture and more to do with cost. Nick Bloom, an economist at Stanford University who studies remote work and advises executives on hybrid arrangements, said he had seen some companies press employees to return to the office as a way to reduce head count, understanding that calling all workers back would encourage some to quit.
“The waning of the D.E.I. movement has made it a bit easier,” added Mr. Bloom, referencing the backlash to corporate diversity initiatives, and explaining that women and employees of color have tended to voice more support for remote work in surveys.
In spite of these high-profile efforts to get workers back five days a week, many other employers are holding on to a hybrid approach.
Data from a Stanford project tracking work-from-home rates shows that over one-quarter of paid full days in the United States are worked remotely. And about three-quarters of Americans whose jobs can be done remotely continue to work from home some of the time, according to Pew.
One of the reasons that hybrid work has remained so sticky is that workers have made clear their preference for flexibility. Nearly half of remote workers surveyed by Pew said they would consider leaving their jobs if their employers no longer allowed them some remote flexibility. At Amazon, corporate workers staged a walkout in May 2023 protesting R.T.O. Some employers said they had no plans to change course from hybrid arrangements.
“We are committed to providing flexibility to the work force and believe the hybrid-flex approach allows teams to collaborate intentionally,” said Claire Borelli, the chief people officer at TIAA, an investment firm that called its employees back to the office three days a week in March 2022.
Some remote work stalwarts say that the policy has had no impact on productivity and that it has helped employee retention. When Yelp’s lease came up for renewal in 2021, the company decided to shift locations and sublease a smaller space from Salesforce. The company now allows employees to work fully remotely, bucking broader return-to-office trends.
“At this point, we almost drop the descriptor of remote work — it’s just the way we work,” said Carmen Amara, the company’s chief people officer.
Ms. Amara said any skepticism the company faced over its remote policy went away because of bottom-line results. The company reported record net revenue and profitability in the last quarter of 2024, as well as a 13 percent decrease in turnover since 2021.
But with big names like Amazon and JPMorgan returning to the office in full force, and with President Trump insisting that the federal work force do the same, the commercial real estate industry is tentatively optimistic, according to Ruth Colp-Haber, the chief executive of Wharton Property Advisors, a real estate brokerage.
Office occupancy is still shaky — a little over half of what it was prepandemic — according to Kastle, a workplace security firm whose “return-to-office” barometer has reflected the ups and downs of remote work since 2020. But that is up from what it was in 2022.
“These things take a while to work their way into the numbers, but there’s no question the momentum is on the positive side,” Ms. Colp-Haber said. “For a variety of reasons, one of them being the push by big companies to have five days a week back in the office, we’re seeing greater demand for office space.”
Business
Musk Is Likely to Get a West Wing Office for His Cost-Cutting Project
Elon Musk, the world’s richest man, is likely to be given office space in the West Wing, putting him close to President Trump as Mr. Musk steers a project that aims to cut as much as $2 trillion in government spending, two people with knowledge of the planning said on Monday.
Mr. Musk had been expected to be situated in the Eisenhower Executive Office Building, which is in the White House complex but not in the West Wing proper. But he has for many days been asking about his level of access, signaling a desire for proximity to Mr. Trump, according to the people.
Mr. Trump had wanted Mr. Musk to have the space, one of the people said. Mr. Musk has been given a badge for the White House complex and was said to be working there on Monday. He has filled out paperwork to be brought onboard for the role and already has a government email address.
Trump officials and an official with the so-called Department of Government Efficiency, the cost-cutting project that Mr. Musk leads, did not respond to requests for comment.
Mr. Musk spent time on Sunday at the Washington headquarters of his rocket company, SpaceX, before speaking at Mr. Trump’s inauguration on Monday. His government-cutting team has largely spent the past two months at the company’s downtown offices, joined by a number of engineers who hail from Silicon Valley and are planning to be dispersed across the federal government, with a goal of placing about two people at each major agency.
At least some of these employees carry navy blue mesh baseball caps in all-white capital letters reading “DOGE,” as Mr. Musk’s project is informally known.
Many aspects related to Mr. Musk’s efforts have been shrouded in secrecy. It remains unclear whether he is going to become a “special government employee” for his project to recommend dramatic cuts to federal programs. The Department of Government Efficiency is not an official department.
His allies have been considering his options over the last several weeks, with an eye on making sure that he is minimally restricted by ethics laws. The question of Mr. Musk’s formal status carries legal ramifications because different rules apply when government work is performed by private citizens or by officials.
The different legal categories include conflict-of-interest restrictions for government employees that could be significant since Mr. Musk’s companies have billions of dollars in government contracts, and requirements about when deliberations may be kept confidential or must be performed in public view that could affect the rollout and reaction to his proposed cuts.
Mr. Musk has already played a major role in placing personnel throughout the federal government, including in areas that overlap with his businesses. His allies have been interviewing candidates for senior jobs at agencies including the Pentagon and State Department. And Mr. Musk has weighed in personally on key roles. He successfully pushed for Troy Meink to be chosen as secretary of the Air Force, according to three people with direct knowledge of the situation.
Mr. Meink ran the Pentagon’s National Reconnaissance Office, which helped Mr. Musk secure a multibillion-dollar contract for SpaceX to help build and deploy a spy satellite network for the federal government.
A priority for Mr. Musk has been avoiding triggering a law that requires advisory committees that include private citizens to conduct their work in public view. Becoming a special government employee could be a step toward doing that.
While special government employees must fill out financial disclosure forms, that status comes with more flexible rules than what is required of regular officials. In particular, Mr. Musk, one of Mr. Trump’s top financial supporters, could avoid any public release of such information if he took no salary.
A federal ethics law aimed at preventing conflicts of interest generally makes it a crime for any government employees, including special temporary ones, to participate in official matters in which they, their families or their organizations have a financial interest.
SpaceX has contracts with the government to send astronauts and satellites into space. Mr. Musk’s Tesla electric car company is affected by government policies like subsidies to encourage more production of batteries and chargers inside the United States and to make it easier for consumers to buy such vehicles.
Under the ethics law’s terms, however, Mr. Trump could exempt Mr. Musk from that limit by granting him a written waiver.
Despite the restrictions that come with official status, if not only Mr. Musk but all of his staff members on the project become regular or special government employees, the effort could avoid triggering other legal issues. Many recruits for the cost-cutting project are expected to be formal members of existing departments, not special government employees.
In particular, the project might be able to avoid the Federal Advisory Committee Act, which regulates boards, panels, councils and other types of committees that work with people from outside the government to provide advice to the executive branch.
That law says that all meetings of such committees are to be conducted in public, and all the documents submitted to such a panel or produced by it are also supposed to be available to the public.
Business
State Farm expands renewal offers to all L.A. County policyholders slated to have been dropped
State Farm said Thursday it was expanding an offer to renew residential policies it had intended to drop last year to all Los Angeles County customers.
The decision applies to policies held by homeowners, owners of small rental properties and residential community associations facing non-renewal notices that had not gone into effect as of Jan. 7, when the Los Angeles fires began.
On Wednesday, the insurer told the Times it would offer renewals on those terms to any policyholder affected by the Palisades, Eaton and other fires that broke out in the county. The insurer estimated that it would apply to roughly 70%, or 1,100, of the 1,626 residential policies it had in Pacific Palisades’ primary 90272 ZIP Code when last year it announced a slate of non-renewals.
The offer does not apply to policies that had already lapsed when the fire started on Jan. 7. State Farm is the largest home insurer in the state and has 250,000 residential policyholders in Los Angeles County.
The Department of Insurance said that among the thousands of policies State Farm had targeted for nonrenewal, more than 7,600 were in the Palisades fire zone. There were also 525 more in San Gabriel Valley’s Eaton fire and additional policyholders elsewhere but an exact number was not available.
It’s unclear how many of those policies, or others outside the fire zones, had already lapsed prior to Jan. 7. However, State Farm said about two thirds of the policies it had targeted for non-renewal are still in force.
“This decision reflects our commitment to supporting our customers and goes beyond the Department of Insurance’s request. This is an evolving situation, and our focus remains on our customers,” State Farm spokesperson Bob Devereux said Thursday.
State Farm said in March that it would not renew roughly 30,000 homeowners, rental dwelling owners and residential community associations, as well as business properties. It also said it would stop offering commercial polices to apartment owners and not renew roughly 42,000 of those policies in place. Renter’s policies that insure a tenant’s belongings were not affected.
Rental dwellings are defined as having one or two rental units, while commercial apartment policies cover three or more, State Farm said. Residential community associations include homeowner and condominium associations.
That decision by the Bloomington, Ill., insurer has drawn outrage given the enormous scale of the Palisades and other fires in Los Angles County, which have damaged or destroyed more 12,000 structures and killed more than two dozen people.
State Insurance Commissioner Ricardo Lara had urged insurers last week to suspend pending nonrenewals in the Palisades and Eaton fire zones.
“State Farm is setting the tone for other insurance companies to follow and we are going to push for this for other companies as well,” Lara spokesman Michael Soller said Thursday in response to State Farm’s latest announcement.
Lara announced this week he had expanded the boundaries of a moratorium he issued last week that bars insurers from issuing new cancellation or nonrenewal notices for one year. It applies whether or not homeowners have suffered a loss.
The expansion adds 22 ZIP Codes to Pacific Palisades and Eaton fire zones, and for the first time protects homeowners living in the Hurst, Lidia, Sunset and Woodley fire zones.
The insurance commissioner does not have authority to suspend nonrenewals previously sent to policyholders.
Soller said that under existing law if policyholders were notified about a nonrenewal but the policy was still in effect and they experienced a “total loss,” State Farm is required to offer them two policy renewals anyway. However, that law does not apply to damages that are less than a total loss.
Devereux said that the policyholders with total losses would get two renewals, as required by law.
State Farm said Thursday it has received more than 7,850 home and auto claims and has already disbursed more than $50 million to fire victims — numbers it expects to rise.
Jon Farney, chief executive of State Farm Mutual Automobile Insurance Co., parent of California subsidiary State Farm General, told the Times in an interview Tuesday that the fires already are the largest wildfire disaster the insurer has ever experienced. State Farm is the largest property and casualty insurer in the country.
“We are in the business of helping people recover, and that’s exactly what we’re doing right now to those impacted by the fires. It’s just such a horrible tragedy,” he said, before State Farm suspended its pending non-renewals in the L.A. County fire zones.
However, he said it was too early to determine the damages, though at least one estimate has put them over $200 billion, which could exceed Hurricane Katrina and make it the most expensive disaster in the nation’s history.
“This early in this kind of event, especially as it’s still ongoing, we don’t have information of how big the event is going to be for us, let alone for the industry,” he said.
He called the company’s decision in March to not renew 72,000 policies very difficult, but said it was driven by calculations that State Farm could not afford to take on more risk due to the possibility of being overwhelmed by claims in a catastrophe.
“You have to manage the amount of concentration that you have and the financial risk that you have, so we are positioned to ensure that we can keep our promises,” he said.
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