Many middle-class and wealthy families will see benefits from the new legislation, but programs that help low-income families keep babies healthy have been cut back. While state money funds public schools and preschool in some cases, programs supporting the youngest children are largely backed by the federal government.
The law extends tax cuts that Trump passed during his first term in office and pours billions more into border security as the president seeks to broaden his crackdown on immigration. To pay for these initiatives, the law cuts Medicaid and food stamps — programs relied upon by poor households with children — by more than $1 trillion.
The legislation Republicans called Trump’s “big beautiful bill” is set to deliver some gains for families with children. It increases tax credits, including one that now allows parents to deduct up to $2,200 per child from their tax bills. And it introduces investment accounts for newborns dubbed “Trump Accounts,” each seeded with $1,000 from the government.
Still, advocates say they do not make up for what children are likely to lose under the new law. And they fear what comes next, as the next Trump budget proposes more cuts to programs that help parents and babies.
Over 10 million Americans rely on Medicaid for health care. About 40% of births are covered by Medicaid. Newborns, too, qualify for it when their mothers have it.
The new law doesn’t take little kids or their parents off Medicaid. It institutes Medicaid work requirements for childless adults and adults with children over the age of 13. But pediatricians warn the cuts will be felt broadly, even by those who do not use Medicaid.
The Medicaid cuts are expected to put a financial strain on health care providers, forcing them to cut their least profitable services. That’s often pediatrics, where young patients are more likely to use Medicaid, said Lisa Costello, a West Virginia pediatrician who chairs the federal policy committee for the American Association of Pediatrics.
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The ripple effects could exacerbate an existing shortage of pediatricians and hospital beds for children.
“Any cuts to that program are going to trickle down and impact children, whether that’s pediatric practices who depend on Medicaid to be able to stay open or children’s hospitals,” Costello said.
States also use Medicaid to pay for programs that go beyond conventional medical care, including therapies for young children with disabilities. Under the new law, states will foot a greater portion of the bill for Medicaid, meaning optional programs are at risk of getting cut.
Advocates worry that if an adult loses Medicaid coverage, it could ratchet up household stress and make it more difficult for parents to make ends meet, both of which can negatively impact youngsters. And parents who lose their health insurance are less likely to take their children to the doctor.
“When parents lose their health insurance, they often think that their children also are no longer eligible, even if that’s not the case,” said Cynthia Osborne, a professor of early education and the executive director of the Prenatal-to-3 Policy Impact Center at Vanderbilt University.
Advocates worry that if an adult loses Medicaid coverage, it could ratchet up household stress and make it more difficult for parents to make ends meet, both of which can negatively impact youngsters. And parents who lose their health insurance are less likely to take their children to the doctor.
The law increases the child tax credit to $2,200 per child, up from $2,000. But parents who don’t earn enough to pay income tax will still not see the benefit, and many will only see a partial benefit.
The measure also contains two provisions intended to help families pay for child care, which in many places costs more than a mortgage. First, it boosts the tax credit parents receive for spending money on child care. The bill also expands a program that gives companies tax credits for providing child care for their employees.
Both measures have faced criticism for generally benefiting larger companies and wealthier households.
“It’s a corporate business tax break,” said Bruce Lesley, president of the advocacy group First Focus on Children. “It makes their child care dependent upon working for an employer who has the credit.”
The law launches a program that creates investment accounts for newborn children. The “Trump Accounts” are to be seeded with $1,000 from the government, and children will be able to use the money when they become adults to start a new business, put the money toward a house or go to school.
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