The Trump administration and congressional Republicans are advancing a fiscal package that would harm the financial well-being of many Oregonians. Specifically, President Trump and his allies in Congress aim to expand the 2017 tax cuts that mainly benefited the richest Americans. To pay for those tax cuts, they would slash funding for health and nutrition programs that millions of working families rely on.
The congressional budget plan is a bad deal for Oregonians who rely on these programs and for the state as a whole, as it would likely lead to painful budget cuts.
Renewing the 2017 Trump tax cuts mainly benefits the richest Americans
The Tax Cuts and Jobs Act (TCJA) of 2017 cut taxes for most Americans, but the package was deeply skewed in favor of the rich. Parts of the TCJA — specifically, the personal income tax provisions of the package — are scheduled to expire this year. Analysis of the impact of extending these provisions of the TCJA leaves little doubt that they would mostly benefit the richest Oregonians.[1]
If the Trump tax cuts are renewed without modification from the 2017 law, the richest 1 percent of households in Oregon (those making $835,000 per year and above) would receive $22,000 in tax cuts. Meanwhile, the poorest families, those in the bottom 20 percent, would see an average reduction of $100.[2] In short, the biggest tax cuts would flow to those who need it least, while leaving those who struggle to afford the basic necessities without much relief.
Additional tax cuts proposed by President Trump would make the tax code more unfair, add to the national deficit, and harm Oregon’s budget
Beyond renewal of the TCJA, President Trump has also proposed additional tax breaks that would come at a steep cost to the federal and state governments, while making the tax system more unfair.
Two such damaging proposals are exempting tips and overtime from taxation. Exempting overtime pay from taxation could cost the federal government between $680 billion and $1.5 trillion over a 10-year period, according to some estimates,[3] and in the case of tip exemption, states like Montana have reversed such provisions due to the loss of state revenue.[4] Both of these proposals in Congress would make the tax system more unfair, treating similarly situated workers differently. For example, a policy of no taxes on tips might benefit an Uber Eats driver, but not an Amazon delivery driver.
Another costly, inequitable proposal is to reduce the State and Local Tax (SALT) deduction cap of $10,000 put into place as part of the Tax Cuts and Jobs Act. This deduction cap limits the amount of state and local taxes taken off of a filer’s taxable income. Only about 10 percent of federal tax filers — the most well-off tax filers — itemize their tax deductions,[5] and thus could potentially benefit from raising the cap. In other words,like so many other parts of the tax package taking shape in Congress, allowing bigger deductions of state and local taxes will disproportionately benefit the rich.[6]
The fiscal hit from these proposed tax breaks would not only be felt by the federal government, but potentially the state as well. Oregon’s tax code automatically connects with parts of the federal tax code, meaning that tax changes at the federal tax level often become Oregon law as well, absent action by the Oregon legislature to “disconnect” from those provisions. That’s the case with the proposals to exempt tips and overtime pay from taxes and lift the cap on deductions of state and local taxes. The Oregon Legislative Revenue Office estimates that ending the SALT cap would cost Oregon about $85 million per year in foregone revenue.[7] The exemption of overtime income alone could well be in the hundreds of millions of dollars. Alabama, for instance, lost $230 million over 9 months from exempting overtime pay from taxes.[8]
Oregon could end up with less revenue at a time when it may need more resources to mitigate federal cuts to health coverage and nutrition assistance, as explained below.
Congressional Republicans want to pay for tax cuts by slashing programs that support working Oregonians
Extending and expanding on the Trump tax cuts would cost a lot of money. One estimate puts the price tag at $288.5 billion in 2026 alone.[9] Congressional Republicans effectively propose paying for tax cuts by slashing funding for programs Americans rely on, such as Medicaid, known as the Oregon Health Plan, and the Supplemental Nutrition Assistance Program (SNAP), colloquially referred to as food stamps.
The Senate and House have approved a “unified budget resolution,” which directs various congressional committees to meet certain levels of spending cuts. According to the Congressional Budget Office, Medicaid accounts for 93 percent of the spending House Republicans have targeted for cuts. In other words, cuts to Medicaid are unavoidable so long as the “unified budget resolution” is the guiding document for Congress. As such, deep cuts to Medicaid and SNAP are the only way to meet spending targets.[10]
While the specific details of how congressional committees will achieve cuts to essential programs are still being worked out, there will likely be a combination of approaches. These include kicking people off the programs and reducing the benefits that people receive.
Cuts to Medicaid impact Oregonians who get health care through the Oregon Health Plan
More than 1.3 million Oregonians are enrolled in the Oregon Health Plan (OHP), Oregon’s Medicaid program. OHP provides healthcare coverage to families with low incomes, seniors, children, and individuals with disabilities.[11] Nearly one in three Oregonians relies on OHP for access to health care. Of those enrolled, nearly half a million are people under the age of 19.[12]
A significant share of residents in every district relies on OHP for health care. The Oregon 2nd Congressional district, covering much of Central, Southern, and Eastern Oregon, and 4th Congressional district, covering the rest of Southern Oregon and half of the Oregon coast, are particularly reliant on Medicaid, with more than 35 percent of the residents enrolled in the program.[13]
Congressional Republicans are considering a variety of ways to cut the Medicaid budget that will ultimately terminate the ability of some Oregonians to access health care. While the details remain unclear at this time, it is clear they are considering a variety of options.[14]
Reduce how much the federal government pays for each person covered by Medicaid
One way Congress may cut Medicaid is by setting a fixed spending amount for each beneficiary and adjusting that figure annually for inflation. Such limits, a “per capita cap,” would reduce federal funding for states, meaning that Oregon would be responsible for covering all remaining costs. This is a strong-arm tactic by Congress to force states to use their limited funds to cover a program that is primarily the responsibility of the federal government.
If Congress were to enact a per capita cap, Oregon might need to spend between $13 billion and $18 billion over the next decade to avoid kicking people off the Oregon Health Plan.[15] In other words, to offset the reduced federal spending, the legislature would have to increase state funding for the Oregon Health Plan by 24 percent to 32 percent between 2026 and 2035.
Even if the per capita cap was limited to the people covered under the Affordable Care Act’s Medicaid expansion — that is, if the cuts were targeted at Medicaid participants with incomes below $21,597 or 138 of the Federal Poverty Level — the added cost to Oregon over a 10-year period would be somewhere between $2 billion and more than $5 billion, putting at risk health coverage for more than 641,000 Oregonians.[16]
Another approach Congress may take is to cut the federal match rates for Oregonians covered under the Medicaid expansion. Normally, the federal government pays for between 50 and 77 percent of the cost of coverage under Medicaid, with the state paying for the rest. In Oregon’s case, the federal match rate for FY26 would be 57.75 percent.[17] Under the expansion of Medicaid under the Affordable Care Act, however, the federal government agreed to cover 90 percent of the cost for the newly added population, adults up to 138 percent of the Federal Poverty Level. One of the options being discussed in Congress would eliminate the higher match rate for the Medicaid expansion population, with Congress paying only the traditional, lower match rate. Such a move would require the Oregon legislature to allocate an additional $1.4 billion (an increase of 310 percent over what the state currently allocates) to cover the 641,000 Oregonians in the expansion group, for 2025 alone.[18]
Create red tape to deter enrollment in Medicaid
In addition to shifting the cost of Medicaid to the states, Republican proposals seek to impose burdensome work requirements and create barriers to enrollment as a way of eliminating OHP participants from the program.
One proposal would require that the state renew OHP enrollees every six months rather than every year, as is currently the case. This would increase government waste, as it would require additional staff to process the higher number of enrollment applications. It would also increase the chances of eligible enrollees losing their coverage by forcing them to jump through more bureaucratic hoops.
Work requirements are burdensome and unnecessary. The vast majority (92 percent) of those enrolled in Medicaid already work, or have qualifying exemptions such as having a disability, caring for a family member, or going to school.[19] If Congress imposes work requirements to qualify for OHP, as many as 793,000 Oregonians could be at risk of losing their coverage because of the additional red tape. Past experience with this type of policy has shown that work requirements create unnecessary administrative burdens that “lead to coverage losses among both people who are working as well as people the policies purport to exempt because they have caretaking responsibilities, disabilities, or illnesses that keep them from paid work.”[20]
Disproportionately impact rural communities
People living in rural communities may also be harmed by the proposed cuts to Medicaid, which in addition to the impacts outlined above, could lead to the closure of rural hospitals, making access to health care more difficult.[21] Nationwide, SNAP participation in rural communities is higher (14.3%) than in metropolitan areas (11.9%), so cuts to food assistance will be particularly harmful to rural communities.[22]
SNAP is the nation’s most important nutrition assistance program, helping feed hundreds of thousands of Oregonians
The Supplemental Nutrition Assistance Program (SNAP) supports, on a monthly average, more than 435,000 households in Oregon, helping more than 757,000 Oregonians acquire the food they need to survive.[23] SNAP is the country’s most important nutrition program because it provides access to healthy foods for people who would otherwise struggle to afford them. It is particularly important because a large portion of beneficiaries are children and, as such, the program is a key investment in the future health of the nation.
Moreover, 41 percent of participants live with someone who currently works, and the vast majority (83 percent) of families receiving food assistance had a family member who worked in the last year.[24]
Budget cuts to SNAP could have a particularly deleterious effect on households with children. In every Congressional district in Oregon, at least one third of households participating in SNAP have a child.
Congressional Republicans may seek to pass the buck to the states to pay SNAP benefits
Over the last 50 years, the federal government has funded the cost of SNAP benefits, while the state pays about half of the administrative costs, such as the costs associated with screening for eligibility, issuing benefits, and more.
The House budget resolutions passed in April instruct the House Committee on Agriculture to cut at least $230 billion from programs under its jurisdiction through 2034. To achieve their funding reduction targets for SNAP, Congressional Republicans appear poised to make the states pay for a portion of SNAP benefits.[25] While the specific details are not known, it is evident that even passing a relatively small portion of the cost of SNAP benefits to the state would be extremely expensive for Oregon.
For example, requiring that the state of Oregon cover 5 percent of SNAP benefit costs would mean an additional cost to the state of $79 million in FY 2026, or $757 million by FY 2034.[26]
Cuts to SNAP could make food unaffordable for those with the lowest incomes
Beyond forcing states to pay for a share of SNAP benefits, congressional Republicans have proposed cutting benefits for all program participants, reducing the ability of low-income families to afford nutritious meals. In 2018, Congress directed the US Department of Agriculture to adjust nutritional guidelines along with the purchasing power of SNAP benefits so participants could afford better quality food. The Thrifty Food Plan, as it is known, was the first time the program had been updated beyond simple adjustments for inflation in nearly 60 years. Current proposals to roll back the 2021 plan would reduce benefits by an average of $1.40 per day.[27]
In Oregon, the impact on families will vary, depending on the average cost of a modestly-priced meal. For example, in Multnomah County, a modestly-priced meal would cost 91 percent more than the maximum SNAP benefit.[28] Even in more rural counties like Jefferson, Josephine, or Tillamook, a moderately-priced meal would cost more than 60 percent of the maximum SNAP benefit, making it more challenging for rural Oregonians to put food on the table.
More than three-quarters of a million Oregonians may be harmed by cuts to SNAP, while also hurting thousands of Oregon businesses.
The potential cuts to the program could lead to nearly 760,000 Oregonians who participate in SNAP being unable to afford healthy food for themselves and their children.[29] Many will switch to more affordable, but less nutritious meals, potentially leading to chronic health problems and higher health care costs for the state.[30]
Moreover, cuts to SNAP could have a direct impact on Oregon’s economy and some small businesses, like grocers. The U.S. Department of Agriculture estimates that $1 in SNAP benefits generates $1.50 in economic activity. This is in part because SNAP benefits are spent by recipients at one of the 3,500 authorized retailers in Oregon.[31] As such, the proposed cuts by Congressional Republicans are likely to result in lost revenue for these retailers.
Services that help seniors, children, and people with disabilities are also at risk
While Medicaid and SNAP may bear the brunt of the budget cuts being considered by Congress, other services that protect vulnerable populations are also at risk. These include:
- Home-care services. Programs that help seniors and people with disabilities afford basic needs, and which provide home-care such as health aides and personal care services.[32]
- Free school meals. School children could also be harmed by a proposal to slash $12 billion from the Community Eligibility Provision, a program that provides free school meals to all children in low-income school districts. In Oregon, the impact would be felt across more than 700 public schools, potentially taking away access to healthy foods from more than 285,000 children.[33]
- Rental assistance. Cuts to rental assistance are also on the table, putting families at risk of eviction or homelessness. President Donald Trump’s “skinny” budget request to Congress on May 2 would slash more than $26 billion in 2026 for rental assistance programs administered by the U.S. Department of Housing and Urban Development.[34] That threatens more than 120,000 Oregonians in 66,000 households who rely on federal rental assistance to afford modest housing. The vast majority of beneficiaries receiving rent assistance (73 percent) are seniors, children, or people with disabilities.[35] Moreover, such cuts to rental assistance could disproportionately impact people of color.[36]
Conclusion: Congressional Republicans’ budget proposals will harm many Oregonians to pay for tax cuts for the rich
In order to help pay for the renewal of the Tax Cuts and Jobs Act, tax cuts mainly benefiting the rich, congressional Republicans have set spending cut targets that require slashing Medicaid and SNAP. Hundreds of thousands of Oregonians, as well as millions of Americans, depend on Medicaid and SNAP for their health coverage and to put food on the table. Thus, the Republican budget plan amounts to paying for tax cuts for the rich by taking away health coverage and food assistance from people.
[1] Steve Wamhoff, Extending Temporary Provisions of the 2017 Trump Tax Law: Updated National and State-by-State Estimates, Institute on Taxation and Economic Policy.
[2] Ibid.
[3] Abir Mandal, No Tax on Tips and Overtime Proposals Gain Steam Across States, but Remain a Bad Idea, Tax Foundation, April 2025.
[4] Eric Dietrich. Do you earn tips? Montana now taxes them, Montana Free Press, January 2024.
[5] What are itemized deductions, and who gets them? Tax Policy Center, January 2024.
[6] Steve Wamhoff, Weakening the SALT Cap Would Make House Tax Package More Expensive and More Tilted in Favor of the Wealthiest, Institute on Taxation and Economic Policy.
[7] Email from Kyle Easton, Legislative Revenue Office, disaggregating the estimates included in Oregon’s Revenue Forecast and the Tax Cuts and Jobs Act.
[8] Mike Cason, Alabama overtime tax exemption costs schools $230 million in 9 months: will lawmkers let it expire?, AL.com, December 16, 2024.
[9] Steve Wamhoff, Matthew Gardner and Joe Hughes, Extending Temporary Provisions of the 2017 Trump Tax Law, Institute on Taxation and Economic Policy.
[10] Congressional Budget Office, Mandatory Spending Under the Jursidiction of the House Committee on Energy and Commerce, Letter to Chair Boyle and Ranking Member Pallone, March 2025.
[11] Center on Budget and Policy Priorities, Program Participation Data Dashboard.
[12] Ibid.
[13] Rhiannon Euhus, Alice Burns, and Robin Rudowitz, Congressional District Interactive Map: Medicaid Enrollment by Eligibility Group, KFF.org.
[14] Center on Budget and Policy Priorities, Republicans in Congress Are Considering Harsh Medicaid Cuts That Would Shift Costs to Oregon and Leave People Uninsured.
[15] Ibid.
[16] Ibid.
[17] Kaiser Family Foundation. Federal Medical Assistance Percentage (FMAP) for Medicaid and Multiplier
[18] Center on Budget and Policy Priorities, Republicans in Congress Are Considering Harsh Medicaid Cuts That Would Shift Costs to Oregon and Leave People Uninsured.
[19] Ibid.
[20] Gideon Lukens and Elizabeth Zhang, Medicaid Work Requirements Could Put 36 Million People at Risk of Losing Health Coverage. Center on Budget and Policy Priorities, February 2025.
[21] 2025 Budget Stakes: Rural Communities Would Be Hurt by Proposed Policies and Cuts, Center on Budget and Policy Priorities.
[22] Ibid.
[23] Center on Budget and Policy Priorities, Program Participation Data Dashboard.
[24] Ibid.
[25] Dottie Rosenbaum, Katie Bergh and Wesley Tharpe, Imposing SNAP Food Benefit Costs on States Would Worsen Hunger, Hurt States’ Ability to Meet Residents’ Needs, Center on Budget and Policy Priorities, March 2025.
[26] Ibid. at Table 1.
[27] Katie Bergh, Millions of Low-Income Households Would Lose Food Aid Under Proposed House Republican SNAP Cuts, Center on Budget and Policy Priorities, April 2025.
[28] Urban Institute, How would SNAP Benefit Cuts Affect Your Community?.
[29] Katie Bergh, Millions of Low-Income Households Would Lose Food Aid Under Proposed House Republican SNAP Cuts, Center on Budget and Policy Priorities, April 2025.
[30] Steven Carlson and Joseph Llobera, SNAP Is Linked With Improved Health Outcomes and Lower Health Care Costs, Center on Budget and Policy Priorities, December 2024.
[31] Catlin Nchako, A Closer Look at Who Benefits from SNAP: State-by-State Fact Sheets. Oregon,. Center on Budget and Policy Priorities, January 2025.
[32] Center on Budget and Policy Priorities, 2025 Budget Stakes: Proposals Would Mean Higher Costs, Less Help for Seniors.. See also: Center on Budget and Policy Priorities, 2025 Budget Stakes: People With Disabilities Could Lose Vital Health, Food and Other Assistance.
[33] Food Research Action Center and Center on Budget and Policy Priorities, Fact Sheet: School Meals Support Children’s Health and Learning, March 2025.
[34] Letter to the Chair of the Senate Committee on Appropriations from the White House Director of Office of Management and Budget, May 2, 2025.
[35] Center on Budget and Policy Priorities, Oregon Federal Rent Assistance Fact Sheet, January 2025.
[36] 2025 Budget Stakes: Cuts Would Widen Economic Disparities for Many People of Color, Center on Budget and Policy Priorities, February 2025.
