Trump Megabill Poses Economic Threats to USVI

    Trump Megabill Poses    

  Economic Threats to USVI

M.A. Dworkin

     President Donald Trump’s ‘One Big, Beautiful Bill,’ aka the Republican Reconciliation package, aka spending and tax bill, nudged its way through the Republican-controlled House of Representatives with a 215-214-1 vote. House Republicans overcame bitter differences to deliver President Trump a major victory. If enacted it would put into law all of Trump’s taxation and spending priorities, some of which would have adverse effects on life in the USVI.

    According to U.S. Virgin Islands Congresswoman Stacey E. Plaskett, the bill will make everyday life more expensive for Americans and remove programs which give opportunities and support for a better life. It includes the largest cuts to healthcare in American history. This loss of funding -nearly one trillion dollars - will eliminate healthcare coverage for at least 13.7 million Americans and make it harder to access vital medical services. In Medicaid alone, funding is cut by $730 billion, which will leave 7.6 million people uninsured. The Virgin Islands presently has 21,000 Medicaid enrollees, many of whom will be impacted through loss of service or disenrollment. 

     Medicare funding will be cut by more than $500 billion and vital programs including the Social Services Block Grant - which provides more than $4.2 million to the Virgin Islands will be eliminated until 2034. With 20,000 Medicare enrollees in the U.S. Virgin Islands services are sure to be impacted. Federal funding for the Virgin Islands’ Meals on Wheels Program and the Low-Income Home Energy Assistance Program (LIHEAP) will also be eliminated until 2034. 

     Despite Congresswoman Plaskett’s success in securing a Republican lead for the Rum Cover Over legislation, the reconciliation bill, in its present form, does not provide the increased Rum Cover Over rate. The Rum Cover Over is the rebate of federal excise taxes on distilled spirits produced in or imported into the rest of the United States from the Virgin Islands and Puerto Rico.

     During the 18-hour markup in the Ways and Means Committee for the tax provisions of the reconciliation bill, Congresswoman Plaskett (a member of the Committee) offered an amendment to increase the rate of the Rum Cover Over, to publicly demonstrate bipartisan support for the provision. 

     “I will continue to work with my colleagues, Democrats and Republicans, to secure the increased Rum Cover Over rate of $13.25, both retroactively and with an extension for the Virgin Islands and Puerto Rico,” Congresswoman Plaskett stated.

     The Congresswoman believes the bill harms efforts to lower energy costs, increase clean energy manufacturing and jobs, and eliminate economic assistance for communities on the frontline of the climate crisis. Unobligated funds will be rescinded from Joe Biden’s Inflation Reduction Act programs including Justice Block Grants, State-based Home Energy Efficiency Contractor Training Grants, and the Greenhouse Gas Reduction Fund. One of these programs that is already in place for Virgin Islanders is the Solar for All Program, which provided $62.5 million for homes and businesses.

     Republicans also voted to cut $35 billion in funding for the Supplemental Nutrition Assistance Program (SNAP) which includes children, working families, seniors, veterans and people with disabilities. This includes a $1 million cut to the Summer Electronic Benefit’s Transfer (EBT program) which gives food assistance to children when they cannot rely on school lunches. This will impact the 15,000 plus VI residents who rely on SNAP for access to nutritious food for their child’s wellbeing   

     What the House passed is an opening bid as the process now shifts to the US Senate, which must pass its own version of a tax and spending bill. Senators will be gauging the public reaction to the House bill and what critics are calling a reverse transfer of wealth since it takes benefits from lower-income Americans in order to cut taxes, primarily for the wealthy. The bill also guts many of Joe Biden’s signature policies on student-debt and climate transition efforts. Whatever the outcome, the investment community remains worried about the costs, notably a $4 trillion boost to the nation’s debt limit over the next decade which presently stands at $36.2 trillion.  

     “This bill is a wholesale betrayal of the working class and the future of America,” said Congresswoman Plaskett. “The nonpartisan Congressional Budget Office found that the bottom 10% - working and middle-class Americans - will be 4% poorer in household wealth under this bill, with most of the benefits going to the top 10% of Americans. Not only does the bill make the largest healthcare cuts in our nation’s history, it also makes the largest cuts to food assistance, energy projects and Pell Grants. All to give additional money to the wealthiest Americans - an average of $278,000 per year, $762 per day, to the top 0.1% of Americans. This bill is cruel, shameful, unfair and un-American.”