June 2 Federal Update: House Budget Bill Threatens SNAP, Medicaid, and Anti-Poverty Programs

On Thursday, May 22, the U.S. House of Representatives passed a sweeping budget bill, H.R.1, with 215 Representatives voting in favor and 214 against. The bill will significantly impact core health, nutrition, and anti-poverty programs and strain the nonprofit sector’s ability to respond.

What’s At Risk

• Medicaid and Children’s Health Insurance Program (CHIP): The bill imposes frequent eligibility checks, tedious documentation, and work requirements that could cause many eligible individuals to lose coverage.
• Supplemental Nutrition Assistance Program (SNAP): Added work requirements and reduced state flexibility could strip food assistance from millions, including older adults and veterans.
• Earned Income Tax Credit (EITC): New verification hurdles impose burdensome documentation requirements that may prevent low-income working families from accessing the tax credit.
• Student Loans: The bill imposes unnecessary barriers to entering higher education by adding caps total loan amounts, eliminating key deferments, and limiting forbearance eligibility.

Contact your Senators to oppose these harmful provisions.

CMS Issues a Dear Colleague Letter Informing States of Increased Federal Oversight of Medicaid Expenditures

To comply with the executive order, “Ending Taxpayer Subsidization of Open Borders,” the U.S. Centers for Medicare & Medicaid Services announced increased financial oversight of Medicaid funding. States found to be improperly allocating funds to noncitizens will be subject to recoupment of the federal share.

CMS included focused reviews of Medicaid expenditures reported by states on the quarterly CMS-64 and in-depth financial management reviews as potential oversight initiatives. The agency encouraged states to review their policies, internal controls, public assistance cost allocation plans, and IT systems to ensure that they are claiming medical assistance and administrative expenditures in accordance with federal law.

The Department of Education Announces Additional Funding for the Charter Schools Program

The Department of Education announced an increase in the Charter Schools Program (CSP) funding by $60 million for FY 2025, raising the program’s total budget to $500 million. Secretary McMahon additionally announced a new grant opportunity through CSP, the Model Development and Dissemination Grant Program. This program aims to showcase and share strategies that are helping charter schools across the country innovate and succeed.

The Department has also released Notices Inviting Applications for five additional 2025 competitions under the CSP, including the State Entities, State Facilities Incentive Grants, Credit Enhancement, Charter Management Organizations, and Charter School Developers programs.

U.S. Senate Committee on Health, Labor, and Pensions Holds a Hearing on the State of Higher Education

Senators stressed the importance of higher education and the need for a highly educated workforce to respond to rapidly evolving technology and a competitive global economy. Witnesses and senators highlighted critical barriers, including growing unaffordability, and resulting challenges, including rising shortages of critical health professionals. Alongside members, the Executive Director of the Student Borrower Protection Center warned of the imminent financial crisis student loan borrowers are expected to experience through administrative policies, including forced collections against borrowers in default.

Witnesses and senators affirmed the need for comprehensive reform and innovation. They highlighted declining trust in institutions of higher education and discussed the unique role that faith-based institutions, historically-Black colleges and universities, and community colleges hold. They encouraged increasing access, affordability, and accountability, including by expanding PELL grants and safeguarding student loan borrowing protections.

Updates from the Judiciary 

Federal Judge Blocks Executive Order to Dismantle the Department of Education

The United States District Court for the District of Massachusetts issued a preliminary injunction to stop an executive order that directed the Department of Education to facilitate the Department’s closure. U.S. District Judge Myong Joun additionally ordered the Department of Education to reinstate employees terminated as part of the March 11 layoff announcement.

Several advocacy groups and the Somerville and Easthampton school districts filed the lawsuit, maintaining the layoffs amounted to an illegal shutdown of the Education Department. The plaintiffs claimed the Department would not be able to fulfil the responsibilities required by Congress, including their duties to support special education, distribute financial aid, and enforce civil rights laws.

Judge Joun affirmed the layoffs would cause irreparable harm as schools would face financial uncertainty and delay, impeded access to vital knowledge on which students and educators rely, and loss of essential services for the most vulnerable student populations.

Supreme Court Holds Oral Arguments to Determine the Constitutionality of Ending Birthright Citizenship

On May 15, the Supreme Court held oral arguments to determine the constitutionality of President Trump’s executive order ending birthright citizenship.

While three U.S. District Courts blocked the injunction nationwide, the former Acting Solicitor General Sarah Harris requested that the Supreme Court Justices limit the scope of district court rulings to the individuals who brought the lawsuits forward.

The Trump Administration, alongside several members of Congress, argue that the Constitution does not grant lower-level federal courts the power to issue universal injunctions to stop an executive order from being implemented nationwide. Rather, district court judges can only issue a judgement regarding the rights of the specific individuals who filed the lawsuit. The Supreme Court’s ruling holds the potential to significantly impact judges’ response to executive orders.
The Supreme Court is expected to issue its verdict by the end of June.

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