6 Ways Trump’s Budget Proposal Could Affect Your Bottom Line

President Trump's proposed budget would reduce services to the poor and elderly. Here are the programs that stand to be hit hardest.

Do you commute to work, have a family member who’s out of work or know anyone who’s ever lived in a flood zone? If so, you should be paying close attention to that most Washington of annual rituals — the making of the federal budget. President Donald Trump’s dramatic budget has one clear winner (defense) and a long list of losers so you don’t want to ignore his proposals until it’s too late to influence the final outcome. So here’s our guide to some of the 80 or so programs that are targeted for deep cuts or outright elimination by Trump’s accounting.

Before we start, it’s important to understand that the federal budget process is a marathon, and we’re only at mile marker one. The White House has only released the so-called “skinny” budget. Many of the cuts it describes are not yet specific, and there’s a more detailed budget to come, followed by Congress’ own ideas about how to spend Americans’ money.

Still, there are enough programs called out specifically by Trump’s budget that one can imagine how America, and your community, might change were the budget to pass as is. The Trump administration did not immediately respond to request for comment on how the budget proposal would affect taxpayers. (On the note of budgets, here are some helpful tips for getting control of your personal budget.)

Changes for Train Travelers

If you like train travel, you might want to get your trips in now. Trump’s budget directly calls for the elimination of long-haul routes on Amtrak. These are largely used by tourists and have often been criticized as money-losing and unnecessary, particularly when the busy Northeast Corridor between Washington D.C. and Boston is overcrowded and profitable. So people who tour by train may need to spend their money on other travel options, like road trips or air travel. The good news for east coasters is some of those savings are being directed to improve service on the nation’s busiest rail line.

The Trump budget actually calls for a 13% overall cut at the Department of Transportation, which will impact local rail projects, too — like Seattle’s decades-long effort to get a light rail system off the ground. The proposed budget cut would actually half its funding. Some 70-such projects around the country are on the chopping block. So is a program named TIGER, which helped local governments pay for so-called “multi-modal” projects — often bike trails.

“Future investments in new transit projects would be funded by the localities that use and benefit from these localized projects,” the proposal says.

How Floods Could Cost More

Do you live near a flood-prone area or care about someone who does? Your life could get more complicated under Trump’s budget, which eliminates the Flood Hazard Mapping Program.

Flood maps are controversial because when they change — and change always means “expands,” because development almost always expands — they require more homeowners to buy flood insurance. On the other hand, the consequences of failing to update flood maps can be devastating, which America learned the hard way during Hurricane Katrina. People buy homes thinking they are safe from floods, and a developer may build on unsafe land. (And if you have flood insurance, it’s important to know what it does and doesn’t cover.) And when a flood comes, recovering from it without insurance assistance can be really expensive.

The budget says Trump’s administration will “explore other more effective and fair” ways to pay for new maps. Detractors oppose anything that makes flood insurance premiums more expensive, however, as that might lead to folks dropping flood insurance, creating another long-term headache.

Need a Lawyer? It’ll Cost You

If you’ve ever had a dispute with a landlord or a domestic partner and turned to a non-profit legal aid service for help, you might have been helped by the Legal Services Corp. Since 1974, Legal Aid has provided access to America’s otherwise expensive court system through a network of 133 independent nonprofit legal aid programs in 800 offices around the country. The program is targeted for elimination in the Trump budget. Some 1.9 million Americans used legal aid in 2014, the last year for which data is available, the organization says.

“Our nation’s core values are reflected in the LSC’s work in securing housing for veterans, freeing seniors from scams, serving rural areas when others won’t, protecting battered women, helping disaster survivors back to their feet, and many others,” said Linda Klein, bar association president, in a statement supporting the LSC. “The LSC embodies these principles by securing the rights of the least fortunate among us.”

Military Base Cities, Cyber-Warriors & Veterans Will Benefit

Trump’s budget calls for a huge increase in defense spending, with general guidance suggesting cities and companies that support nearly every branch of the military would benefit. The budget calls for fresh spending on munitions, warships, F-35 Joint Strike Fighters and a “fully equipped” Marine Corps. It also calls for large investments in cyber security, which appears under several budget items, including a $1.5 billion program within the Department of Homeland Security to “protect federal networks and critical infrastructure from an attack.” If you work in these fields, this budget could be good news for you.

The Department of Veterans Affairs also gets a sizable budget bump of 6%, including $4.6 billion to improve VA health care and “patient access and timeliness of medical care.” The funds will help continue the Veterans Choice program, which lets vets choose private providers when seeking care.

Out of Work? There’s Less Money for Retraining

Unemployed Americans, particularly older Americans, who seek retraining help may have a harder time under Trump’s budget. The Labor Department, which funds many such programs, is targeted with a 21% cut. Federal funding for local job training programs would be decreased, “shifting more responsibility” to local authorities. Specifically, Trump’s budget eliminates the $434 million Senior Community Service Employment Program, a community service and work-based job training program for older Americans that prioritizes help to veterans. Trump’s budget specifically calls out the program as “ineffective,” saying as many as one-third of participants fail to complete it, and only half of those get jobs.

Vouchers & Charters Win, After-School Programs Lose

For fans of charter schools and other open-enrollment public school initiatives, Trump’s budget includes a lot of new money and support. There’s $250 million for a new school choice program, $168 million more for charter schools, and $1 billion more for voucher-style programs that let local funding “follow the student to the public school or his or her choice.”

Trump’s budget eliminates $1.2 billion spent on 21st Century Community Learning Centers, which funds after-school and summer programs for 1.6 million kids around the country. The budget says the program “lacks strong evidence of meeting its objectives.” Both increases and cuts in spending in these areas could affect what families budget for education and child care.

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Will Trump’s Big Health Care Plan Give You Money Trouble?

Here's how to prepare your funds for a Trump presidency.

On Monday, President Donald Trump addressed a joint session of Congress (and the nation). In his speech, he shared his blueprint for the country’s future.

Many of his remarks centered on national security, jobs and taxes, but the item on many minds was health care.

Following a spate of town hall meetings in which angry constituents confronted their Republican representatives, Trump laid out his vision for replacing the Affordable Care Act (ACA, also called Obamacare).

Trump’s health care plan, if enacted by the Republican-controlled Congress, is likely to have an impact on your bottom line. Here’s how.

5 Health Care Principles in Donald Trump’s Speech

Trump’s speech to Congress included five principles he wants to see in the ACA’s replacement plan.

1. Keep Coverage for Pre-Existing Conditions

Trump insists that any replacement of the ACA should keep the coverage requirement for pre-existing conditions. If you’re staring down a medical condition, you should still be covered, assuming Trump gets his way.

2. Continue Tax Credits & Expand HSAs

Trump wants to continue offering tax credits to those who need help paying for health insurance (something that’s currently offered under the ACA). He also wants to expand the use of Health Savings Accounts (HSAs).

3. Offer States ‘Resources and Flexibility’ for Medicaid

One of the key points of the ACA was its Medicaid expansion. However, when the Supreme Court upheld the ACA in 2012, it ruled that states didn’t have to participate in Medicaid expansion. As a result, some states have “gap” populations, where tens of thousands aren’t covered by the ACA but still can’t get Medicaid.

Trump has promised “insurance for everybody,” and Medicaid expansion is probably a part of that. House Speaker Paul Ryan is a proponent of the use of block grants for Medicaid, and that could change the way Medicaid is administered in some states.

4. Pass Legal Reforms & Reduce the Price of Drugs

Trump’s health care plan champions legal reforms to protect patients and doctors from “unnecessary costs.” He hasn’t offered a lot of information about how to go about that, though.

A more interesting part of that principle is the idea of reducing drug prices. President Trump has been focused on the cost of prescription drugs since his campaign and insists that negotiation can bring down the cost of drugs. If this tactic is adopted, it could help many people on life-saving medications save money.

5. Create a National Insurance Marketplace

One of the sticking points many people have is that, for the most part, you can’t buy insurance across state lines. The ACA allows for multi-state exchanges, but they haven’t been used very much and success has been dubious.

Trump hopes a national marketplace will force insurers to compete more and offer additional choices for consumers, driving down the price.

What Trump’s Health Care Vision Means for Your Wallet

President Trump’s proposed health care policies would likely have an effect on your insurance costs. Here’s what to watch for.

Tax Credits for Coverage

The ACA currently offers tax credits for purchasing insurance through an exchange. Donald Trump’s speech to Congress last night indicates that tax credits for coverage will still be part of the plan.

But for millennials, that could actually mean paying more for coverage, thanks to a re-jiggering of how these tax credits would work.

A draft ACA replacement bill has been circulating, and presumably, the Trump Administration approves (Trump health secretary Tom Price is in favor). In this bill, tax credits are based on age instead of income.

If that policy is passed, older Americans would see more help under a new health care plan and younger Americans would see less. For some millennials getting subsidies under the ACA today, premium costs could go up due to a smaller tax benefit.

Expansion of HSAs

Details about the expansion of Health Savings Accounts haven’t been released, but their use is supported by both Trump and GOP members of Congress. This provision could be a good thing for younger Americans with few health care needs.

With an HSA, you receive a tax deduction for your contribution, and the money grows tax-free as long as you use it for qualified medical expenses. Under the ACA, you need a high-deductible plan to qualify. A high-deductible plan comes with a lower monthly premium, so users can save money each month that way.

If you don’t spend a lot on health care, the expansion of HSAs could be an advantage, depending on how the expansion is accomplished. If contribution limits are raised or the requirement for a high-deductible plan is eliminated, the HSA piece of “repeal and replace” could have a net benefit on your pocketbook.

National Health Insurance Exchange

The theory behind a national health insurance exchange is simple: Buying across state lines would give consumers more choices and cheaper coverage.

However, this might not actually work as intended. A study from Georgetown University looked at a six-state exchange under the ACA and found that it didn’t bring in new options, or even reduce costs.

On a national scale, though, the results might be different. If insurers are forced to compete by offering different plans, it’s possible that costs could decrease. However, state regulation will still be an issue, and no one has addressed how state-level regulation fits into a national health exchange.

Continuous Coverage

In his speech to Congress last night, Trump insisted that the government shouldn’t mandate coverage. But what’s the alternative?

According to the draft ACA replacement plan, Americans would need to have “continuous coverage” for a set period of time in order to take advantage of coverage for pre-existing conditions. In addition, those who don’t maintain continuous coverage would be subject to higher rates if they decide to re-enroll with an insurance plan.

If you don’t maintain coverage, you could see a significant uptick in your premiums as a result.

What Happens If You Receive Insurance Through Work?

One thing Trump didn’t address was the issue of what happens to those who receive insurance through work.

It isn’t clear how tax credits, Medicaid block grants and other items would be paid for, since the latest proposals are mum about the taxes the ACA imposes on those with higher incomes.

Ideas circulating among GOP members of Congress include a provision that caps the tax exclusion on coverage from employers. That means if your employer-sponsored health coverage exceeds the cap, you could pay higher tax costs.

The Bottom Line on Trump’s Health Care Plan

For now, it’s mostly speculation. Trump’s speech set forth principles for an ACA replacement, some of which protect the more popular aspects of Obama’s health plan.

Of course, it’s actually up to Congress to decide how to proceed. President Trump can outline his preferences, but that doesn’t mean Congress will follow his lead.

As with any policy, there will be winners and losers. Whether you end up paying more or less for insurance depends on what happens next in Congress.

Image: BasSlabbers 

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How Trump’s Immigration Policy Spurred a Deportation Scam

Here's how Donald Trump's policies could affect your money.

For those who thought President Trump’s stance on immigration was the gossamer of election year overpromising, it’s time to adjust that thinking. The administration last week unveiled plans to target all “removable” aliens. It is a staggering number of people: 11 million.

If I told you that Price Waterhouse blamed the envelope mix-up at the Oscars on a practical joke devised by Warren Beatty and provided a link to the story, would you click through? How about if I included a link to a picture of the actual card that made Oscar history?

Fake news is the scam artist’s stock in trade — whether we’re talking about the kind that our 45th president keeps talking about, or something that takes advantage of a trending story.

Scam artists work fast, often riffing off the daily news to build their improvised traps, but sometimes they rip their scams from the headlines and take them to the street. (You can monitor two of your free credit scores for signs of foul play every two weeks on Credit.com.)

That’s what happened last week in reaction to Trump’s immigration policy. Criminals were waiting in the wings to capitalize on it, which inspired thuggish stick-ups and made necessary a warning from the office of New York Attorney General Eric Schneiderman.

The alert was issued after raids were conducted nationwide by the U.S. Immigration and Customs Enforcement (ICE). According to reports, hundreds of undocumented immigrants were arrested. It was big news, giving rise to political indignation by opponents of the Trump doctrine and sparking fear among immigrant communities.

Almost immediately, the scams began. According to Schneiderman’s office, four men wearing ICE apparel stopped a man on a street off of Roosevelt Avenue in Queens. They demanded cash. When he refused, they told the man he would be arrested. In another incident that made the news, a man in the immigrant-filled Queens neighborhood was told to hand over $250 or be arrested.

It’s unclear whether the ICE apparel was legitimate or duplicated by the thieves.

ICE gear can be purchased online, but Sallycopshop.com, one purveyor of such apparel, said it requires proof of employment by the law force. (Two other online sites offering ICE gear declined to comment for this article or failed to respond before publication.)

“The customer must ship their work address and have an ICE government email address for items with badges or lettering on it,” a Sallycopshop.com spokesperson said in an email. “We do go through each order individually to validate the customer is a federal agent or officer.”

Although many images of the recent ICE raids feature real officers wearing jackets and body armor clearly marked “ICE,” an agency spokesman told me that ICE officers and agents work in street clothes.

“I’m going to guess there are special requirements for clothing that indicate an official law enforcement capacity,” agency spokesperson Khaalid Walls said.

Regardless of the methods, there are several scams immigrants worried about the specter of ICE arrests need to be on the lookout for. Here are the big three, along with some tips culled from Schneiderman’s recent warning.

1. Fake ICE Agents

The attorney general states that ICE agents will never ask for money or threaten detainment and do not have the authority to enter your resident without a court-issued warrant. If a purported ICE agent knocks on your door, be polite, but firm. The law’s the law. Ask to see badges, and if you still smell a rat, call 911.

2. Beware Phone Calls

Some criminals stay out of sight, preferring to make phone calls that amount to the same sort of “pay or don’t stay” shakedown. Anyone who has read my columns warning of IRS phone scams will recognize this modus operandi — and this next tip. Remember: Just because your caller ID says the caller is from the government doesn’t make it so. Phone numbers can be spoofed. Bottom line: Immigration will not ask for anything important over the phone — not your personally identifying information and not money. If “they” do, hang up.

3. Notario Scams

As Schneiderman’s office points out, notario can be a much bigger and better job in Latin America — with a lot more power — than “notary” connotes in the U.S. In Latin America, a notario is anyone who can perform legal services — including lawyers. Beware people who try to make bank on this linguistic misunderstanding. Whether the claim is to speed up an application or otherwise help you get legal status, be careful. Check credentials and ask for references. If you are met with hostility, say goodbye and find a reputable service.

There are more tips and information regarding common traps and shady practices that immigrants face on the Attorney General’s website, which directs New York residents to report potential fraud or other issues regarding immigration services to its Immigration Services Fraud Unit Hotline at (866) 390-2992 or via email at Civil.Rights@ag.NY.gov. Those outside New York can get in touch with the Federal Trade Commission and file a complaint in their state.

Here is the great irony: Trump’s push to arrest and deport “removable” immigrants has given rise to fake cops, sewing doubt about the immigration enforcement authorities in a way that echoes Trump’s constant refrain of “fake news,” which has dangerously destabilized the public’s trust in our media.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

Image: ginosphotos 

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Are Huge Budget Problems on the Way With Trump?

trump_and_your_wallet

Q. Is it wrong to think we should also expect huge budget problems and less aid to the states from decreased revenue? Given Trump’s penchant for borrowing and record of bankruptcies, “volatility in the markets” may be an understatement.
— Looking ahead

A. We’re still waiting to see the depth of the new president’s plans, and exactly what he’ll pursue in terms of policy.

President Trump’s inaugural address can be summed up in two words: “America First.”

He vowed that every decision on taxes, trade, immigration and foreign policy would be made with U.S. interests first, Altair Gobo, a certified financial planner with U.S. Financial Services in Fairfield, New Jersey, said.

“It will be interesting to see if his campaign rhetoric will mirror his actions as our 45th president,” Gobo said. “In other words, he has talked the talk, but will he be able to walk the walk?”

Gobo said most of the policies and plans Trump has spoken of have not yet been presented, and even the ideas presented could change drastically before they are finalized.

He said the United States is much larger and more complex than one or a few of Trump’s business entities, with more checks and balances preventing Trump from running the country as he would one of his businesses.

Also, Gobo said, even with the Senate, House and presidency held by a Republican majority, it doesn’t mean they’re all in agreement when creating policy.

“One major positive component is that Trump has worked with governments and businesses around the world so he may have rare, practical insights into international economics and trade above and beyond the typical politician,” Gobo said.

The Economic Pros & Cons of a Trump Presidency

Gobo offered a list of pros and cons.

The Pros

  • The Senate, House, and president should all agree on pro-business policies which can lead to growth in the economy and more jobs, Gobo said.
  • New infrastructure investments could be additional fuel for this growth.
  • Trump didn’t get to his current state by making uneducated decisions “and he certainly will not do anything to sabotage growth now,” Gobo said.
  • Wishes to open up state lines and promote competition among healthcare companies could lower costs for the average American, Gobo said.

The Cons

  • Gobo said there are concerns over immediately and fully enforcing immigration laws as Trump has said he will do. This could cost the federal government revenue, shrink the labor force, and possibly reduce the real GDP by $1.6 trillion, Gobo said, sourcing the American Action Forum, a right-leaning policy institute in Washington, D.C.
  • Trump’s healthcare idea may not garner the savings he intends, Gobo said, because policy in states may not translate to the same access to networks that local providers can contribute in-state.
  • Trump made many promises to the American people that may be a challenge to deliver, Gobo said.
  • And then there’s Twitter. “Combine Twitter with an impulsive personality and he has the ability to effect reputation or policy perception very quickly,” Gobo said.

Then there are taxes to consider.

Gobo said among the pros: Lowering taxes should create incentives to work and spend, many believe lower taxes are also a catalyst for growth, many believe the current tax policy is archaic and too complex, and lower corporate tax rates may bring corporate tax money back to the US.

But on the con side, Gobo said, what if growth does not occur after tax cuts are made? And the Trump plan, according to the Tax Police Center, would require spending cuts to avoid adding about $1.1 trillion to the federal debt by 2025, Gobo said.

Policy takes time to implement and the effects of new policies take time to present themselves, Gobo said.

“The true effects will be unknown for some time and we should not be eager to adjust strategies based on the multitude of `what if’ scenarios being presented at this time,” he said. “What we should do right now is follow the plans we have made for ourselves for the next 10, 20, or 30 years and not get caught up in the unproductive nature of short-term ideas that we can’t control.”

Your financial plan should allow enough flexibility to make any necessary adjustments based on any new tax or policy changes that may be enacted, Gobo said.

Editor’s note: Staying on top of the aspects of your finances that you can control can help you feel more certain in uncertain times. Managing your credit well is one of those things. You can get your two free credit scores, plus a snapshot of your credit report details, updated every 14 days, absolutely free on Credit.com.

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