Beyond the Boom: What Trump’s Return Means for America’s Poor

Predicting the exact trajectory of poverty in America under any specific administration is complex, as it depends on a multitude of factors beyond presidential policies, including global economic conditions, technological advancements, and unforeseen events. However, we can analyze past trends from his previous term and evaluate the potential impacts of proposed policies for his current presidency.

Poverty Trends During Donald Trump’s First Term (2017-2021):

During the first three years of his prior term (pre-COVID-19 pandemic), the U.S. saw a continuation of a declining poverty rate, reaching its lowest level since 1959 by 2019. The official poverty measure (OPM) fell from 12.7% in 2016 to 10.5% in 2019. The Supplemental Poverty Measure (SPM), which accounts for government programs and taxes, also saw declines. This period was characterized by sustained economic growth, a low unemployment rate (reaching a 50-year low), and rising median household incomes. Wage growth, particularly for those at the lower end of the income spectrum, also saw an acceleration.

However, the onset of the COVID-19 pandemic in 2020 significantly disrupted these trends.¹ While massive government relief aid (like the CARES Act) helped prevent a sharp rise in poverty as measured by the SPM, the official poverty rate did tick up slightly in his final year due to widespread economic shutdowns and job losses.² By the end of his term, the U.S. had 3 million fewer jobs than when he took office, a consequence largely attributed to the pandemic’s economic impact.

Key Policies and Their Potential Impact on Poverty (Current Term):

The current administration’s proposed policies, particularly as seen in the recently passed “One Big Beautiful Bill,” focus heavily on tax cuts, deregulation, and specific spending priorities, which could have varied effects on poverty:

1. Tax Policy (One Big Beautiful Bill):
   • Extension of 2017 Tax Cuts: This bill makes permanent many provisions of the 2017 Tax Cuts and Jobs Act (TCJA).³ Analysis by organizations like the Congressional Budget Office (CBO) and Penn Wharton Model suggests that while the wealthy and top earners would see significant benefits, lower-income and middle-class Americans may receive little to no benefit, and some analyses even project a net decrease in after-tax income for the poorest due to safety net cutbacks.
   • New Deductions: The bill includes new deductions for tips, overtime, and auto loan interest, along with an enhanced deduction for seniors.⁴ Proponents argue these measures will increase take-home pay for working and middle-class families. However, some analyses suggest that certain deductions, like the one for seniors, may primarily benefit higher-income individuals among seniors, as many low-income seniors already pay no federal income tax.⁵
   • Child Tax Credit: The bill bolsters and makes permanent the child tax credit, increasing it to $2,200, which could provide relief for many families.⁶
2. Social Safety Net Programs:
   • Cuts to Medicaid and SNAP: A significant concern raised by critics is the proposed nearly $1 trillion in cuts to Medicaid and billions from the Supplemental Nutrition Assistance Program (SNAP, or food stamps).⁷ Experts warn that these cuts could lead to millions losing access to healthcare and food assistance, directly increasing poverty and hardship for vulnerable populations.
   • Work Requirements: The administration has historically favored mandatory work requirements for social welfare programs, which could reduce access to benefits for those unable to meet the requirements, potentially pushing more people into poverty.⁸
3. Trade Policies (Tariffs):
   • Increased Tariffs: The current administration has recently imposed new tariffs, including a 25% tax on goods from Japan and South Korea, and new import taxes on a dozen other nations.⁹ While intended to address trade imbalances and promote domestic production, tariffs typically lead to higher prices for consumers on imported goods, which can act as a regressive tax, disproportionately affecting lower-income households who spend a larger percentage of their income on necessities.¹⁰ Officials suggest these revenues could offset tax cuts, effectively shifting a greater share of the federal tax burden onto the middle class and poor.
4. Immigration Policies:
   • Mass Deportations and Fees: Plans for large-scale deportations and new fees for immigrants (including asylum seekers) could significantly impact immigrant communities, many of whom are low-income, potentially pushing families into deeper poverty or increasing the number of undocumented individuals without access to social services.¹¹

Expert Outlooks:

Economists and policy analysts offer varied forecasts, but several common themes emerge:

• Increased Inequality: Many analyses suggest that the current economic policies, particularly the tax cuts, are likely to exacerbate income inequality, disproportionately benefiting the wealthy while potentially leaving lower-income individuals worse off due to cuts in safety net programs.
• Fiscal Concerns: The proposed tax cuts are projected to add trillions to the federal deficit, which could lead to future pressures to cut spending further, potentially impacting programs that serve low-income Americans.¹²
• Inflationary Pressures: Tariffs can contribute to inflation by raising the cost of imported goods, which can erode the purchasing power of wages, particularly for those on fixed or lower incomes.¹³
• Uncertainty: Global economic conditions, geopolitical stability, and the actual implementation and long-term effects of policies will all play a role.

In summary, while the first Trump administration saw a decline in poverty rates pre-pandemic amidst a strong economy, the current policy proposals, particularly significant cuts to social safety nets and new tariffs, raise concerns among many experts about a potential increase in poverty, especially for the most vulnerable populations, and a widening of income inequality. The actual impact will depend on the interplay of these policies with broader economic dynamics.