A new analysis reveals California could face devastating economic consequences from Republican-proposed federal budget cuts, with projected losses of $17 billion to the state's economy and approximately 140,000 jobs in 2026.
The study, conducted by the Commonwealth Fund and George Washington University's Milken Institute School of Public Health, examined the potential impacts of $1.1 trillion in cuts to Medicaid and SNAP (Supplemental Nutrition Assistance Program) over the next decade.
For California specifically, the cuts would slash $10.9 billion from Medicaid and $2.9 billion from SNAP funding in 2026. The ripple effects would stretch beyond direct program beneficiaries, impacting hospitals, medical offices, grocery stores, and related supply chains.
"California already has serious budget problems this year, and this is in addition to those problems," noted Leighton Ku, the report's lead author and director of the Center for Health Policy Research at George Washington School of Public Health.
The state faces limited options to address these potential shortfalls. While California has some flexibility in implementing Medicaid changes, SNAP reductions would take effect almost immediately. Given California's existing $46.8 billion budget deficit, finding state funds to offset federal cuts appears unlikely.
Job losses would affect multiple sectors, including:
- Healthcare (nursing, pharmacy)
- Agriculture
- Food processing
- Manufacturing
- Retail
The proposed cuts would also result in $1.4 billion in lost state and local tax revenues as reduced spending ripples through the economy.
House Speaker Emerita Nancy Pelosi criticized the Republican proposal, stating it would "protect billionaires while ripping away health care from millions of hardworking Americans." The House Speaker's office did not respond to requests for comment.
The report aims to inform ongoing budget negotiations in Congress, where tough discussions lie ahead regarding the future of these critical programs that currently serve over 72 million Americans through Medicaid and 42 million through SNAP.