Changes to Spending
For SNAP and Medicaid, we use self-reported program receipt in the 2024 Current Population Survey Annual Social and Economic Supplement (ASEC) as the basis for our estimates. While the value of SNAP benefits received is reported in the ASEC, Medicaid spending is not; as such, we impute Medicaid spending for each individual in the ASEC reporting Medicaid receipt using CBO’s baseline projections of average Federal spending on benefit payments per enrollee.
After individuals’ SNAP and Medicaid benefits are computed, we group individuals within each household into tax units using the Census Bureau’s imputed tax-unit ID and sort them by Adjusted Gross Income (AGI) as imputed by Census.
We adjust reported SNAP and Medicaid benefit receipt to account for the well-known phenomenon of underreporting of in-kind benefits by households in the ASEC. To do so, we scale up each income group’s aggregate benefits received so that total benefits match CBO’s baseline projections. (This is equivalent to assuming that individuals who receive benefits but do not report them in the ASEC have the same distribution of income as individuals who receive benefits and do report them.)
Compared to previous versions of analysis of changes to SNAP and to Medicaid, the analysis in this report reflects two recent changes to The Budget Lab’s distributional methodology, both of which match those of the Congressional Budget Office (CBO) in its recent analysis of the distributional impact of the House version of the bill:
- In line with multiple economic studies, we assume that a little over half (56 percent) of changes to Medicaid ultimately fall on providers, with the remainder falling on enrollees.
- We assume that states will replace, on net, approximately 1 percent of household resource losses due to cuts to Federal spending on Medicaid and SNAP over the 2026-2034 window.
The scripts used to compute the estimates in this analysis can be found here.
Changes to Taxes
The effects of tax changes are estimated using The Budget Lab’s standard distribution analysis methodology with the exception that the income metric for ranking tax units is AGI, not a broader measure of income, due to data constraints in the ASEC.
Our analysis includes the following provisions: ordinary tax rates, the standard deduction, itemized deductions (including PTET SALT policy), personal exemptions, the QBI deduction, the CTC, the CDCTC, the AMT, no tax on tips/overtime/car loan interest, the senior deduction, the estate tax, bonus depreciation, and R&D expensing.
The script used to generate the figures in this analysis can be found here. For more information on our tax model, please refer to these two documentation pages:
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