Federal spending cuts flip the pyramid, costing low-income Americans the most

We all understand the concept of inversion, which basically means the act of turning something upside down. What we may not have realized this is the monetary policy of our modern Republican administration.

Picture a traditional pyramid, with the wider base on the bottom and the point on top. In the United States, you have massive wealth among a few, the point; and precious few financial resources among the body politic, the base. If you turn that pyramid upside down, you can put those with little or few financial resources on the top and the wealthy on the bottom.

The upside-down concept works best when we consider funding the annual federal budget deficit. In this case, the lesser earners are at the top of the pyramid and are expected to fund the government reduction efforts. Those with great wealth will not have to share beyond what they now contribute toward funding government spending. Our friends of riches are at the bottom of the repayment pyramid plan.

From this perspective, the GOP administration’s solution appears straightforward: It dramatically reduces society’s safety net. Here’s what some of these reductions in federal spending means for the average Iowan.

About 21,000 Iowans no longer have health coverage under the Affordable Care Act compared to last year. The failure to maintain the supplemental premium payment had that impact. Why this is important, among other reasons, is without payment, hospitals don’t stay open.  Right now, the Center for Health Care Quality and Payment Reform projects that of Iowa’s 94 operating hospitals, 20 face a loss of services and eight are in danger of shutting down.

Overall, FAMLIES USA estimates the loss of federal funding on health care will lead to 9,000 total job loss and 1.5 billion dollars in reduced economic outputs in Iowa alone. One of the biggest changes is the work requirement to receive Medicaid coverage. Any person to be eligible for coverage must work, volunteer or pursue education for 20 hours per week or 80 hours per month if under the age of 65.  The actual federal dollar loss in Iowa next year is estimated to be $904 million.

Clean Energy tax credits are gone. This was the program that gave tax credits to make homes more energy efficient. The National Energy Assistance Directors Association estimates a 10.5% increase in electricity costs nationally between June and September 2026, compared to the same period last year, CBS News reports. The real hit was the withdrawal of support from the federal government that Iowa was achieving wind energy.

Student loan repayments will increase the amount due, The Small Business Administration will increase the standard loan fixed rate. Interest rate deductions on home improvement loans have been eliminated.

One of the biggest blows, though, is in the SNAP (food stamp) program. According to the Congressional Budget Office, funding reduction will reach $211 billion by 2035. It is expected that up to 300,000 nationwide will lose coverage in an average month. Some states have already been hit hard. Estimates in Arizona indicate that already 450,000 people have lost access to food stamps, including 190,000 children.

John Maynard Keyes held that when times are tough, governments should fight by increasing spending. President Donald Trump wants the Federal Reserve to lower interest rates, which could raise inflation. Upper income people can withstand that, but Americans working on a flat hourly rate or annual salary cannot adjust. If the president has turned the economic model upside down, he has Keyes’ doctrine doing back flips.

Fortunately, there is at least one Iowa political leader who understands the coming economic vortex.  I interviewed state Rep. Brian Meyer, D-Des Moines, the House minority leader. “We know what is coming and we are going to have to fight, hopefully with the new governor and the Republicans in the House and Senate to protect average income-earning Iowans. Not the ones who own the apartments, but the renters who live there,” he said.

He added, “If we have to fight alone, remember, it is not the size of the dog in the fight, but the fight in the dog. We Democrats have a lot of dogs.”

As for me, if these economic circumstances descend upon us, it would be a great time to get back to bipartisanship.