A recent study by the Commonwealth Fund examines the potential economic repercussions of proposed federal cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP). The analysis projects that such cuts could lead to over 1 million job losses nationwide and a $113 billion reduction in state GDPs by 2026.

Why IMPLAN Was the Right Tool for the Job

To assess these impacts, the researchers employed IMPLAN. IMPLAN was the ideal choice for this study because of its ability to:

• Capture Ripple Effects: IMPLAN models the direct, indirect, and induced economic effects of policy changes, providing a full picture of how reduced federal funding in one sector influences other industries.
• Provide Granular State-Level Data: With IMPLAN, the researchers could estimate state-by-state job losses, GDP reductions, and tax revenue declines, making their findings actionable for policymakers.
• Quantify Real-World Outcomes: By leveraging IMPLAN’s comprehensive economic datasets, the study was able to translate budgetary changes into tangible impacts on employment, business revenue, and state tax collections.

IMPLAN’s robust methodology ensured that the study’s findings weren’t just theoretical – they were grounded in real economic relationships and industry linkages.

Key Findings from the Study

• Job Losses: The proposed cuts could result in approximately 1.03 million job losses nationwide, with significant impacts in health care and food-related industries. For instance, Texas might lose over 67,000 jobs, while Pennsylvania could see nearly 49,000 jobs eliminated.
• Economic Output: States could experience substantial declines in economic activity. Texas faces a potential $7 billion reduction, and Pennsylvania’s GDP could shrink by $5.3 billion due to the proposed cuts.
• Tax Revenue: The anticipated decrease in economic activity could lead to nearly $9 billion in lost state and local tax revenues by 2026, further straining state budgets.

What This Means for Policymakers and Researchers

These findings underscore the critical role that federal funding for Medicaid and SNAP plays not only in supporting vulnerable populations but also in sustaining state economies. The study highlights how cuts to these programs could have far-reaching consequences beyond the immediate loss of benefits to individuals.

For a comprehensive understanding of the study’s methodology and detailed state-by-state projections, we encourage readers to explore the full report on the Commonwealth Fund’s website.

For more information about how IMPLAN can help you and your organization explore critical issues like these, schedule a demo today!