Cutting Health to Fund War: What Trump’s New Budget Means for You

As House Republicans scramble to fund a sweeping legislative package designed to advance former President Donald Trump’s political agenda—including massive increases in military spending—they’re once again turning to one of their most familiar targets: Medicaid.

In a closed-door meeting Monday night, Republican lawmakers floated a new proposal that would impose “per capita caps” on federal Medicaid contributions in states that expanded the program under the Affordable Care Act. This move would drastically alter how Medicaid is funded, effectively shifting the burden of rising health care costs to state governments—and threatening coverage for millions of low-income Americans.

The plan, currently under review by the House Energy and Commerce Committee, is one of several being considered to offset the costs of Trump’s so-called “big, beautiful bill,” which includes over $150 billion in Pentagon funding, $25 billion for an unproven missile defense initiative called the Golden Dome, and $5 billion for militarizing the U.S.-Mexico border.

🩺 A Dangerous Trade-Off

Let’s be clear: this is not a neutral budget decision—it’s a political choice. A choice to fund weapons over wellness, to prioritize defense contractors over disabled children, and to fortify borders while gutting the social safety net.

The Republican plan would allow federal funding to be capped per Medicaid enrollee. States that experience rising enrollment due to economic downturns, public health crises, or population growth would be forced to cover the gap on their own—or make cuts to services.

Even more concerning is the idea of a “rainy day fund,” which encourages states to bank “savings” from these caps—potentially incentivizing them to offer fewer services or deny care to stay under budget. The federal government may even be allowed to claw back a portion of those funds.

If implemented, this would mark one of the most significant rollbacks of Medicaid in its 60-year history. And it’s being proposed not to reduce debt or improve efficiency, but to pay for one of the largest defense spending increases in decades.

🧮 The Cost of the “Megabill”

Here’s what the current Trump-backed package includes:

• $150 billion in Pentagon spending, including billions for shipbuilding and nuclear modernization
• $25 billion for a speculative missile defense program with no clear implementation plan (Golden Dome)
• $5 billion to militarize the border, including detaining migrants on military bases and using military aircraft for deportations
• An expected $1.5 trillion in spending cuts to “offset” tax breaks and defense hikes

The message is unmistakable: people must sacrifice their health, housing, and livelihoods to fund a national security strategy rooted in militarization and fear.

🕊️ Peace Is Public Investment

At Peace Economy Project, we reject the idea that safety comes from missiles and militarized borders. Real security comes from:

• Access to affordable health care
• Investment in education, housing, and climate resilience
• A commitment to equity and economic justice

Gutting Medicaid to fund war profiteers is not just fiscally irresponsible—it’s morally indefensible.

📢 Take Action

We urge our supporters and coalition partners to contact your members of Congress and demand they reject any legislation that trades health care for military buildup. Budget justice means centering people, not weapons.

Let’s build a peace economy—where we don’t have to choose between security and dignity.