Original Analysis: Cuts Contained Between the Lines of Reconciliation
Original Analysis: Cuts Contained Between the Lines of Reconciliation
In budget reconciliation, a new development worth monitoring has emerged. An arcane budget rule could create major cuts to programs including the:
Social Services Block Grant (SSBG);
Maternal, Infant, and Early Childhood Home Visiting (MIECHV) Program; and
Title IV-B Promoting Safe and Stable Families Program.
What’s Happening: If budget reconciliation didn’t feel complicated enough, it’s time to talk about the Statutory Pay-As-You-Go-Act of 2010 (S-PAYGO, P.L. 111-139).
S-PAYGO is a product of its 2010 environment; much like Adele’s hit single, Congress was Rolling in the Deep deficits that came out of the Great Recession response.
Congress is best at doing things it forces itself to do (like debt limits and spending cliffs), and S-PAYGO brings that to deficit reduction.
What S-PAYGO Does: The thinking is simple; surely Congress won’t leave new spending or tax cuts unbalanced if the price of doing so is automatic painful cuts?
Instead, much like the debt limit this convoluted measure is usually more of a bargaining chip in negotiations. Usually Congress simply votes to waive it later on.2
S-PAYGO Now: The twist is that CBO estimates this reconciliation bill would add so much to the deficit that these are not your typical across-the-board percentage cuts.
On May 20th, the nonpartisan Congressional Budget Office (CBO) sent a letter to U.S. House Budget Committee Ranking Member Brendan Boyle (D-PA) regarding the S-PAYGO interaction.
The letter confirms that if enacted, the reconciliation bill’s addition of over $2T to the deficit would trigger across-the-board budget sequestration cuts.
These would hit an array of mandatory programs,3 which are those whose funding continues without needing new approval from Congress each year.
What’s New: Beyond a required reduction in Medicare spending, CBO says S-PAYGO would require eliminating all funding for every other program subject to sequestration. For 10 years.
“After accounting for the reduction in Medicare spending, the required reduction in spending for other programs would exceed the estimated amount of resources available to those programs in each year over the 2027–2034 period. If OMB sequestered all of the funding for those programs, the total amounts would be less than the reductions required by S-PAYGO.”
The Cuts at a Glance
$1.7B/year Social Services Block Grant (SSBG)
You can see more here on SSBG’s major role in child welfare.
It was on the reconciliation chopping block but then seemingly spared.
Now it’s back in the mix.
Over $600M and Rising/Year: Maternal, Infant, and Early Childhood Home Visiting (MIECHV) Program
In many ways the gold standard of bipartisan evidence-based child and family policy.
MIECHV was just reauthorized in 2022 by massive bipartisan margins.
$289M/Year for States in Title IV-B Promoting Safe and Stable Families Program.
If S-PAYO hit, it wouldn’t just erase those gains, but the entire mandatory funding distribution in Promoting Safe and Stable Families.
So Are These Cuts Guaranteed? Definitely not.
Practically every time Congress faces automatic cuts, they waive the requirement in later legislation. That includes the expiring 2017 tax cuts this bill extends.
Why this Warrants Attention: 2025 is not a year that has followed any typical playbook when it comes to political incentives or policy processes.
The razor-thin vote margins needed to advance legislation make nothing a guarantee.
In addition, the backdrop of tensions over unilateral executive spending and staffing cuts make this more complicated; automatic cuts sound different with DOGE.
Analysis: Projected FY2026 Sequestration Cuts to SSBG, MIECHV, and Title IV-B
At Child Welfare Wonk, we don’t traffic in vibes and vagaries. We know you need clarity about what these cuts would mean for programs you care about.
So we built you a projection that shows the state-by-state cuts just from SSBG, MIECHV, and Title IV-B, which range from ~$6M to ~$250M.
Projected Sequestration Cuts By State without S-PAYGO Waiver
Data from ACF, CRS, & HRSA. Projection analysis and visualization by Child Welfare Wonk.
10 Biggest State Sequestration Cuts in FY2026: SSBG, MIECHV, and Title IV-B
To further drill down on the possible impact, this chart shows the 10 states that would see the biggest cuts under this scenario.
It’s a mix of both large states and those that have been recent electoral battlegrounds.
The tension will remain while these cuts persist as possible. We’ll be watching for what comes next.