Thanks to all members and speakers who joined us for Workforce Matters’ 2026 budget briefing and discussion on March 31. A special thanks to Economic Opportunity Funders for their always-excellent Annual Budget and Tax Briefing, which provided the foundation for our conversation, and to our speakers, Megan Evans and Melissa Johnson from the National Skills Coalition, Caitlyn Pecoraro of the Conrad N. Hilton Foundation, and Janie McDermott of the Annie E. Casey Foundation.
During our call, Workforce Matters provided a brief recap of this year’s EOF Budget and Tax Briefing, including both federal and state sessions, to provide an update on the current policy and budget landscape and what comes next.
Over the last year, with the implementation of HR 1 (the budget bill), we have seen sustained pressure on the non-defense discretionary spending that funds workforce and safety net programs. HR 1 proposed deep cuts to health coverage and food assistance. There has been a reduction of nearly 270,000 federal employees through January 2026, hollowing out the technical assistance capacity that states and local boards rely on. And unsubstantiated fraud claims have been weaponized to justify cuts and erode public confidence in programs that work.
For workforce development, the SNAP and Medicaid cuts are not abstractions—they eliminate the basic needs supports that make it possible for people to participate in training programs in the first place.
And yet, the speakers provided evidence that advocacy has produced real results over the last year. The most damaging Medicaid structural changes were blocked. Non-defense appropriations came in above what the Administration proposed. Recissions, grant terminations, and impoundments of federal funding have all faced limits from the courts. And public support for SNAP, Medicaid, and housing assistance has held steady near 75–80% favorable—despite sustained fraud messaging. A defensive win is still a win.
What’s at Stake Through 2027
Going forward, several policy vehicles carry significant risk for workforce funding. A second reconciliation bill is under discussion; proposed cuts justified by fraud and waste claims are likely to follow. FY2027 appropriations likely won’t resolve until after the midterms, and flat funding—given rising costs—is effectively a cut to program capacity. The President’s recently released budget proposes to cut more than $1.2 billion from current funding levels.
The SNAP cost-shift from federal to state remains one of the most serious near-term threats to both state budgets and program availability. A looming $17 billion Pell Grant shortfall in FY 2027 could force Congress to cut eligibility or reduce award amounts, directly affecting community college students, student parents, and adult learners. And WIOA Reauthorization, moving on a partisan track in the House, presents both the greatest opportunity to modernize the workforce system and the greatest risk of locking in harmful structural changes.
States are absorbing these pressures in real time. Colorado is defending an emergency employment support program. Illinois advocates are fighting to protect job training grants. Georgia is making the case for additional caseworkers to reduce SNAP error rates before a federal cost-shift hits. In this climate, holding the line is meaningful work.
AI as a Political Opening
As in other spaces, the impact of AI is a wildcard. AI is accelerating labor market disruption at precisely the moment when supports for displaced workers are being weakened. But AI is also generating genuine bipartisan attention in ways that traditional workforce arguments have not. This interest may help create a new entry point—connecting AI investment, workforce training, and basic needs supports in terms lawmakers across the aisle are receptive to. If no worker is immune to displacement from AI, the safety net becomes infrastructure everyone has a stake in.
The Work Ahead
Building from the approach laid out at last year’s EOF briefing, speakers laid out a four-part strategy for the work ahead:
- Block and delay harm,
- Document impacts,
- Seize opportunities where they exist, and
- Lay the groundwork for the future.
Workforce funders, advocates, and coalitions should strategically align their work with efforts focused on food, housing, and healthcare. And continuing to strengthen the evidentiary case for workforce program effectiveness now is far better than responding to a crisis.
The current moment calls for realism about what’s achievable and clarity about what’s at stake. Defending existing funding, delaying harmful changes, and maintaining public support are the foundation on which future investment will be built.
Resources
Recaps from EOF’s 2026 Budget and Tax Briefing:
- Reimagining Revenue Systems Ideas Showcase Recap
- Reimagining Public Benefits Access Ideas Showcase Recap
- Safeguarding Medicaid and SNAP Recap
- Federal Budget and Tax Outlook Recap
- State Budget and Tax Outlook Recap
Big Insights from Small and Mid-Sized Businesses | National Skills Coalition
The Cost of Work Requirements Fact Sheets | National Skills Coalition
Make America Skilled Again? Not with these Cuts | National Skills Coalition
