Trump to propose big cuts to safety net in new budget this week

US President Donald Trump in Riyadh, Saudi Arabia. Photo / AP

US President Donald Trump's first major budget proposal on Wednesday will include massive cuts to Medicaid and call for changes to anti-poverty programmes.

The changes would give states new power to limit a range of benefits, people familiar with the planning said, despite growing unease in Congress about cutting the safety net.

For Medicaid, the state-federal programme that provides healthcare to low-income Americans, Trump's budget plan would follow through on a bill passed by House Republicans to cut more than US$800 billion over 10 years. The Congressional Budget Office has estimated that this could cut off Medicaid benefits for about 10 million people over the next decade.

The White House also will call for giving states more flexibility to impose work requirements for people in different kinds of anti-poverty programmes, people familiar with the budget plan said, potentially leading to a flood of changes in states led by conservative governors.

Many anti-poverty programmes have elements that are run by both the states and federal government, and a federal order allowing states to stiffen work requirements "for able-bodied Americans" could have a broad impact in terms of limiting who can access anti-poverty payments - and for how long.

Numerous social-welfare programmes grew after the financial crisis, leading to complaints from many Republicans that more should be done to shift people out of these programmes and back into the workforce. Shortly after he was sworn in, Trump said, "We want to get our people off welfare and back to work. ... It's out of control."

Trump's decision to include the Medicaid cuts is significant because it shows he is rejecting calls from a number of Senate Republicans not to reverse the expansion of Medicaid that President Barack Obama achieved as part of the Affordable Care Act.

The House has voted to cut the Medicaid funding, but Senate Republicans have signalled they are likely to start from scratch.

The proposed changes will be a central feature of Trump's first comprehensive budget plan, which will be the most detailed look at how he aims to change government spending and taxes over his presidency.

Although Trump and his aides have discussed their vision in broad brushes, this will be the first time they attempt to put specific numbers on many aspects of those plans, shedding light on which proposals they see making the biggest difference in reshaping government. Congress must approve most changes in the plan before it is enacted into law.