By Alex Camardelle, Ph.D.
In April 2026, the White House released its fiscal year 2027 budget request, a document that doubles down on the fiscal trajectory set by the Working Families Tax Cut Act signed into law on July 4, 2025. While the budget’s authors frame it as a plan to “right our fiscal ship,” a close reading reveals something far more consequential: a systematic dismantling of the federal programs, agencies, and employment pathways that Black families and families of color have relied upon to build economic stability for generations. For advocates working to close the racial wealth divide, this budget proposal is a policy roadmap that, if enacted, would accelerate wealth extraction from the communities least positioned to absorb it.
The Starting Line Is Already Unequal
Any honest assessment of this budget must begin with the baseline reality it ignores. White households hold over 83 percent of total national wealth in the United States, despite representing 68 percent of the population. Black and Hispanic households each hold a fraction of that share. These disparities are the compounding result of decades of policy choices around housing, education, employment, and the social safety net.
The FY2027 budget does not acknowledge this context. It does not contain a single analysis of how its proposals would affect communities across racial or economic lines. Instead, it treats equity-focused programming as inherently wasteful, systematically targeting for elimination the very agencies and initiatives designed to address structural disparities.
Gutting the Safety Net: Medicaid and SNAP
The budget builds on the Working Families Tax Cut Act (also known as the “One Big Beautiful Bill”), which slashed an estimated $1 trillion from Medicaid and hundreds of billions from SNAP over the next decade. Beginning in 2027, Medicaid expansion beneficiaries face new work requirements mandating at least 20 hours per week of work, school, or community engagement. Congressional Budget Office estimates project that millions of people stand to lose health coverage, while millions more could lose some or all of their food assistance as a result of new eligibility restrictions.
These cuts land hardest on communities of color. Workers of color are overrepresented among low-income households due to structural inequities in wages and employment access. In 2023, more than one in five Black households (23.3%) and Hispanic households (21.9%) experienced food insecurity, more than double the rate of white households (9.9%). Approximately 25 percent of Black Americans receive SNAP benefits, and about 46 percent of all SNAP recipients are people of color. Each dollar cut from these programs is a dollar that would have otherwise freed family resources for savings, education, or the down payment on a first home.
The budget also proposes eliminating the $4 billion Low Income Home Energy Assistance Program (LIHEAP) and the $775 million Community Services Block Grant, both of which disproportionately serve Black and Latino households. These are not abstractions. They are the programs that keep the heat on in winter and connect families to job training and financial literacy services.
Dismantling Pathways to Black Middle-Class Stability
Federal employment has long served as one of the most reliable engines of Black economic mobility in America. Black workers represent 18.7 percent of the federal workforce, significantly above their 13 percent share of the general population. In states across the South, the numbers are even more striking: Black workers make up 43.8 percent of federal employees in Georgia, 37.6 percent in Louisiana, and 34.8 percent in Mississippi.
Housing: Pulling the Ladder Up
Housing is the primary vehicle through which American families build wealth, and the homeownership divide remains one of the starkest markers of racial inequality. Roughly 74 percent of white households own their homes compared to about 45 percent of Black households. Rather than addressing this divide, the FY2027 budget proposes to widen it.
The budget cuts HUD by 13 percent, a $10.7 billion reduction, and proposes eliminating some of the department’s most consequential programs. The Community Development Block Grant, a $3.3 billion program that has funded affordable housing and community infrastructure in underserved neighborhoods for decades, is proposed for elimination. The HOME Investment Partnerships Program, which provides $1.3 billion for affordable housing construction and rehabilitation, is slated for termination. The budget also eliminates Pathways to Removing Obstacles (PRO) Housing grants, the Housing Opportunities for Persons with AIDS program, and Native American housing programs.
The budget frames these cuts as eliminating “woke” spending. But what it labels ideological are programs that cities have used to address displacement in gentrifying neighborhoods, invest in energy-efficient affordable housing, and connect historically marginalized communities with stable shelter. The elimination of CDBG alone would remove a critical funding stream for economic development in majority-Black and majority-Latino census tracts nationwide.
Targeting Equity Infrastructure by Name
Perhaps the most revealing feature of this budget is what it eliminates by name. The Minority Business Development Agency, the only federal agency dedicated to the growth of minority-owned businesses, is proposed for termination with a $47 million cut. The National Institute on Minority Health and Health Disparities at NIH is slated for elimination. Minority-Serving Institution programs at the Department of Education face a $354 million cut. The Digital Equity program, a $2.2 billion initiative to close the digital divide in communities of color, has been cancelled.
The budget does not merely cut equity programs. It characterizes their core missions as unconstitutional, discriminatory, or fraudulent. This framing matters because it does not just defund current initiatives; it delegitimizes the very premise that the federal government has a role in addressing racial economic disparities. It sends a clear signal that future administrations would need to rebuild not just funding levels but the legal and political justification for equity-oriented policy itself.
Who Benefits? Follow the Money
While these cuts strip resources from low-income families and communities of color, the budget’s fiscal posture reflects the tax architecture of the Working Families Tax Cut Act, which delivered an estimated $1 trillion in tax reductions overwhelmingly benefiting the wealthiest one percent of households and corporations. The contrast is stark: a budget that finds hundreds of billions in savings by cutting food assistance for hungry families while extending tax provisions that primarily benefit households with seven-figure incomes.
The racial dimension of this tradeoff is impossible to ignore. Nine out of ten households with wealth above the estate tax threshold are white. The families gaining the most from the WFTCA’s tax provisions are overwhelmingly white and already wealthy. The families losing the most from its spending cuts are disproportionately Black, Latino, and Indigenous. This is not a budget that asks everyone to sacrifice equally. It is a transfer of resources from those who have the least to those who have the most, superimposed on an already vast racial wealth divide.
A Call to Action for Advocates
For policy advocates, the FY2027 budget is a clarifying document. It makes explicit what the past year of executive action has implied: that this administration views racial equity programming not as a policy priority but as a policy problem to be solved through elimination.
The response must be equally clear. Advocates should push Congress to reject the proposed eliminations of CDBG, HOME, MBDA, and LIHEAP. State-level coalitions should prepare contingency plans for the millions who will lose Medicaid and SNAP coverage under the new work requirements. Legal organizations should challenge the constitutional arguments being used to dismantle Minority-Serving Institution funding. And every organization working on the racial wealth divide should be communicating to the public, in concrete terms, what these budget numbers mean for real families.
The racial wealth divide did not emerge by accident, and it will not close through indifference. If this budget moves forward as written, the distance between Black and white wealth in America will not merely persist. It will grow.
The only thing of note that I would reconsider through the text is contained here – the notion that this administration should utilize a racialized context when building out their policy agenda.
