Proposed Federal Budget Cuts Could Have Major Impacts on Our Community

April 2026

Released on April 3, the Fiscal Year 2027 federal budget proposal outlines significant reductions to non-defense spending, including programs that support housing, education, and human services. While this is an early-stage proposal and must still be approved by Congress, the direction is clear: many essential community programs are at risk.

The proposed budget includes:

• $1.5 trillion in defense spending
• A 10% ($73 billion) cut to non-defense programs

This shift places increasing financial responsibility on state and local governments, including Illinois, that do not have the capacity to fully replace lost federal funding.

Public programs are funded by both the U.S. federal government and the State of Illinois. These investments support essential services that help individuals and families meet their basic needs and build long-term stability.

Public funding helps support programs such as:

• Childcare assistance
• Food assistance (SNAP, WIC)
• Health insurance (Medicaid and Medicare)
• Energy assistance (LIHEAP)
• Job training and workforce development programs
• Education programs, including Head Start, ESL, and after-school initiatives
• Senior and immigrant support services

Many of these programs are jointly funded by federal and state governments, meaning they rely on shared resources to operate effectively. Examples include SNAP, Medicaid, LIHEAP, and childcare assistance.

Many of CASL’s programs depend on both state and federal funding. If the federal government reduces funding, the state government often does not have enough money to replace it. This can lead to:

• Fewer services
• Reduced benefits
• Stricter eligibility

Understanding how state and federal funding are related helps you know where changes are coming from, why services may change, and how to stay informed.

For the FY2027 federal budget, here is what you need to know.

Several programs that support CASL clients rely on are proposed to be reduced or eliminated entirely:

• LIHEAP (energy assistance) – eliminated
  • CASL currently serves ~4,000 clients through this program
• English Language Acquisition (ESL and bilingual education) – eliminated
• 21st Century Community Learning Centers (afterschool programs) likely eliminated
• Workforce development including:
  • The Office of Career, Technical and Adult Education
  • The Workforce Innovation Opportunity Act Program
• Community Development Block Grant (CDBG) eliminated
• Community Services Block Grant (CSBG) eliminated

In addition, several critical programs are not explicitly protected and remain at risk, including:

• Medicaid and Medicare
• Child care assistance
• Housing support programs

This proposal is not final. Congress must still:

• Review the budget
• Negotiate funding levels
• Approve a final version

As seen in previous years, proposed cuts — including programs like LIHEAP — can be challenged and restored through advocacy.

CASL continues to work with policymakers at all levels to:

• Expand access to early childhood education and workforce programs
• Support immigrant families through legal, language, and community services
• Ensure data transparency so AANHPI communities are accurately represented
• Invest in long-term solutions like CASL’s new community hub

Our advocacy agenda is rooted in one goal: ensuring every community member can thrive, not just survive.

Contact your elected officials and advocate for the programs that matter most to you at CASL’s Advocacy Day in Springfield on April 15, where our community will meet with elected officials at the Illinois State Capitol to discuss funding priorities, immigration justice and more.

Congress must finalize the federal budget for FY2027 by September 30, 2026. If an agreement is not reached, lawmakers may pass a temporary funding measure (or continuing resolution) to prevent a government shutdown while negotiations continue.

Federal funding decisions shape the foundation of community support systems across the country. CASL remains committed to advocating for equitable resources and ensuring that our community continues to have access to the services it needs to thrive.

CASL is a 501(c)(3) nonprofit organization. All content is educational and nonpartisan. CASL does not endorse or oppose any candidate, political party, or ballot measure.