The flypaper budget: Where the money sticks and who gets stuck
Republished from Kentucky Lantern
The ink is barely dry on the U.S. House’s version of the 2025 federal budget — the One Big Beautiful Bill Act— and Kentuckians have every reason to be concerned.
The bill enacts nearly $700 billion in Medicaid cuts over the next decade, slashes billions more from the Supplemental Nutrition Assistance Program (SNAP), and makes permanent a raft of tax cuts for the wealthiest individuals and corporations, as almost all of Kentucky’s congressional delegation hope against hope that tax breaks given to the wealthy eventually trickle down to everyday Kentuckians.
For families across Kentucky, these changes aren’t just political talking points; they are deeply personal. Medicaid provides health coverage for 1.4 million Kentuckians, including seniors in nursing homes, children with special needs and working parents who don’t receive health insurance through their jobs.
SNAP supports over 575,000 Kentuckians in putting food on the table, leading the Kentucky Center for Economic Policy to recently conclude that “the damage of this plan (i.e., ‘One Big Beautiful Bill’) will far outweigh its meager to non-existent benefits for Kentucky families.” As such, these cuts will ripple through communities, likely shuttering rural hospitals, increasing food insecurity and shifting burdens onto already stretched local services and state budgets.
Economists offer a useful metaphor to explain why this kind of trickle-down economic policy falls short: the flypaper effect. Originally coined to describe how government grants stick with the agencies that receive them rather than flowing to the people those agencies serve, the concept applies nearly as well to tax cuts at the top of the income ladder.
Like a fly on sticky paper, money tends to stay where it lands — accumulating in corporate coffers, stock buy-backs, executive bonuses, and the bank accounts and investment portfolios of the ultra-wealthy. And for what? More tax breaks for billionaires and corporations that are unlikely to reinvest in places like Benton, Beaver Dam or Beattyville. It rarely reaches Main Street in Hazard or helps struggling families in West Louisville.
The One Big Beautiful Bill Act is little more than trickle-down economics repackaged, almost assuredly failing the vast majority of Kentuckians once again.
To be sure, the budget includes some small nods to the working class and retirees: Tips and overtime pay will be exempt from federal income tax. The bill also allows middle and low-income seniors a greater tax deduction on their Social Security benefits.
While these gestures offer welcome relief to many Kentuckians in the service and hourly workforce, particularly in restaurant-heavy communities like Bowling Green or the manufacturing plants of Georgetown, and retirees, it pales in comparison to the sweeping, permanent tax benefits granted to the wealthiest of Americans. A bone tossed to workers and retirees does little to offset the structural tilt of the budget toward concentrated wealth and corporate power.
As 2024 Nobel laureates Daron Acemoglu and James A. Robinson explain in “Why Nations Fail,” sustainable prosperity depends on inclusive institutions that broaden access to opportunity, not extractive ones that concentrate wealth and power among a privileged few. Make no mistake about this: with this next budget, we are moving further into the latter. Trickle-down economics assumes wealth will eventually filter to lower-income Americans, but in practice, it locks resources at the top, reinforcing inequality and stagnating opportunity.
We’ve seen the warning signs before. In the 1980s, massive federal tax cuts under President Ronald Reagan touted as trickle-down economics were followed by exploding deficits and cutbacks to vital services, which ultimately convinced Reagan and Congress to reverse many of those tax cuts. In 2017, under the first Trump administration, tax cuts promised economic growth that never materialized for most Americans. Wages in Kentucky barely budged, even as the wealthiest in the nation saw record gains.
Now, with the One Big Beautiful Bill Act passing the House, we are watching the same script play out.
This time, the stakes are even higher for Kentuckians. In a state that already ranks near the bottom in health outcomes, slashing Medicaid funding will hurt both individuals and entire rural health systems. Meanwhile, cutting food assistance, although living costs continue to climb, will push more families toward the brink.
Kentucky’s economic challenges aren’t caused by working families asking for too much; they’re caused by policies that keep giving more to those who already have the most. Our commonwealth has seen what happens when coal jobs disappear, when opioid addiction ravages communities, and when opportunity is outsourced. What we need now isn’t another tax break at the top: We need strategic investment in our people and infrastructure.
The budget should be a reflection of our shared values. It should prioritize affordable and accessible health care in Berea, strong public schools in Covington, job training programs in Owensboro and small business development in Paducah. Instead, this budget undermines those possibilities and entrenches inequality — right here in the Bluegrass and across the nation.
The flypaper effect reminds us that where money lands matters. Right now, it’s not landing with ordinary Kentuckians. It’s sticking with the wealthiest Americans, while poor and working-class Kentuckians and our communities will shoulder the consequences. With the One Big Beautiful Bill, wealth sticks to wealth, power begets more power, and the cycle of inequality deepens.
Budgets are more than dry, technical financial blueprints; they are moral statements about who and what we value. If we truly value family and opportunity, then our national budget should reflect that. The One Big Beautiful Bill Act does not. We need a federal budget that works for the many, not for the privileges of the few.
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Kentucky Lantern is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Kentucky Lantern maintains editorial independence. Contact Editor Jamie Lucke for questions: [email protected]. Follow Kentucky Lantern on Facebook and Twitter. Kentucky Lantern stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.
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