In her biweekly column, “State of the Territory,” former Sen. Janelle K. Sarauw delves deeper into issues of concern for V.I. residents.
The U.S. Senate’s passage of the One Big Beautiful Bill Act (OBBBA) marks a dangerous inflection point in American domestic policy, and for the people of the U.S. Virgin Islands, it sets off alarm bells we can no longer afford to ignore. Billed as a transformative fiscal package aimed at restoring “American greatness,” this legislation is nothing short of a disaster for small, under-resourced jurisdictions like ours. If enacted in its current form, it would not just cut services. It would systematically dismantle the fragile support systems that keep our territory afloat.
This is not abstract policy. It is a direct attack on our healthcare system, our social safety net, our children, our seniors, our working families, our hospitals, our economy, and the very political status that denies us a meaningful voice in federal decision-making. OBBBA is not just a budget bill. It is a structural earthquake, one that threatens to leave the Virgin Islands buried under the rubble.
- Medicaid Meltdown and the Collapse of Public Health
OBBBA’s changes to Medicaid are among the most dangerous elements of the bill. The legislation recalculates funding based on population size rather than healthcare needs, which is a death sentence for the Virgin Islands. Our small population, spread across three islands, disproportionately older, and often battling chronic illnesses, already stretches limited Medicaid dollars to the brink. Reverting to capped block grants based on population rather than actual healthcare costs guarantees a massive shortfall.
And it does not stop there. The bill imposes expanded work requirements, now including parents of children as young as 15. On paper, that might look like reform. In practice, it is a policy disaster. Many Virgin Islanders who are technically “able-bodied” work in low-wage, part-time, or seasonal jobs without benefits. Others are caregivers, managing family obligations that disqualify them from formal employment. This blunt policy shift does not acknowledge those realities. It punishes them.
The result is that thousands of Virgin Islanders stand to lose their Medicaid coverage. They will turn to our already overwhelmed public hospitals, Schneider Regional and Juan F. Luis, for care they can no longer afford. These hospitals, already operating on razor-thin margins, will be forced to absorb astronomical increases in uncompensated care. Without adequate reimbursement, they will buckle under the pressure. Layoffs will follow. Essential services will be cut. And patients will suffer.
- Death by a Thousand Cuts: Social Services Gutted
This bill is not just anti-healthcare. It is anti-poor, anti-worker, and anti-territory. The ripple effects across core social safety net programs will be devastating:
- SNAP (Food Assistance): Eligibility restrictions and asset tests will disqualify working families who rely on food support. Many Virgin Islanders already face food insecurity. This will make it worse.
- Section 8 and MAP Housing: The federal government is signaling cuts to affordable housing programs. In a territory already suffering from a housing crisis, this means longer waitlists, more homelessness, and greater instability.
- Head Start and Early Childhood Education: These programs are the cornerstone of opportunity for low-income children. Reductions in federal funding will mean fewer seats, fewer services, and less early intervention.
- Meals on Wheels and Senior Services: For isolated seniors, Meals on Wheels is sometimes the only consistent source of food and social interaction. With funding on the chopping block, many seniors may be left behind.
- Childcare Assistance: As childcare subsidies shrink, families will face impossible choices between working and parenting. Without support, workforce participation will drop, and poverty will rise.
- LIHEAP (Low-Income Energy Assistance): In one of the hottest, most expensive energy markets in the U.S., cuts to energy assistance programs for seniors could force them to choose between electricity and medicine. That is not hyperbole. It is fact.
III. Education, Disaster Recovery, and Federal Program Erosion
Beyond healthcare and social services, OBBBA presents a direct and dangerous threat to public education in the Virgin Islands. At every level—from early childhood through higher education—our schools depend heavily on federal funding streams that are now at risk.
- Title I Grants, which support public schools with large low-income student populations, could be reduced or capped. This would mean fewer teachers, fewer instructional aides, and fewer after-school programs. Nearly all public schools in the territory qualify as Title I, so the damage would be widespread.
- Special Education funding under IDEA could be slashed or frozen, leaving children with disabilities without access to essential support services, including speech and occupational therapy.
- Pell Grants and TRIO programs at the University of the Virgin Islands could face flat funding or reductions, threatening access to higher education for low-income, first-generation college students.
- Head Start and Early Head Start programs, already serving hundreds of children across St. Croix, St. Thomas, and St. John, would likely see enrollment limits, staffing shortages, and diminished programming if early education funds are cut.
- Capital improvement and post-disaster rebuilding efforts in the public school system, especially critical following Hurricanes Irma and Maria, may slow down or stall entirely if infrastructure grants and discretionary appropriations dry up.
The Virgin Islands Department of Education is already managing significant challenges, including teacher shortages, facility deterioration, and chronic underfunding. OBBBA would strip away what little stability remains. Federal education dollars are not supplemental here—they are foundational. Without them, the future of public education in the Virgin Islands becomes uncertain.
- Public Sector Job Loss and Institutional Fragility
As federal dollars disappear, so do jobs. The Virgin Islands relies heavily on federally funded positions across healthcare, education, social services, and nonprofits. OBBBA will directly lead to job losses across multiple sectors, including:
- Human Services
- Public Health
- Nonprofit programs
- Childcare centers
- Energy and housing support agencies
These are not just jobs. They are services, lifelines, and systems. When they disappear, the damage will cascade.
- Political Status and Systemic Injustice Laid Bare
At its core, this bill reveals a deeper truth. The United States treats the territories as expendable. We are subject to federal laws but denied full political representation. We do not vote for president. Our delegate cannot vote on final legislation. Yet we bear the full brunt of Congressional austerity.
When lawmakers say able-bodied adults should “go get better jobs,” they are imagining an economic landscape that does not exist in the Virgin Islands. When they gut programs like Medicaid, SNAP, and LIHEAP, they are acting as if these are handouts to freeloaders, rather than what they are, which is essential scaffolding for survival in a structurally disadvantaged society.
By withdrawing federal investment without structural reform, this bill punishes the Virgin Islands for the very conditions Congress helped create and now refuses to remedy.
What Happens Next: A Crisis in the Making
If the bill becomes law, the Virgin Islands will be left to absorb the costs that Washington refuses to acknowledge. Our hospitals will see their uncompensated care costs skyrocket. Our nonprofit service providers will face impossible demand with shrinking grant support. Our local government, already financially constrained, will be forced to stretch its limited resources even further to cover federal shortfalls. And the people, especially our children, elders, and working poor, will pay the price.
This is not a bill for a better America. It is a bill that punishes poverty, ignores complexity, and treats the territories as expendable.
Final Implication: Institutional Strain, Political Reckoning
Ultimately, the full implication of OBBBA is that it breaks the social contract between the federal government and the Virgin Islands. It disinvests in healthcare, education, housing, energy, disaster preparedness, and human capital, all while limiting the territory’s ability to adapt or respond. It is, in effect, a forced austerity regime imposed on a community that already lacks full political representation or fiscal autonomy.
If enacted, this legislation will exacerbate poverty, widen inequality, deepen political alienation, and destabilize the most essential institutions of our society. And unlike the states, where political backlash can result in electoral accountability, the people of the Virgin Islands would suffer the consequences without a vote, without a voice, and without meaningful recourse.
A Path Forward
The One Big Beautiful Bill Act may represent political strategy for some, but for the Virgin Islands, it poses immediate and profound threats to our health system, social safety net, and economic stability. As such, it demands a thoughtful and coordinated response. Now is the time for our leaders, both local and federal, to assess the implications in full, engage with decision-makers in Washington, and advocate firmly for carve-outs, exemptions, and policy adjustments that reflect the unique realities of life in the territories.
We are not asking for special treatment. We are asking for fairness, flexibility, and a recognition of structural difference. The people of the Virgin Islands, resilient, hard-working, and proud, deserve policies that empower rather than policies that dismantle.
Editor’s Note: Opinion articles do not represent the views of the Virgin Islands Source newsroom and are the sole expressed opinion of the writer. Submissions can be made to [email protected].
