Congresswoman Stacey Plaskett addressed the H.R. 1 bill, federal funding, and the rum cover-over during a wide-ranging virtual event hosted by the League of Women Voters of the Virgin Islands on Saturday, July 12, as part of the group’s “Saturday Sessions.”
The conversation drew community members and residents eager for updates about how the sweeping federal legislation could impact health care access, economic development, and the territory’s long-term political future.
Much of the discussion centered around H.R. 1 — a federal budget reconciliation bill also known as the “Big Beautiful Bill.” Now law, the bill includes deep cuts to funding for key social programs like Medicaid, Medicare, and SNAP.
Plaskett said Medicaid will face roughly $900 billion in cuts nationwide, with additional work requirements expected every six months. About 21,000 Virgin Islanders are currently enrolled in Medicaid.
“That’s going to create a level of bureaucracy we’re concerned with,” Plaskett said.
“This represents some of the largest cuts to health care in American history, and it will have a tremendous effect on us in the Virgin Islands, where we have an outsize number of individuals who deal with these things,” Plaskett said.
Plaskett added that Medicare will also be affected due to the link between federal formulas and Medicaid spending, noting that there are more than 20,000 Medicare enrollees in the territory.
“Medicare, which is for those of us who are older, will be cut by about $500 billion,” Plaskett said.
SNAP benefits — also known as food stamps — are expected to see cuts too, with a $200 billion reduction nationwide, a 20% cut for all participants, along with a possible loss of federal funding for school lunch programs, which many students in the Virgin Islands rely on.
“Cuts to SNAP, which is our food stamp program, will also affect our school lunch programs,” Plaskett said.
In addition to federal funding, Plaskett highlighted her office’s outreach efforts to support youth in the territory — especially through military academy opportunities.
Plaskett said her office has hosted virtual meetings with parents and counselors to walk through the process.
“Our office supports young people … we’re going to the schools to try and get students ready to be able to apply,” Plaskett said.
Her office attempted to sound the alarm before the bill became law, warning residents that cuts to federal funding would impact programs across the territory, including education, school lunches, public health, and food assistance.
“People said I was fearmongering,” Plaskett said, “but I want us to be clearheaded and plan ahead.”
While the bill is already law, Plaskett emphasized the need for local planning and resilience.
“The issue for us now is how do we be creative with what we have?” Plaskett said. “[We need to] jump-start our economy so that we can have private sector revenues so that we are not so reliant on the federal government.”
One possible source of new revenue, Plaskett noted, is the rum cover-over program — a long-standing federal arrangement that returns excise taxes collected on rum sold in the mainland back to the Virgin Islands and Puerto Rico.
“We know that in the Virgin Islands we receive rum cover-over for the rum that we produce and bring to the United States,” Plaskett said. “That money comes back to us.”
She added that securing a consistent and permanent rate would help stabilize a major source of income for the territory.