This is an apply information question. You have to see what the passage says about cutting spending, then match that information with one of the answers.
According to the passage, "Cutbacks in a particular program mean that the people who normally depend on that program now must spend more of their money to make up for the government cuts." Answer choice E matches this.
Cutbacks in food safety inspection lead to illnesses and people have to spend money they would otherwise not have to in order to compensate.
Choice A seems to indicate private construction companies would benefit from the cutbacks, which is not what the passage says.
Choice B is close, but it doesn’t say that sending the children to a different school costs people more money.
Choice C also seems to detail a potential benefit.
Choice D says fewer houses are built but it doesn’t indicate how people have to spend more money to compensate.