Seniors, students, taxpayers, and low-income Americans are among those who will feel the effects of President Donald Trump’s sweeping tax and spending bill, currently under negotiation on Capitol Hill. Dubbed the “One Big Beautiful Bill Act” by Republicans, the legislation has undergone several revisions. The latest version passed the Senate on Tuesday, with Vice President JD Vance casting the tie-breaking vote. This bill extends Trump’s first-term tax cuts, funds his border wall vision, and proposes cuts to federal support for social safety nets, affecting food and health insurance affordability.
Medicaid: Coverage at Risk for Millions
For Medicaid enrollees, the bill introduces a new work requirement for able-bodied adults aged 19 to 64, including parents of children aged 14 and older. These individuals must work, volunteer, or attend school for at least 80 hours a month. Additionally, states would receive less federal funding, potentially leading to benefit reductions or tighter enrollment criteria.
Nearly 12 million more people would be uninsured by 2034 due to these Medicaid provisions, according to a Congressional Budget Office analysis.
Food Assistance: Stricter Requirements
The bill expands work mandates for food stamp recipients, affecting those aged 55 to 64, parents of older children, veterans, and others. States would also need to cover part of the benefit costs, likely resulting in reduced benefits or eligibility. The growth of food stamp benefits would be limited, impacting many Americans’ ability to afford food.
Healthcare and Tax Implications
Affordable Care Act: Enrollment Challenges
Americans seeking coverage through Obamacare exchanges could face increased verification requirements and the end of automatic reenrollment, potentially leading to millions losing coverage.
Tax Cuts: Continuation and New Breaks
The bill aims to permanently extend individual income tax cuts from the 2017 Trump tax package. While taxpayers may not notice these extensions due to their continuity, households could see an average tax reduction of $2,900. Senior citizens would benefit from a temporary increase in the standard deduction, while parents would see an enhanced child tax credit.
Households would see their taxes reduced by $2,900 on average, according to a Tax Policy Center analysis.
Broader Economic and Social Impacts
State Governments: Financial Strain
With reduced federal support for Medicaid and food stamps, state governments might face tough decisions, potentially cutting benefits or funding in other areas like education and infrastructure.
Impact on the Wealthy and Corporations
Wealthy Americans stand to gain significantly from the tax package, with 60% of the benefits going to the top 20% of earners. Meanwhile, private universities with large endowments would face increased taxes, and the bill would end EV tax credits, affecting industries of the future.
“It gives handouts to industries of the past while severely damaging industries of the future,” Elon Musk commented, criticizing the abrupt end to EV tax credits.
National Debt Concerns
The bill is projected to increase the deficit by $3.3 trillion over the next decade. It also raises the debt ceiling by $5 trillion, allowing the Treasury to borrow more. This could lead to higher interest rates, impacting mortgages, car loans, and credit card payments.
Conclusion: A Divisive Legislative Move
The passage of Trump’s mega bill represents a significant shift in U.S. fiscal policy, with wide-ranging implications for Americans across the socioeconomic spectrum. While it promises tax relief for some, the cuts to social safety nets and the increase in national debt have sparked considerable debate. As the bill moves towards final approval, its long-term effects on the American economy and society remain a topic of intense scrutiny and discussion.
