The “Big, Beautiful Bill” and How Ugly it Can Be for Americans

In the past few weeks, you may have seen the words “big, beautiful bill” floating around on your television while watching the news. But what is this bill? To simplify it down, it is a spending bill that allocates the budget and tax spending of the federal government. However, President Trump’s spending bill is one that will impact millions in the United States. An act that focuses on tax cuts, a decrease in funding for social welfare programs, and an increase in border and defense spending, the One Big Beautiful Bill Act (OBBBA) has multiple facets. 

Tax Cuts

One of the focal points to President Trump’s campaign was tax cuts. He promised to help Americans by giving them larger tax breaks, allowing them to spend the money they worked so hard to earn. In this bill, tax cuts are largely mentioned, which is a good thing, right? However, it gets a little bit more complicated than that. OBBBA addresses the State and Local Tax (SALT) deduction cap. Now the SALT deduction cap is for taxpayers who want to reduce their amount of federally taxable income. SALT allows taxpayers to itemize their state and local taxes, such as income taxes and property taxes, as a deductible expense. This subtracts your state and local tax from your federally taxable income, making it smaller. Therefore, your federal taxes will be a lesser amount. 

For example, let’s say you pay $15,000 in SALT and your federally taxable income is $120,000. Before OBBBA, the SALT deduction cap was $10,000. So, you itemize $10,000 of your $15,000 state and local tax as a deductible from your federally taxable income. Your federally taxable income becomes $110,000 instead of $120,000, and your federal tax is based off of the number $110,000. Let’s say your federal tax rate, based on your income bracket, is 20%. With the federally taxable income of $120,000, $24,000 would go to federal taxes. However, with a federally taxable income of $110,000, $22,000 would go to federal taxes. This is a $2,000 difference, and this tax break will only get bigger with OBBBA as the SALT deduction cap has now risen to $40,000. 

Although it sounds great, there is a caveat to the change in the SALT deduction cap. SALT deductibles are only really helpful in states that have high state taxes, such as California, New York, and Massachusetts. These states also contain some of the wealthiest people of this country. Wealthy homeowners and families, with high state income and property taxes, are thus getting a bigger federal tax break than anyone else. Americans in states with lower SALT rates, in which most make an average or below average income, are not really benefiting from this change. 

Fig. 1. Tax breaks married couples with different incomes will receive under new SALT cap; “Further SALT Cap Relief Only Benefits High Earners | Committee for a Responsible Federal Budget.” Committee for a Responsible Federal Budget, 21 May 2025, www.crfb.org/blogs/further-salt-cap-relief-only-benefits-high-earners.

There are some tax breaks included in OBBBA that will help a wider range of 

Americans. For example, seniors above the age of 65 will receive a $6,000 tax deduction from the years 2025 to 2028, if they make an individual income of $75,000 or less. Seniors with a higher income will receive less. If you are a parent, the child tax credit you receive would increase from $2000 to $2,200 per child. This applies to parents making an individual income of up to $200,000. 

Overall, however, these tax breaks and cuts will help the wealthiest people of America the most. The Hill predicts that individuals with an income of $460,000 to $1.1 million, those in the 95th to 100th percentile when it comes to annual income in America, will increase their after- tax income by 4.4%. This translates into a $21,000 tax break. On the other hand, those making an income of $34,600 or less will receive a tax break of about $150, which is about a 0.8% increase in after-tax income. 

              Fig. 2. Increase in after-tax income in different income brackets as a result of OBBBA. 

Social Welfare 

OBBBA is also taking on Social Welfare programs, such as Medicaid and SNAP. Under OBBBA, Medicaid is going to change drastically as the federal government will cut about $1 trillion in funding for federal health in the next decade. Additionally, for the first time, there are work requirements people need to meet to be considered for Medicaid. With OBBBA, able-bodied adults who are between the ages of 18 and 64 and do not have any dependents will have to prove that they are working, volunteering, or in school for at least 80 hours a month to receive Medicaid. Many people who are on Medicaid already may not meet these requirements, and thus will lose their medical coverage. 

Additionally, there will be much more frequent eligibility checks to ensure that an individual supported by Medicaid is meeting the work requirement. These checks could be every six months. With these new laws put into place, health insurance and receiving treatment will become extremely difficult for many Americans throughout the country. In fact, the Congressional Budget Office predicts that OBBBA will cause 12 million Americans to lose their medical coverage by 2034. 

SNAP, a federally funded nutrition program that helps low-income families with the expenses of groceries through food stamps, will also become challenging for many to obtain under the new restrictions of OBBBA. For example, SNAP already has a work requirement set into place but OBBBA changed some of its rules. The act has raised the work requirement for SNAP from 54 to 64 years old. Furthermore, parents of children who are 7 to 17 years old will also have to prove they are working at least 80 hours a month. Before OBBBA, parents were exempt from the work requirement, but now some parents will have to meet the requirements to be eligible for SNAP. 

Changes in the requirements of SNAP is not the only modification to SNAP. SNAP is a fully federally funded program, but under OBBBA, some states will have to shoulder the financial load of the program. The federal government will continue to fund SNAP in states that have an error payment rate below 6%. The SNAP payment error rate reflects the accuracy of state agencies in determining a household's eligibility for SNAP benefits and the correct benefit amount they should receive. This includes instances where households receive too much (overpayments) or too little (underpayments). If a state has a rate above 6%, they will be responsible for 5% to 15% of SNAP costs. Most states have an error payment rate above 6%. In fact, only 8 states are below 6%. This shifting of costs from the federal government to the states is a threat to those who are on SNAP because many states cannot pay all of the expenses necessary for this program. As a result, it is predicted that more than 3 million Americans could lose SNAP benefits. These changes and cuts in federal spending will negatively impact the lives of millions across the country. 

Fig. 3. Map of states and their SNAP error payment rates, and what this could mean for their SNAP cost-share; “SNAP Payment Error Rates | Food and Nutrition Service.” Www.fns.usda.gov, www.fns.usda.gov/snap/qc/per.

Defense and DHS Spending

So far we’ve only brought up cuts in federal spending. But don’t worry, OBBBA also includes increases in spending. One of President Trump’s main concerns this term is immigration and the deportation of undocumented immigrants. To ensure that this goal is carried out, he has allocated a large amount of federal funds to the Department of Homeland Security (DHS) and Department of Defense. OBBBA outlines the distribution of $46.5 billion for the construction of a border wall between the United States and Mexico, $45 billion to construct and expand the amount of immigration detention centers in the country, and $30 billion to strengthen the Immigration and Customs Enforcement (ICE) Agency. When it comes to defense, this legislation is giving $150 billion to the Department of Defense. These funds are to support increased shipbuilding, the construction of the “Golden Dome”, a missile defense system, and the modernization of the U.S. military. This bill puts a heavy emphasis on developing and expanding the military strength of the United States. 

Fig. 4. Costs and savings of the federal government under OBBBA; Drenon, Brandon. “The Key Items of House Republican’s “Big Beautiful Bill.”” BBC, 22 May 2025, www.bbc.com/news/articles/c0eqpz23l9jo.

The Purpose of the “Big, Beautiful Bill”

OBBBA is a piece of legislation that deals with how the United States chooses to spend its funds. Approved by the Senate and the House, and signed into law by President Trump, this bill is supposedly to help the people of this country. With Republicans saying that this bill will advance the United States into greatness, and not a single Democrat in Congress supporting the legislation, there are mixed beliefs and viewpoints when it comes to OBBBA. However, there is one thing that is for certain when it comes to this act: Americans will get hurt. 

Bibliography

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Main Image for Article:

Ives-Rublee, Mia, and Kim Musheno. “The Truth about the One Big Beautiful Bill Act’s Cuts to Medicaid and Medicare.” Center for American Progress, 3 July 2025, www.americanprogress.org/article/the-truth-about-the-one-big-beautiful-bill-acts-cuts-to-medicaid-and-medicare/.