"Big, Beautiful Bill" Proposes Sweeping Tax Cuts and Social Program Cuts Amid Concerns Over Impact on Low-Income Americans

Strategic Insights -

The United States House Republicans' "big, beautiful bill" is a far-reaching tax and spending legislation that proposes significant changes, including extending the 2017 tax cuts, slashing taxes for businesses and individuals, and enacting deep cuts to social programs like Medicaid and SNAP. While Republicans claim the bill will boost economic growth and provide relief for middle-class Americans, nonpartisan analysts warn that it could add trillions to the national debt and strip millions of Americans of medical and food assistance.

Key Takeaways:

  • The bill would add at least $2.5 trillion to the national deficit over the next 10 years and decrease federal tax revenue by $4 trillion by 2034.
  • The bill increases standard deductions for all Americans, including a $1,000 increase for individuals, $1,500 for heads of households, and $2,000 for married couples.
  • The bill extends the child tax credit of $2,000, increases the credit by $500 per child for the 2025 tax year, and allows families to annually contribute $5,000 tax-free.
  • The bill introduces a new tax deduction of $4,000 for Americans 65 and older, starting in 2025, for those with a gross income of $75,000 or less for a single person and $150,000 or less for a married couple.
  • The bill allows filers to write off up to $30,000 in local and state taxes from their federal filings, up from the current $10,000 cap.
  • The bill eliminates taxes on overtime pay for select individuals and tips for certain workers, such as food service and hair care professionals.
  • The bill proposes $880 billion in cuts to key government programs, with a focus on Medicaid and food stamps, which the CBO estimates could leave 10 million people without Medicaid access and 7.6 million without health insurance by 2034.
  • The bill introduces work requirements to receive benefits, shortens the open enrollment period for the Affordable Care Act, and forces states to take up more responsibility in funding the programs.
  • The bill would save $300 billion for the federal government but hit state budgets hard.

Statistics:

  • The bill would add at least $2.5 trillion to the national deficit over the next 10 years.
  • The bill would decrease federal tax revenue by $4 trillion by 2034.
  • 10 million people could lose Medicaid access and 7.6 million could lose access to health insurance by 2034, according to the CBO.
  • 1.2 million restaurant and tipped workers could lose access to Medicaid, according to a report from One Fair Wage.
  • 3 million people could lose SNAP access under the new plan, according to the CBO.
  • The bill would give the Treasury Department the authority to revoke the tax-exempt status of nonprofit organizations deemed to support terrorism.
  • The bill would introduce new taxes on colleges, with a varying tax rate based on the size of a university's endowment per student.
  • The bill would give the Trump administration authority to revoke the tax exempt status of nonprofit organizations without due process.

Sources:

  • (https://waysandmeans.house.gov/wp-content/uploads/2025/05/SMITMO_017_xml.pdf)
  • (https://taxfoundation.org/research/all/federal/big-beautiful-bill-house-gop-tax-plan/)
  • (https://www.dol.gov/general/topic/wages/wagestips)
  • (https://onefairwage.org/)
  • (https://www.aljazeera.com/news/2025/5/14/trump-administration-cuts-another-450m-in-harvard-grants-in-escalating-row)
  • (https://siepr.stanford.edu/news/study-shows-high-cost-and-low-benefit-border-wall-us-workers)