Trump's Tax Cut and Spending Law to Leave 10 Million Without Health Insurance and 2.4 Million Fewer on Food Aid

Strategic Insights -

President Donald Trump's massive tax cut and spending law, signed on July 4, 2025, will lead to a significant decline in resources for lower-income households, with approximately 10 million people losing access to health insurance by 2034, mostly Medicaid recipients. The Congressional Budget Office (CBO) analysis also found that 2.4 million fewer people will participate in a federal food aid program each month. While median-income households will experience a small overall gain in resources, those at the bottom of the income distribution will see a net loss of benefits due to changes in Medicaid and the Supplemental Nutrition Assistance Program (SNAP).

Key Takeaways:

  • The law will result in a 3% drop in resources over the next nine years for households in the bottom tenth of earners.
  • Households in the bottom 20% of the income distribution will see a net loss of resources, with those in the lowest tenth experiencing a drop of about $1,200 per year, accounting for 3% of their projected income.
  • Households in the middle 20% of the income distribution will receive, on average, between $800 and $1,200 more per year, accounting for 0.8% to 1% of their income.
  • Households in the top tenth of the income distribution will see an average increase of $13,600 annually, about 2.7% of their projected income.
  • 7.5 million Medicaid recipients will lose their benefits, with 5.6 million of them due to new work requirements.
  • The changes to SNAP will result in reduced participation by about 2.4 million people and save the federal government around $41 billion from 2026 to 2034.

Statistics:

  • 10 million people expected to lose access to health insurance by 2034, with 7.5 million losing Medicaid benefits.
  • 2.4 million fewer people participating in a federal food aid program each month.
  • 5.6 million people losing access to Medicaid due to new work requirements.
  • $1,200 per year decline in resources for the lowest tenth of households by income, accounting for 3% of their projected income.
  • $13,600 per year increase in resources for households in the top tenth of the income distribution, about 2.7% of their projected income.
  • 300,000 people fewer accessing SNAP benefits monthly due to state cost-share requirements.
  • $35 billion in state cost-share spending for SNAP benefits from 2026 to 2034.

Sources:

  • Congressional Budget Office. (2025, August). Distributional Effects of the "One Big Beautiful Bill Act" (Report No. 61367).
  • Congressional Budget Office. (2025, August). Supplemental Nutrition Assistance Program (SNAP) (Report No. 61367-SNAP).
  • The White House. (2025, July 4). President Trump Signs "One Big Beautiful Bill Act" into Law.