In May 2025, President Donald Trump released an elaborate legislative bill package, one that he called “The One, Big, Beautiful Bill.” The proposal entails significant tax reforms, steep spending reductions, and major revamps of social programs like Medicaid.
Though its supporters hail it as a kept promise, critics fear the potential impact on vulnerable populations and the overall economy.
Tax reforms: permanent reductions and new incentives
According to the bill, over $5 trillion in tax reductions are aimed at making previous reductions permanent and introducing new incentives.
- Permanent tax reductions: The bill seeks to address tax cuts on individuals and corporations as permanent, with focused breaks on tipped workers and interest payments on car loans that are built in a U.S. plant.
- Eliminating clean energy incentives: To offset some of the tax reductions, the plan aims to remove clean energy incentives passed under the Biden administration.
- SALT deduction changes: The bill proposes capping state and local tax (SALT) deductions at $30,000 for individuals with incomes of $400,000 or less, a point of contention for lawmakers representing high-tax states.
Spending reductions: targeting social programs
To balance the extensive tax reductions, the bill outlines significant spending reductions, particularly affecting social safety net programs:
- Medicaid overhaul: The proposal includes approximately $900 billion in savings from Medicaid over the next decade. Changes involve stricter eligibility criteria, work requirements, and increased cost-sharing for enrollees. These measures could impact over 7.6 million individuals, potentially leading to a loss of coverage for many.
- SNAP program changes: States would have to cover a higher percentage of the cost of the Supplemental Nutrition Assistance Program (SNAP) and require more demanding work of recipients.
- Education and federal workforce changes: The bill suggests restructuring student loan repayment programs, imposing taxes on some college endowments, and modifying pension plans for federal workers.
- Healthcare consequences: beyond Medicaid, the provisions in the bill related to healthcare also raise alarms
- Impact on ACA subsidies: The proposal aims to reduce subsidies for Affordable Care Act (ACA) marketplace coverage, increasing premiums and making them less affordable for many.
- Impact on hospitals and insurers: Low-income patients’ hospitals and managed-care organizations in high-Medicaid-enrollment states can anticipate financial strain from increased uncompensated care.
Border Security and Defense Spending: The bill allocates significant resources to national security programs
- Border security enhancements: $69 billion would be spent to augment border security activities, including construction of the border wall, increased deportations, and additional enforcement agents.
- Increase in defense budget: An additional $150 billion would be spent on defense budgets, focusing on the development of a new missile defense system and the modernization of military equipment.
Political Climate: Support and Opposition
- Republican support: The bill is viewed by Republicans as an accomplishment of decades-long policy goals, with an emphasis on tax relief and reduced government expenditure.
- Democratic opposition: Democrats are opposed to the proposal because it disproportionately benefits high-income groups at the cost of low-income and vulnerable groups.
- Internal GOP divisions: Republicans are divided within their ranks over aspects of the bill, such as the extent of Medicaid cuts and the SALT deduction cap, which complicates the legislative path for the bill.
A Critical Legislative Turning Point
“The One, Big, Beautiful Bill” is a sweeping legislative package with far-reaching implications for the U.S. economy and society. As lawmakers debate furiously, the future of the bill will be anxiously watched, its implications waiting to chart the course of the nation on taxes, healthcare, and social welfare for generations to come.
