Understood. I will identify the bill recently passed that Donald Trump has referred to as the "Big Beautiful Bill" and analyze its components using credible expert sources and early nonpartisan economic and policy analyses. I will focus on objective assessments of its potential impact on the U.S. economy and the lower and middle classes, including both direct economic consequences and broader societal effects.I'll get started and let you know once I have a detailed report ready.
Economic Impact of the "One Big Beautiful Bill Act" (Trump’s “Big Beautiful Bill”)
Overview: The “One Big Beautiful Bill Act” (OBBBA) is a sweeping 2025 budget reconciliation package recently passed by Congressional Republicans. It extends and expands the 2017 Tax Cuts and Jobs Act provisions (preventing their expiration in 2026) – including lower individual income tax rates, a larger standard deduction, and a doubled child tax credit – and adds new tax cuts (such as full expensing for business investments and tax breaks on overtime pay, tips, and inheritances)taxpolicycenter.orgwww.crfb.org. At the same time, it enacts deep spending cuts to social programs to partially offset lost revenue. Notably, the bill slashes roughly n300 billion from SNAP nutrition assistancewww.commonwealthfund.orgwww.commonwealthfund.org. These cuts help “pay for” large tax reductions that disproportionately benefit affluent households. In fact, independent analyses find the bill’s Medicaid cuts for low-income families (≈n1 trillion)www.americanprogress.orgwww.americanprogress.org. Critics have characterized it as an historic redistribution of resources upward – taking benefits from the poor to fund tax breaks for the richwww.commonwealthfund.orgwww.americanprogress.org. Given these concerns, it’s natural to ask: Does the bill have any components or strategy that could create broad economic benefits? Below we examine expert economic analyses of the OBBBA’s expected impact on growth, jobs, and the welfare of lower- and middle-class Americans. We focus on objective findings (e.g. from the Congressional Budget Office and nonpartisan researchers) rather than politicized claims.
Projected Economic Growth: Modest Boosts, Massive Debt
A central rationale for the bill is the classic supply-side argument: cutting taxes (especially on corporations and high-income “job creators”) will spur investment, job growth, and eventually “trickle down” to raise broad living standards. The White House’s Council of Economic Advisers (CEA) indeed projected extraordinary economic gains from the OBBBA. According to the CEA, the tax-and-spending package could boost GDP by up to 3.5%, increase business investment by 7.5%, and ultimately raise average wages by $11,600 per worker – even claiming a 5%+ GDP surge in the first few years after enactmenttaxpolicycenter.org. These rosy forecasts imply that rapid growth will generate much more revenue, supposedly offsetting the upfront cost of the tax cuts and mitigating debt. However, independent economists overwhelmingly reject these optimistic figures as unrealistic. The CEA’s estimates are outliers – “fantastical” in the words of one budget watchdogwww.crfb.orgwww.crfb.org. Crucially, the CEA made generous assumptions not borne out by the actual bill: for example, it assumed certain temporary tax breaks (full expensing of capital investments) would be made permanent and even modeled tax cuts not actually included in the legislation (like a special lower rate for manufacturing income)taxpolicycenter.org. By ignoring the bill’s downsides – such as rising federal debt and interest rates – and overestimating supply-side responses, the administration’s model vastly overstated growthwww.crfb.orgtaxpolicycenter.org.In contrast, nonpartisan analyses show only a modest uptick in growth from the OBBBA, at best. The official Joint Committee on Taxation (JCT) found the bill would lift GDP by only 0.4% over a decade (and that even business investment would fall slightly, as deficit effects counteract tax incentives)taxpolicycenter.org. Other macroeconomic models project similarly small long-term gains. For instance, the Penn Wharton Budget Model and Tax Foundation each estimate on the order of 0.7–0.8% higher GDP after 30 years due to the billtaxpolicycenter.org. These figures imply just a few hundredths of a percent faster annual growth – essentially a negligible change in the trend growth ratewww.crfb.org. In the near term, the massive tax cuts do act like a fiscal stimulus: pouring hundreds of billions of dollars into the economy can temporarily boost demand and output. Indeed, analysts agree OBBBA will provide a “large near-term boost” to the economy in its first years by stimulating consumer spending and business outlayswww.crfb.org. However, any early gains are short-lived and ultimately offset by negative factors. As the tax cuts are deficit-financed, the surge in federal borrowing is expected to push up interest rates, which crowds out private investment over timewww.pgpf.orgwww.pgpf.org. The CBO calculated that OBBBA’s heavier debt load would raise 10-year Treasury yields by about 0.14 percentage points on average in the next decade, dampening growthwww.pgpf.org. In fact, CBO’s dynamic analysis found that accounting for economic effects makes the fiscal outlook worse, not better: higher interest costs from the debt more than outweigh the small revenue gains from extra growthwww.pgpf.org. Several independent models – including those from Yale University’s Budget Lab and Penn Wharton – actually project that OBBBA will reduce long-run GDP relative to current law, once the drag from debt and higher financing costs kicks inwww.crfb.orgwww.crfb.org. For example, Wharton’s model suggests that by 2054 the economy could be 3.6% smaller than baseline if all the bill’s provisions were made permanent, due to the accumulated debt burdenwww.crfb.org. In short, there is little evidence that the bill’s tax cuts will “pay for themselves” through growth or generate any large, sustained boost to the overall economywww.pgpf.orgwww.crfb.org. At most, forecasters see a brief bump in GDP followed by a return to the same modest growth trend – or even a slight decline in output in the long run if the debt remains uncheckedwww.crfb.orgwww.crfb.org. As the Tax Policy Center summed up, OBBBA’s pro-growth elements (lower marginal tax rates, investment incentives) are largely “modest at best” and are “swamped” by the negative fiscal side-effects of debt and higher interest ratestaxpolicycenter.org.It’s worth noting that the bill does contain some provisions that could encourage investment and work on the margins. For instance, it restores full expensing for equipment and R&D (temporarily undoing the phaseouts that were scheduled under the 2017 tax law)www.crfb.org. This allows businesses to deduct capital purchases immediately, lowering the cost of new machinery, technology, and factory construction – a policy empirically linked to slightly higher investment in the short run. Similarly, the extension of the 20% pass-through business income deduction for small businesses may spur some entrepreneurship or hiringwww.crfb.org. The bill also creates new incentives like a deduction for auto loan interest and a tax credit for certain manufacturing investments, aiming to stimulate consumer durables spending and domestic factory expansionwww.crfb.orgwww.crfb.org. These targeted measures can provide localized or sector-specific economic benefits (e.g. a boost to the auto industry or to construction jobs if factories are built). Likewise, on the labor supply side, making overtime pay and tips tax-free up to certain limits is intended to reward workers who put in extra hours, potentially encouraging more labor effortwww.crfb.org. In theory, this could increase take-home pay for middle-class hourly workers and incentivize businesses to expand hours or staffing. However, while such provisions might marginally improve work incentives or productivity, the consensus of economists is that their macroeconomic impact will be very small. For example, the JCT and Penn Wharton models incorporating these incentives still show only ~0.1–0.4% higher output a decade from nowwww.crfb.orgwww.crfb.org. Moreover, many of the pro-growth tax measures in OBBBA are temporary, set to expire before 2030, which blunts their effectiveness – businesses are less likely to make long-term investments for a short-lived tax breaktaxpolicycenter.org. In summary, credible analyses indicate the bill’s overall growth strategy is limited in its impact. There may be some broad economic benefit in the short term, as households and companies respond to tax relief by spending and investing more, and a few targeted incentives could yield incremental efficiency gains. But no neutral evidence suggests a transformative boom in GDP or incomes. Instead, the modest benefits are largely offset or outweighed by the bill’s costs, particularly the greatly expanded federal debt burdenwww.pgpf.orgtaxpolicycenter.org. Even the more optimistic models (e.g. from the Tax Foundation or American Enterprise Institute) predict that only a fraction of the tax cuts’ cost (perhaps 10–20%) will be recouped through higher growth, falling far short of self-financingwww.crfb.org. In the end, future taxpayers would still be on the hook for trillions in new borrowing, with interest payments escalating and potentially crowding out productive public and private investmentwww.pgpf.orgwww.crfb.org.
Impact on Middle- and Lower-Income Americans
While the economy-wide growth effects appear muted, the distributional and social impacts of the OBBBA are significant – and largely negative for low- and middle-income Americans. The combination of regressive tax cuts and deep spending reductions means that wealthy households come out far ahead, whereas many vulnerable groups lose vital support. The top 1% of earners are the clear winners: they would receive roughly 1 trillion in total tax cuts** over ten years[americanprogress.org](https://www.americanprogress.org/article/1-trillion-in-medicaid-cuts-1-trillion-in-tax-giveaways-for-the-richest-1-percent-the-one-big-beautiful-bills-budget-math/#:~:text=Tax%20giveaways%3A%20%241%20trillion%20to,the%20richest%201%20percent). For perspective, this elite group’s tax reduction (from extending estate tax exemptions, cutting capital gains levies, raising SALT deductions, etc.) is about **equal to the entire amount of Medicaid spending cut** from poor families[americanprogress.org](https://www.americanprogress.org/article/1-trillion-in-medicaid-cuts-1-trillion-in-tax-giveaways-for-the-richest-1-percent-the-one-big-beautiful-bills-budget-math/#:~:text=On%20July%203rd%2C%20Congressional%20Republicans,trillion%20over%20the%20next%20decade)[americanprogress.org](https://www.americanprogress.org/article/1-trillion-in-medicaid-cuts-1-trillion-in-tax-giveaways-for-the-richest-1-percent-the-one-big-beautiful-bills-budget-math/#:~:text=Tax%20giveaways%3A%20%241%20trillion%20to,the%20richest%201%20percent). One analysis found that on average the **richest 10% of households gain about n12,000 per year from the bill’s tax changes, whereas the bottom 10% lose about 1,600** per year in benefits – a stark redistribution of resources upward[commonwealthfund.org](https://www.commonwealthfund.org/publications/issue-briefs/2025/jun/how-medicaid-snap-cutbacks-one-big-beautiful-bill-trigger-job-losses-states#:~:text=By%20cutting%20safety,9). Overall, the **highest-earning 20% of Americans would reap about 69% of the bill’s tax cuts** (with the top 1% alone netting huge annual savings of tens of thousands of dollars each), while lower- and middle-class families get a much smaller share of the tax relief[itep.org](https://itep.org/2025/06/#:~:text=June%2020%2C%202025)[commonwealthfund.org](https://www.commonwealthfund.org/publications/issue-briefs/2025/jun/how-medicaid-snap-cutbacks-one-big-beautiful-bill-trigger-job-losses-states#:~:text=By%20cutting%20safety,9).To be fair, **middle-class workers do receive some tax benefits** under the legislation. Notably, the bill prevents a scheduled tax hike in 2026 by **making permanent the income-tax rate reductions and larger standard deduction** from the 2017 reforms[crfb.org](https://www.crfb.org/blogs/comparing-senate-and-house-obbbas#:~:text=Finance%20Extend%20%26%20Expand%20Rate,820%20billion%20%2B%2483). This avoids an across-the-board increase in payroll withholding that would have hit many moderate earners. Middle-income parents also keep the **expanded child tax credit of n2,000 per child (rather than reverting to 1,000) and can benefit from new or expanded credits for **child care, dependent care, adoption, and charitable giving**[crfb.org](https://www.crfb.org/blogs/comparing-senate-and-house-obbbas#:~:text=Create%20Scholarship%20Tax%20Credit%20,21%20billion)[crfb.org](https://www.crfb.org/blogs/comparing-senate-and-house-obbbas#:~:text=Expansions%20of%20Credits%20for%20Adoption%2C,21%20billion). For example, a family earning n50,000 might see a few hundred dollars of tax savings from the extended brackets and child credit – money that could be spent in the local economy. Seniors get a higher standard deduction, potentially reducing tax burdens on some retireeswww.crfb.org. And as mentioned, workers putting in overtime or relying on tips may see a tax break that increases their take-home pay modestly. These provisions reflect an attempt by drafters to sprinkle some populist benefits for the middle class and not just the wealthy. However, any gains to ordinary Americans from the tax side are largely erased by the bill’s cuts to public programs that those same Americans rely on. For instance, the average middle-income household could save a few hundred dollars in taxes but might face higher costs for healthcare or education due to other parts of the bill. The “pay-fors” in OBBBA target programs that predominantly serve low- and middle-income people: health coverage, food assistance, and higher education subsidiestaxpolicycenter.orgwww.commonwealthfund.org.The Medicaid cuts are especially consequential. By CBO’s estimates, the bill will reduce federal Medicaid spending by 793–863 billion over 10 years**[kff.org](https://www.kff.org/medicaid/issue-brief/medicaid-changes-in-house-reconciliation-bill-would-increase-costs-for-1-3-million-low-income-medicare-beneficiaries/#:~:text=cuts%20by%20cutting%20Medicaid,eligible%20individuals)[commonwealthfund.org](https://www.commonwealthfund.org/publications/issue-briefs/2025/jun/how-medicaid-snap-cutbacks-one-big-beautiful-bill-trigger-job-losses-states#:~:text=,Budget%20Office%20estimates%2C%20along%20with). These savings come from measures like imposing **Medicaid work requirements**, tightening eligibility verification, and repealing incentives for states to maintain coverage[crfb.org](https://www.crfb.org/blogs/comparing-senate-and-house-obbbas#:~:text=Require%20States%20to%20Establish%20Medicaid,18%20billion)[kff.org](https://www.kff.org/medicaid/issue-brief/medicaid-changes-in-house-reconciliation-bill-would-increase-costs-for-1-3-million-low-income-medicare-beneficiaries/#:~:text=beneficiaries%20stems%20from%20delaying%20implementation,rules%20from%20ever%20being%20implemented). The human impact is stark: CBO projects about **10 to 11 million fewer Americans will have Medicaid in 2034** than under current law[kff.org](https://www.kff.org/medicaid/issue-brief/medicaid-changes-in-house-reconciliation-bill-would-increase-costs-for-1-3-million-low-income-medicare-beneficiaries/#:~:text=cuts%20by%20cutting%20Medicaid,eligible%20individuals)[commonwealthfund.org](https://www.commonwealthfund.org/publications/issue-briefs/2025/jun/how-medicaid-snap-cutbacks-one-big-beautiful-bill-trigger-job-losses-states#:~:text=The%20Congressional%20Budget%20Office%20,50). That includes millions of **children, people with disabilities, and seniors in nursing homes** who could lose coverage. Notably, an estimated **1.3 million poor seniors and disabled individuals (“dual eligibles” who have both Medicare and Medicaid)** would lose Medicaid help with their Medicare premiums and cost-sharing, because the bill reverses recent rules that simplified enrollment for them[kff.org](https://www.kff.org/medicaid/issue-brief/medicaid-changes-in-house-reconciliation-bill-would-increase-costs-for-1-3-million-low-income-medicare-beneficiaries/#:~:text=by%20%24793%20billion%20over%20ten,to%20lose%20coverage%20as%20a)[kff.org](https://www.kff.org/medicaid/issue-brief/medicaid-changes-in-house-reconciliation-bill-would-increase-costs-for-1-3-million-low-income-medicare-beneficiaries/#:~:text=Dual,emergency%20medical). These low-income Medicare beneficiaries would effectively have to pay more out-of-pocket for their medical care, despite living on fixed incomes[kff.org](https://www.kff.org/medicaid/issue-brief/medicaid-changes-in-house-reconciliation-bill-would-increase-costs-for-1-3-million-low-income-medicare-beneficiaries/#:~:text=Dual,emergency%20medical). Additionally, by delaying or blocking these enrollment simplification rules, many seniors would also lose Medicaid coverage of services Medicare doesn’t fully cover – such as long-term nursing care, dental care, and transportation to medical appointments[kff.org](https://www.kff.org/medicaid/issue-brief/medicaid-changes-in-house-reconciliation-bill-would-increase-costs-for-1-3-million-low-income-medicare-beneficiaries/#:~:text=Dual,emergency%20medical%20transportation). This illustrates how the bill’s Medicaid provisions increase financial strain on vulnerable groups (in this case, impoverished elderly and disabled individuals). More broadly, **CBO predicts OBBBA will increase the number of uninsured Americans by about 16 million by 2034** – roughly a 50% increase in the uninsured rate[commonwealthfund.org](https://www.commonwealthfund.org/publications/issue-briefs/2025/jun/how-medicaid-snap-cutbacks-one-big-beautiful-bill-trigger-job-losses-states#:~:text=The%20Congressional%20Budget%20Office%20,50). This figure includes the **Medicaid losses** plus people who lose private insurance, for example due to the bill’s cuts to Affordable Care Act subsidies. (The bill allows enhanced ACA marketplace tax credits to expire in 2025, causing over **5 million people** to lose affordable coverage on the exchanges[commonwealthfund.org](https://www.commonwealthfund.org/publications/issue-briefs/2025/jun/how-medicaid-snap-cutbacks-one-big-beautiful-bill-trigger-job-losses-states#:~:text=The%20Congressional%20Budget%20Office%20,50).) Such a sharp rise in the uninsured would likely lead to worse health outcomes and higher medical debt among the lower-middle class, as fewer people can afford doctor visits, medications, or preventive care. Hospitals (especially rural hospitals and safety-net providers) are also put at risk – they would face an increase in uncompensated care with millions more uninsured patients, and **hundreds of rural hospitals could be in danger of closure** if Medicaid revenues dry up[americanprogress.org](https://www.americanprogress.org/article/1-trillion-in-medicaid-cuts-1-trillion-in-tax-giveaways-for-the-richest-1-percent-the-one-big-beautiful-bills-budget-math/#:~:text=Program%20,can%20no%20longer%20pay%20for).The bill likewise slashes the Supplemental Nutrition Assistance Program (**SNAP**, formerly food stamps), with roughly **n295 billion in cuts coming mainly from stricter work requirements and forcing states to bear more of the program’s costwww.commonwealthfund.orgwww.commonwealthfund.org. CBO estimates SNAP enrollment will drop by about 4.7 million people on average, as many adults without dependents are timed out of benefits or deemed ineligible under the new ruleswww.commonwealthfund.org. Those who remain on SNAP would see their monthly food aid reduced, since the bill changes benefit calculations (for example, no longer accounting for certain living expenses in determining need)www.crfb.orgwww.crfb.org. For low-income families, smaller SNAP allotments mean increased food insecurity and hardship. Any tax relief such a family receives from OBBBA (likely minimal, as many poor households don’t earn enough to owe income tax) would not make up for the loss of food assistance. In essence, the bill gives with one hand and takes away with two for the poor: whatever meager tax cuts they get are overshadowed by cuts to nutrition, healthcare, and other vital support. This is why experts describe the legislation as fundamentally regressive. According to a Commonwealth Fund study, the lowest-income households (bottom 10%) would lose an average of 1,600** in annual resources (benefits, etc.), while high-income households gain thousands – exacerbating inequality[commonwealthfund.org](https://www.commonwealthfund.org/publications/issue-briefs/2025/jun/how-medicaid-snap-cutbacks-one-big-beautiful-bill-trigger-job-losses-states#:~:text=By%20cutting%20safety,9). Another analysis by the Institute on Taxation and Economic Policy found **the top 1% of Americans would receive a ~n70,000 yearly tax cut on average, whereas many middle-class families see only modest tax savings (and could be net negative once program cuts are considered)itep.org.Supporters argue that work requirements in Medicaid and SNAP might encourage more able-bodied adults to join the workforce, ostensibly leading to higher incomes for them and a reduction in government dependency. It is true that the OBBBA’s policies would remove millions from welfare rolls – but evidence from past experiments suggests most do not subsequently find stable, substantial employment. Instead, they often experience periods of uninsurance or hunger without a significant gain in earnings. For example, when some states implemented SNAP work requirements, many recipients simply lost benefits without finding jobs, or they churned in and out of eligibility. The common result is a reduction in aid distribution (and thus federal spending) rather than a dramatic increase in employment or productivity among former beneficiaries. In fact, by cutting programs like SNAP and Medicaid, the bill could hurt the broader economy and workforce in indirect ways. Poor health and nutrition can undermine people’s ability to work; a person who loses health coverage may delay treatment for a chronic condition and become less able to hold a job. Likewise, reduced SNAP benefits can lead to malnutrition, affecting children’s development and future productivity. These societal impacts are hard to quantify immediately, but over time they could reduce human capital in the economy. This runs counter to the goal of fostering broad-based economic growth.