On July 4, 2025, President Trump signed a large budget bill with an abundance of other provisions, which he called the “One Big Beautiful Bill” into law. The bill passed the Senate on July 1, 2025, with a tie-breaking vote cast by Vice President Vance after three Republican Senators broke party lines to vote against the bill. It then passed the House in a 218 to 214 vote with two Republicans voting against. President Trump has called the bill, “the largest middle-class tax cut in history,” and says that the bill will fulfill the promises that he made to the American people and “put America first.” Trump stated that it “…unleashes economic prosperity and empowers every American while strengthening our nation’s defenses and boldly looking to the future.” However, the megabill contains a lot of other provisions that experts say will hurt the lower class and will harm the economy.
The biggest and most publicly mentioned part of the bill is the large tax cuts, which according to the Tax Foundation, will cost around $3.7 trillion for the US government over the next decade. The tax cuts are an extension of a bill passed by Trump in 2017 that is set to expire in 2026. The Joint Committee on Taxation, which is currently under Republican control, estimates that the tax cuts will benefit working-class Americans, with people making less than $50,000 per year getting the largest percentage of cuts. However, these same lower-income households will have their benefits cut as well. In order to make these tax cuts, Trump’s bill contains large funding cuts to Medicaid and SNAP (food stamp programs), essentially weakening the safety net for low-income families. Other sources of analysis, such as the Committee for a Responsible Federal Budget, analyze that the wealthy classes will benefit the most from the tax cuts. Furthermore, the tax cuts are projected to increase the national deficit by $4.3 trillion over the next 10 years.
Another feature of the bill mentioned by Trump is “eliminating taxes on tips, overtime, and social security.” These tax eliminations are something that Trump promised on the campaign trail as a way to lower taxes for workers. However, there are some caveats in the bill. While the first $25,000 in tips earned by an employee is deductible (an expense that can be subtracted from total income, resulting in a lower income tax), this deduction would decrease when an employee makes over $150,000. Furthermore, only certain occupations can apply, and the deductible can only be used for federal income taxes. Since lower-income Americans already don’t pay these taxes, it means that the benefits will primarily go to higher-income Americans. With “no taxes on overtime,” there is a deduction limit of $12,500 per year, only for workers qualified for overtime benefits under the Fair Labor Standards Act, and it is only applicable to federal income taxes. After the megabill passed, the Social Security Administration sent out an email saying that the bill “ensures that nearly 90% of Social Security beneficiaries will no longer pay federal income taxes on their benefits, providing meaningful and immediate relief to seniors who have spent a lifetime contributing to our nation’s economy.” However, this is misleading, as experts say that the $6,000 tax deductible attributed to the 90% number only will benefit seniors in a certain threshold of income. According to the Urban-Brookings Tax Policy Center, that is less than half of seniors.
Trump also states that the bill increases the Child Tax Credit for more than 40 million families, which is a credit given to families with children who make no more than $200,000 per year. However, only certain families qualify, due to eligibility rules preventing families that earn very low incomes from gaining benefits. The spending bill also contains funding for America’s military, border patrol (ICE), and missile defense systems. Furthermore, the bill is also a major loss for green energy and a win for fossil fuels, eliminating government subsidies for green energy sources, which Trump deems “unreliable.” One new government provision created from the bill is “Trump Accounts,” which the White House describes as investment accounts for newborn children to give them a financial boost toward economic prosperity. Experts say that this method will not be as efficient as other ways of investing, as the money will be taxed when used for certain expenses. Lastly, a very controversial feature of the bill is cutting all funding from Medicaid for Planned Parenthood, as a way of attacking abortion and reproductive health care. This provision was declared unconstitutional and blocked temporarily by a federal judge.
Trump advertised the “One Big Beautiful Bill” as a major win for the working class and lower-income families, due to the amount of tax cuts. However, the tax cuts and other benefits provided by the bill have a lot of limitations, leading to them only being mainly beneficial for higher-income families. With the cuts to Medicaid and food assistance programs, experts analyze that lower-income families will be hurt, and reducing green energy support will set back US environmental and economic progress..
Major parts of the bill, such as the Medicaid cuts, will not be felt until after the midterm elections in 2026, which is likely an opportunity to minimize any damage the bill would have on the midterm elections.
Senior Nicholas Carpenter is the Opinions Editor. His email address is ncarpent@fandm.edu.