Trump's "Big Beautiful" Law is a Stain on the Nation's Future
We learned nothing from the 2017 tax cuts
On Friday, July 4th, President Trump signed into law a massive tax and spending cut bill, known as the "One Big Beautiful Bill Act." The law would extend and expand tax cut provisions from the 2017 Tax Cuts and Jobs Act (TCJA), introduce new temporary tax provisions, roll back clean energy tax credits, and deeply cut Medicaid and food assistance provided by SNAP. Projected to increase deficits by $3.4 trillion over 2025-2034, the law represents a reckless windfall for wealthy Americans at our collective expense.
Who will be affected?
“It’s the biggest bill of its type in history,” boasted Trump. “It includes the largest tax cut in American history, the largest spending cut, $1.7 trillion. And yet you won’t even notice it.”
It’s true that many Americans won’t even notice the effects of the law. However, it’s not because the spending cuts won’t hurt, it’s because the bulk of the law’s costs stem from preserving existing tax cuts under TCJA. The estimated cost of extending or restoring measures from TCJA alone is $4.3 trillion. Thus, for many taxpayers, the law’s impacts will be negligible as it continues existing policies.
In contrast, the law will be felt by the millions of people who stand to lose health insurance and food assistance. About 17 million people would lose health coverage and become uninsured by 2034 because of the deep Medicaid and ACA marketplace cuts. Over 2 million people are expected to lose vital food assistance from SNAP due to onerous work requirements. For those who remain on SNAP, they will receive less assistance, making it harder than it already is to afford a healthy diet.
Altogether, Trump’s tax and spending law continues to provide generous tax cuts, mainly to wealthy individuals and corporations, while harming the livelihoods of millions of working and vulnerable people. Per the Penn-Wharton model, “By 2033, households in the lowest quintile would see a loss of $1,300 on average. The typical household in the lowest quintile would experience a total income loss of 6.4 percent.” Meanwhile, households in the top quintile would enjoy an average gain of $2,865. The richest 0.1% of households would enjoy an average staggering gain of $83,095.
Figure: Distributional impacts of the tax and spending law, by quintile
Ignored lessons from the 2017 tax cuts
Back in 2017, when Congress was debating TCJA under Trump’s first term, similar alarms were rung about how costly and regressive it was. At the time, I was an Research Assistant at the Center on Budget and Policy Priorities, analyzing each iteration of the tax bill obsessively. The bill was expected to lavish wealthy households and corporations at the expense of low and middle-income people, and add $1.5 trillion over 10 years to the deficit — an amount that felt massive then yet now seems modest by comparison.
Republicans had wishfully claimed that the tax cuts would pay for themselves by fueling economic growth, which has proven to be a fantasy. After TCJA passed, I cautiously hoped we would learn from this mistake when the cuts eventually lapsed due to the limitations of the reconciliation process. (In short, reconciliation bills may not increase deficits or reduce surpluses beyond a 10-year period.)
Clearly, we learned nothing. In April 2025, during the early stages of the tax and spending bill, the CBO projected that extending TCJA would increase the national debt by $37 trillion over thirty years and shrink the economy by 1.8 percent by 2054. Republicans again tried to deny the CBO’s estimates and mislead the public, claiming the bill’s true costs are negligible, if not positive, when accounting for economic impacts.
Republicans have essentially taken a bad policy and supercharged it, making it even more regressive and costly. Trump and other proponents have touted the law’s “populist” measures, like the exemption on tips. However, much of these will expire in a few years due to reconciliation rules and hardly dent the overall impacts of the bill. The tips exemption, for instance, would only benefit about 2% of workers, and they may on net be worse off when considering the Medicaid and SNAP cuts.
A Bleak Fiscal Future
As a result of the bill’s deficit increases, the U.S. is further compromising its future.
Currently, the national debt is close to 100% of GDP. Our government spends about 13 percent of the budget ($880 billion) on debt interest payments. Our debt payments are the third most expensive item on the budget, followed by Social Security and Medicare. Under current policy (i.e. excluding the new tax and spending law), debt is projected to reach 117% of GDP and interest payments would consume 16% of the budget (1.7 trillion).
However, under the new law, the national debt would climb to 127% of GDP by 2034 and interest payments would near $2 trillion. If the provisions of the law were made permanent, the debt would be 130%. (As was the case with TCJA, many provisions will expire because of reconciliation rules unless extended).
To be clear, I am not worrying about the U.S. government’s ability to pay its debt like other alarmists. However, I do worry about how our debt is increasingly crowding out our ability to pay for the nation’s future needs and priorities. Our fiscal outlook was already bleak, and now it’s even worse, all for skewed, counterproductive tax cuts.
From an international perspective, the U.S.’s decision is confounding. Countries are under more pressure than ever to increase revenues to finance investments in social welfare, economic development, and climate action. At the same time that Congress debated the bill, over 70 governments — excluding the U.S. — were in Seville for the Fourth International Conference on Financing for Development to align on financing the global Sustainable Development Goals agenda.
By dramatically cutting revenues and scaling back the safety net, the U.S. betrays its public’s welfare and sets a poor global example.