The House passed the “One Big Beautiful Bill Act” (HR 1) that uses the budget reconciliation process to bypass Democratic opposition and now the Senate is crafting their version. The measure would make permanent lower tax rates from the 2017 tax law (PL 115-97) that expires at the end of the year and would add new tax breaks for seniors and wages from tips and overtime. It would provide billions of dollars for border security and defense and boost key commodity support programs under the farm bill, which also expire at the end of the year.

The cost of those policies would be partially offset by limiting eligibility and federal funding for Medicaid and food assistance benefits, modifying student loan repayments, rolling back clean energy tax credits from Democrats’ 2022 tax and climate law (PL 117-169) and imposing new immigration fees.

Specifically, it would cut food assistance and healthcare programs, leading to roughly 7.6 million people losing Medicaid, according to estimates from the nonpartisan Congressional Budget Office. Currently, Medicaid covers almost 80 million Americans along with its sister program for children, the Children’s Health Insurance Program. Moreover, the cuts to Medicaid would average over $70 billion per year over 10 years, which is the same amount millionaires and billionaires would gain in tax cuts each year if the House budget is enacted.

ONE BIG BEAUTIFUL BILL ACT SUMMARY:

• Increase the debt limit by $4 trillion.
• Provide funding to boost national security procurement, support border and immigration enforcement, and improve air traffic control technology.
• Temporarily increase the child tax credit and permanently hike employer-provided child care credits.
• Expedite permitting for certain energy projects and mandate new lease sales of federal land for oil and gas drilling.
• Impose new annual fees on electric and hybrid vehicle owners.
• Rein in pharmacy benefit manager practices in Medicare and Medicaid and expand uses of health savings accounts.
• Reduce funding for the Consumer Financial Protection Bureau and other financial agencies.

The Congressional Budget Office and Joint Committee on Taxation estimated that the measure’s provisions under the Ways & Means Committee would increase the deficit by a net $3.8 trillion from fiscal years 2025 through 2034. The budget resolution directed that committee to increase the deficit by no more than $4.5 trillion over 10 years, though a separate provision would reduce that amount if the rest of the bill doesn’t produce at least $2 trillion in savings. That estimate didn’t include changes made by the House Rules Committee afterward to try to appease conservative and moderate holdouts on the bill. For the Senate, the budget resolution included different instructions for Senate committees, including allowing for larger tax cuts and a $5 trillion debt limit increase.

The health and human service programs would take the biggest hit in this bill.