One Big Beautiful Bill, One Giant Step Backward

armantabesh
Jun 29, 2025
4 min read

The 940 page“One Big Beautiful Bill” has arrived dressed in populist flair and patriotic polish, marketed as a sweeping rescue plan for all working Americans. With promises like “no tax on tips,” boosted child tax credits, and incentives to “buy American,” it’s being sold as a working-class Godsend. Donald Trump hails it as a “home run,” and Republicans point to its middle-class perks as proof of the bill's credentials.

See how much will you save or lose with Trump’s ‘ bill?

For every shiny tax benefit in the bill’s opening pages, there is a deeper cost buried within around Medicaid the millions of low-income Americans who rely on it for care. The bill is estimated to cost more than $3.3 trillion over a decade.

First, let’s look at the benefits being promised that mask what’s at stake.

The Selling Points:

No Tax on Tips and Overtime: Trump upheld his campaign promise to eliminate taxes on tips and overtime earnings. Senate Republicans propose these benefits for individuals making less than $150,000 of income ($300,000 for joint filers).

Social Security Tax Breaks: The bill also provides a maximum $6,000 tax break for retirees’ social security income. Again, there’s a phase-out for higher-income earners.

Child Tax Credit: The House bill increases the credit to $2,500 (up from $2,000), while the Senate version takes a permanent, modest increase to $2,200 with fewer eligibility restrictions.

SALT Deduction Relief: To appease suburban congresspeople, the bill increases the state and local tax (SALT) deduction cap from $10,000 to $40,000 for two years for families making up to $500,000. The SALT deduction lets taxpayers deduct the amount they paid in state and local taxes (like income or property taxes) from their federal taxable income.

Made-in-America Car Incentives: Trump is proposing new tax breaks for the interest you pay on your car loan but only for cars manufactured in the United States. It's a way to encourage people to buy American-made cars and support domestic manufacturing.

But this policy banquet has an enormous price tag: the Congressional Budget Office (CBO) puts the cost of the bill at more than $3.3 trillion added to the national debt over a decade. And that doesn't even include the health consequences.

Medicaid in the Crosshairs

To pay for these tax reductions, Republicans are relying on spending cuts. The biggest target is Medicaid, a safety net for more than 80 million low-income Americans.

Mandatory Work Requirements: Beginning in December 2026, healthy childless adults must work or volunteer at least 80 hours a month to be eligible. The Senate version boosts that to low-income parents of kids aged 15 and above. This is the toughest national requirement ever presented - albeit probably a fair one.

Semi-Annual Re-Enrollment:

Unlike the current yearly renewals, Medicaid recipients will need to reverify income and address every six months, bureaucratic paperwork that can unwittingly disenroll thousands.

Provider Tax Restrictions:

Some states get money for Medicaid by taxing its own hospitals to get free federal matching dollars, then paying the hospitals back (and more). But now the federal rules have reduced that tax cap from 6% to 3.5%. So, states get less federal help, hospitals lose income, and there isn’t as much money for Medicaid.

$25 Billion Rural Fund

To fend off criticism by rural-state Republicans like Senators Susan Collins, Josh Hawley, and Thom Tillis, Senate leaders added a rural hospital rescue fund. Critics call it a Band-Aid on a bullet wound.

What These Changes Mean

Tens of millions of Americans are going to lose coverage. The CBO predicts 11.8 million more people will be without coverage by 2034 if this bill is enacted.

Furthermore, restricting provider tax options takes away from states' autonomy, requiring budgetary concessions or higher taxes elsewhere. Rural and underserved community hospitals, already running on tight margins, could be forced out of business. This would create ‘care deserts’ where there once weren't.

Republican Civil War: Why Thom Tillis and Others Said "No"

Senator Thom Tillis (R–NC), an ardent Trump ally, surprised his party by opposing consideration of the bill on the floor, citing the reductions in Medicaid as "too extreme" for his state.

North Carolina recently expanded Medicaid under the Affordable Care Act, adding coverage for over 600,000 citizens. Tillis, and some of his colleagues in other similarly affected states, warned that closing funding streams and restricting eligibility would undo that gain overnight.

Senators Lisa Murkowski (AK), Susan Collins (ME), and even Josh Hawley (MO) have all shared the same concerns, although all these three voted in favor of moving the bill forward.

Aside from Tillis, Senator Rand Paul (KY) was the only other Republican bold enough to oppose the bill.

Trump, not surprisingly, has not handled this well. Speaking at a recent rally, he promised to campaign against Republicans who "betray the people by stopping this magnificent thing." Tillis, however, has announced that he won't seek re-election.

The stakes of this bill cannot be overstated. Medicaid is the cornerstone of American public health.

It pays for: