Trump's Big Beautiful Bill Will Harm Those At The Bottom

Forbes

8 hours ago

Post written by Dr Sandra Portocarrero , Assistant Professor of Management at the London School of Economics, and Christian Flores, a former special adviser at the White House Council of Economic Advisers in the Biden Administration and Economist at the National Domestic Workers Alliance.
WASHINGTON, DC - MAY 22: U.S. Speaker of the House Mike Johnson (R-LA) speaks to the media after the ... More House narrowly passed a bill forwarding President Donald Trump's agenda at the U.S. Capitol on May 22, 2025 in Washington, DC. The tax and spending legislation, in what has been called the "One, Big, Beautiful Bill" Act, redirects money to the military and border security and includes cuts to Medicaid, education and other domestic programs. Johnson was flanked by House Committee Chairmen who helped craft the legislation. (Photo by) Getty Images
Trump's "Big Beautiful Bill" is a sweeping legislative package that aims to cut taxes and increase spending on energy, defense, and Immigration and Customs Enforcement (ICE) while also slashing Medicaid and food assistance programs.
This bill, which is being pushed through budget reconciliation —a special legislative process intended to help lawmakers make tax and spending changes with only 51 votes—has noteworthy implications for the U.S. economy and its citizens, especially those at the lower end of the economic spectrum.
While the macroeconomic effects, such as adding to the deficit and debt , are concerning, the bill's impact on inequality is even more troubling, with analysis suggesting it may be the most regressive law in decades.
The primary purpose of Trump's bill is to extend the expiring conditions of the 2017 Tax Cuts and Jobs Act (TCJA) at a cost of $2.2 trillion . As was the case with the initial introduction of this Act, the extension of the TCJA primarily benefits the wealthiest individuals, with the top 1 percent of earners receiving tax cuts of $64,000 to nearly $90,000. In comparison, those in the bottom 20 percent would see just $90 of benefits. This disproportionate weighting in favor of the richest Americans could see the widening of the already insurmountable wealth gap .
Furthermore, despite the extraordinary cost, previous analyses of the original TCJA indicated that it did not meaningfully boost the economy or pay for itself as initially claimed . Indeed, the non-partisan Congressional Research Service stated that "the literature as a whole does not provide support for significant effects of the Tax Cuts and Jobs Act on the economy."
What we see in the TCJA extension, then, may represent a costly gift in the form of tax cuts to the wealthiest, but without delivering an equivalent benefit to the lowest earners or even any substantial economic growth.
A casualty of the Big Beautiful Bill will be Medicaid, a crucial program that provides healthcare to low-income individuals, and is the U.S.'s single largest provider of healthcare.
The proposed cuts to Medicaid amount to over $800 billion , making it the most significant contraction in history . This reduction would lead to an enormous increase in the number of uninsured Americans ; Medicaid cuts, Affordable Care Act cuts, and the expiration of insurance premium tax credits will result in an estimated 16 million people losing their coverage. Research suggests that over the next decade, lower Medicaid enrollment could lead to anywhere between 140,000 to 290,000 preventable deaths .
Moreover, Medicaid cuts could directly undermine the wider care system. Jaqueline Lamar is a care worker who relies on Medicaid funding not only for her and her family's healthcare needs, but also for her salary. As a stroke victim, Jaqueline experienced first-hand how thinly stretched healthcare can leave Americans out in the cold.
Additionally, work requirements for Medicaid recipients are ineffective in increasing labor force participation , and most recipients are already employed . Cuts to Medicaid would also negatively impact demographics and fertility, as 41 percent of births are funded by Medicaid , with over half of those births from Black and Hispanic mothers who already face higher maternal mortality rates .
These cuts specifically impact those at the bottom by either pulling the rug out from under those who rely on Medicaid coverage or exacerbating the negative impacts on already marginalized communities. Increased Immigration Enforcement
Finally, the bill allocates $140 billion to immigration and border law enforcement. This includes the construction of a border wall and additional funding for ICE. In total, the Cato Institute finds that the bill's increased spending for these provisions dwarfs all other law enforcement expenditures.
Observers would have found it hard to miss the Trump Administration's recent foray into immigration enforcement in Los Angeles and the subsequent fallout. Still, beyond the high-profile raids and protests, the broader impact of immigration enforcement might be harder to ignore.
Mass deportations, the kind Trump aims for, could cost the U.S. economy $1 trillion . This is because, despite assertions to the contrary, research, such as Dr Sandra Portocarrero's work on undocumented entrepreneurs in California , has shown that immigrants contribute positively to the economy. For example, the non-partisan Congressional Budget Office estimates that, over 10 years, the recent undocumented immigration surge could reduce the federal deficit by nearly $900 billion .
In addition, mass deportations would lead to labor shortages in key sectors and a loss of tax revenue. Excessive immigration enforcement, as a result of the bill, would rob low-income areas of growth and available public spending.
The distributional effects of the "Big Beautiful Bill" are clear: it is a giveaway to the wealthiest Americans at the expense of the poor and working class. Contrary to the administration's claims , the bill does not promote large economic growth . Instead, it continues a pattern of erratic policies that disproportionately harm the most vulnerable, such as tariffs and cuts to foreign aid .
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