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The poorest 10% of households would lose an average of about $1,200 in resources per year, amounting to a 3.1% cut in their income, according to the analysis released Monday of the 'One Big Beautiful Bill Act.' Households in the highest 10% of incomes would see about a $13,600 boost in resources on average, amounting to a 2.7% increase in their incomes.
The hit to poorer families would largely result from the loss of benefits from social spending programs, while much of the benefit to the wealthy would come from tax benefits and cash transfers, according to the CBO.
The analysis clashes with messaging from the Trump administration that the signature legislation offers the largest tax cut in history for 'working- and middle-class Americans.' Trump and his allies have in recent weeks blasted independent agencies for releasing numbers with which the administration disagrees. The nonpartisan CBO, led by Phillip Swagel — who served in Republican President George W. Bush's administration — has repeatedly come under fire over its growth forecasts.
The tax and spending bill, enacted last month, includes much of Trump's economic agenda. It extends his 2017 income tax cuts while implementing a number of new and expanded breaks, including a higher cap on federal deductions for state and local taxes, an enhanced child tax credit and no taxes on tips and overtime pay. To offset some of the cost, the law includes a number of cuts for clean energy initiatives and social spending programs, including Medicaid and food stamps.
Deficit Impact
The CBO last month said the bill would add $3.4 trillion to US deficits over the next 10 years, not accounting for dynamic effects such as the potential growth impact.
Democrats and other critics have denounced the legislation as benefiting wealthier individuals at the cost of low-income families. The scaling back of the social safety net comes alongside an economic slowdown and weakening in the job market that would enhance the importance of those benefits.
Economists have warned price increases due to tariffs would disproportionately impact lower-income Americans who spend a larger share of their income on necessities, such as food.
Recent polls show a majority of voters disapprove of the tax law, with 55% of voters against it in a Quinnipiac University poll and 61% of voters in opposition in a CNN/SSRS poll.
The loss of resources for lower-income families will likely be delayed because Republicans wrote the law so that many of the cuts to social spending programs don't take effect until after the 2026 midterm elections, while the tax cuts will be noticeable early next year.
The law imposes new work requirements for able-bodied Medicaid recipients, limits states' ability to tax healthcare providers to help fund the program and creates new cost-sharing rules for beneficiaries who are covered under the Affordable Care Act expansion. CBO estimates that 10 million people could be left without health insurance by 2034 due to the law's changes to Medicaid.
The legislation also creates new work requirements for the Supplemental Nutrition Assistance Program, or food stamps, with exceptions for Alaska and Hawaii. The CBO estimates that those requirements would reduce participation in the program by about 2.4 million people in an average month over the next decade.
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The most popular stocks and funds investors bought in July
Stock markets pushed higher in July, fuelled by progress on tariff negotiations and strong earnings, boosting investor sentiment. In early July, US president Donald Trump announced a further extension onto the 90-day delay of Washington imposing higher tariffs, that were unveiled on "Liberation Day" on 2 April. This pushed back the date for implementing higher tariffs on a number of trading partners from 9 July to 1 August, a deadline that was later extended to 7 August. Tariff deals were announced with the likes of Vietnam, Japan and the European Union over the course of the month. However, Trump then announced additional higher levies on India and Brazil at the end of July, shortly before his 1 August deadline. Stocks: Create your watchlist and portfolio Meanwhile, the second-quarter earnings season got into swing in July, with Wall Street banks and major companies globally reporting results. In late July, the "Magnificent 7" drew much of the market attention, with six of this group of tech giants having reported by the end of the month. While the companies delivered earnings beats, market reaction to the results was mixed, as investor expectations remain high around their performance. As for economic developments, data released in July showed that inflation in the US and UK had risen, with continued concerns that Trump's tariffs could add further to pricing pressures. And despite repeated calls from Trump to lower interest rates, the US Federal Reserve held interest rates steady for the fifth meeting in a row at the end of July. But investors didn't appear too deterred by this mixed backdrop as major markets ticked higher in July, with the US S&P 500 (^GSPC) now up 8.4% year-to-date, while the UK's FTSE 100 (^FTSE) has gained 11.8% so far in 2025. Most popular stocks in July Despite a number of tariff updates, Dan Lane lead analyst at Robinhood UK, said that this "didn't stand in the way of a taste for AI, crypto and tech in general in July, with space for fresh blood amid some familiar popular stocks" on the trading platform. He said that the "rupture in the Magnificent 7 is starting to look more pronounced". "Case in point is Nvidia (NVDA) becoming the first public company to reach a $4tn (£2.96tn) market capitalisation in July," said Lane. "The emergence of DeepSeek unsettled the market early in 2025 but, with the best performers in the Magnificent 7 evidencing clear AI strategies and the relative laggards' plans still woolly, the taste for AI is back." With that in mind, here's which stocks and funds proved most popular with investors in July: Tesla (TSLA) Tesla (TSLA) featured on both the most popular stocks lists of Robinhood UK and Interactive Investor, despite continued weak performance. 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News that the US government u-turned on its curbs of sales of the company's AI chips to China offered a further boost to the stock last month, with shares now up nearly 36% year-to-date. However, it was reported on Monday that Nvidia (NVDA) and fellow chipmaker AMD (AMD) had agreed to give the US government 15% of their revenues from chip sales in China. Read more: Stocks that are trending today This deal is likely to be in focus for investors going into Nvidia's (NVDA) second-quarter earnings, which are due to be released on 27 August. Commenting on the news of the chipmakers' deal with the US government, Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Nvidia's (NVDA) Q1 revenue took at $2.5bn hit due to restrictions on H20 sales to China, but it clearly believes the 15% contribution is well worth it, to keep access to the vast and fast developing market. 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