Budget office says GOP's ‘big beautiful bill' will make rich richer, poor poorer

The Hill

2 days ago

The Republicans' 'big, beautiful bill' will make the poorest Americans even poorer, while padding the wallets of the highest earners the most, according to a new analysis released Monday by Congress's budget arm.
The assessment, conducted by the Congressional Budget Office at the request of top Democrats, found that the top 10 percent of earners in the country will see an average boost of $13,600 per year over the next decade as a direct result of provisions in the law, while the bottom 10 percent will see an average annual decrease of $1,200.
The report challenges the arguments made by President Trump and other Republicans that the massive domestic policy package would benefit workers at all levels of wealth and income. And it's given fuel to the attacks from Democrats that the legislation was, all along, designed to help the wealthiest people at the expense of the working poor.
'They just confirmed Trump is enriching his billionaire friends at the expense of American families,' Rep. Brendan Boyle (D-Pa.), the senior Democrat on the House Budget Committee, posted Monday on X after the CBO report was released.
'It is the largest transfer of wealth from working Americans to the ultra-rich in history.'
Enacted last month, the 'big, beautiful bill' was a compilation of virtually all of the major domestic policy items Trump had promised on his way to a presidential victory in November. It features an extension of the sweeping tax cuts Republicans had adopted in 2017, during Trump's first term, which were slated to expire at the end of the year, and provides a big boost in spending for border security, the military and domestic energy production.
A portion of those new federal costs were offset by steep cuts in federal programs, including Medicaid and the Supplemental Nutrition Assistance Program (SNAP), previously known as food stamps, which benefit lower-income people. The law also puts new limits on ObamaCare subsidies and adopts new caps on federal student loans, which also affect lower-income people disproportionately.
The CBO's analysis aims to gauge the cumulative effect of the various components of the law, as applied to households at differing income levels.
Most workers will benefit from the law to some degree, largely due to the extension of the 2017 tax cuts, CBO found. High earners benefit the most — $13,600 for the top 10 percent, $3,200 for the next 10 percent below them — because they make the most money and tend not to receive benefits from the federal programs set to be cut.
The 20 percent of workers in the middle of the income spectrum will also see a bump: between $800 and $1,200 per year over the next decade, CBO estimated.
The lowest earners, however, will see a reduction in overall resources under the new law, largely because the cuts in federal programs like Medicaid and SNAP will eclipse any benefits, including the tax cuts, elsewhere in the bill. That negative trend is expected to hit those in the bottom 20 percent of earners, CBO said, resulting in a $1,200 reduction for the lowest 10 percent of incomes, and a $400 reduction for the 10 percent directly above them.
Republicans have dismissed the CBO's projections in the past, arguing that they fail to take into account the broad economic boost provided by the tax cuts — a 'dynamic' benefit the Republicans say benefits people of all income levels.