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As the Republican budget bill, called the One Big Beautiful Bill Act, nears the July 4 deadline set by the White House, lawmakers have been ramping up the rhetoric.
Many items in the bill have garnered competing claims from Republicans and Democrats. We’ll lay out what we know about the sometimes disparate interpretations of the bill’s anticipated effects and explain the context around the issues.
- Republican Sen. Markwayne Mullin said “the average household of four is going to bring home pay over $10,000 more a year” because of the bill and President Donald Trump said it would be “at least $13,000.” Both appear to be high-end estimates based on optimistic projections for economic growth made by the White House’s own Council of Economic Advisers.
- Trump falsely claimed that under the bill “your Medicaid is left alone.” The bill reduces Medicaid spending by hundreds of billions of dollars and establishes new eligibility requirements, changes that are projected to cause millions to lose their health coverage.
- Meanwhile, Democratic Sen. Mark Warner exaggerated when he said “this bill will kick about 16 million Americans off of health care.” The Congressional Budget Office estimated that about 11.8 million people would become uninsured in 2034 because of the Senate’s bill.
- Democrats and independent analyses said the Senate bill will add at least $3.3 trillion to the federal deficit. The White House said the bill will reduce the deficit by $1.4 trillion. They differ over whether to count an extension of expiring tax cuts as new spending.
- Democrats call the bill “tax breaks for billionaires” while Republicans frame it as a tax cut for “working-and-middle class Americans.” Independent analyses indicate that on average, taxpayers in each income group would see some tax relief, though those with the highest incomes would derive the most benefit.
- Trump says if the bill passes there would be “no tax on Social Security.” Not exactly. Under the House and Senate versions of the plan, fewer seniors would pay taxes on Social Security benefits, but millions of Americans would still have to pay.
- Trump continues to claim that if the bill doesn’t pass, Americans will get a “whopping 68% Tax increase.” According to estimates released by the Joint Committee on Taxation, it would be closer to 10.7%.
- The White House claims the bill “unleashes clean, American-made energy, and will reduce the cost of living for Americans nationwide.” However, some analyses indicate it would increase household energy costs.
The bill narrowly passed the Senate on July 1 — with Vice President JD Vance casting the tie-breaking vote — and will now head back to the House for further debate.
Take-Home Pay
In a June 29 interview on NBC’s “Meet the Press,” Republican Sen. Markwayne Mullin said because of the bill “the average household of four is going to bring home pay over $10,000 more a year this year than they did last year.” Days prior, Trump, at a June 26 White House event, said the bill would immediately “increase take-home pay for the normal family of four by at least $13,000.”
But both men appear to be cherry-picking from the high end of an optimistic range of estimates made by the White House’s own Council of Economic Advisers.
In early May, the CEA calculated that under a version of the bill passed by the House Ways and Means committee, take-home pay for a typical family with two children would increase by between roughly $7,800 and about $13,300. Then in late June, when the CEA analyzed a Senate-proposed version of the bill, its estimate of the potential increase in take-home pay for that same-sized family shrunk to a range of between nearly $7,600 and $10,900.
Importantly, both ranges of CEA estimates were based on an assumption that real, or inflation-adjusted, gross domestic product would increase by more than 4% each year, at least for the first four years under the bills. But the nonpartisan Committee for a Responsible Federal Budget labeled those “fantasy growth assumptions” that “are many times higher” than the estimates of other independent analysts that have modeled versions of the bill. The CRFB said that modelers other than the CEA have projected economic growth in the range of 0.1% to 1.3% per year, producing less of an increase in take-home pay for families.
Medicaid Changes
Democrats and Republicans don’t agree on the impact that the bill would have on Medicaid, and both sides have misled the public about what’s predicted to happen if it became law.
At the White House on June 26, Trump claimed that under the bill, “your Medicaid is left alone. It’s left the same.” But as we’ve written, the program would change for millions of people because of provisions that significantly reduce future Medicaid spending and modify eligibility criteria for the program, including new work requirements for adults who gained coverage under a Medicaid expansion in the Affordable Care Act. The CBO estimated that Medicaid provisions in the House version of the bill would cause 7.8 million to lose their coverage in 2034, with the majority, 5.2 million, expected to lose Medicaid due to the work requirements.
For our previous story, health care experts told us that many beneficiaries would likely have problems submitting the required paperwork to prove their eligibility, leading to people being dropped from the Medicaid rolls. And, experts said, not all of the people losing coverage would be able-bodied adults refusing to work, as some Republicans have claimed.
Meanwhile, Democrats have exaggerated the number of people that the CBO has estimated would lose health insurance because of the bill. For example, Sen. Mark Warner, in a June 29 interview on CNN’s “State of the Union,” said, “this bill will kick about 16 million Americans off of health care,” a figure he attributed to “the independent referees, CBO and others.”
But the CBO said that the House version would result in 10.9 million more people becoming uninsured in 2034, including current Medicaid beneficiaries and people who now get their health insurance through the ACA marketplaces. And, more recently, the CBO estimated that the Senate version of the bill would lead to 11.8 million losing health insurance in 2034 – although there was no breakdown by the type of coverage lost. The higher figure cited by Warner and other Democrats includes millions of estimated losses under a separate matter — the scheduled expiration in 2025 of ACA premium tax credits that were last extended in 2022. What happens to those previously expanded tax credits is still up in the air, but their extension is not directly tied to the bill under consideration by Congress.
Calculating the Deficit Impact
Democratic Sen. Amy Klobuchar said the Senate bill will raise federal deficits by $4 trillion, while the White House said it will cut the deficit by $1.4 trillion. The clash over the deficit projections comes down to different interpretations of how the 2017 Tax Cuts and Jobs Act affects the bottom line.
The CBO has said the bill passed by the Senate will add at least $3.3 trillion to the national debt over the next 10 years, taking into account the extension of the 2017 tax cuts championed by Trump. The Committee for a Responsible Federal Budget estimated the Senate bill will increase the federal debt by more than $3.9 trillion through 2034.
“Congressional Republicans betrayed the American people, passing a bill that will raise our debt by $4 trillion,” Klobuchar said in a July 1 statement shortly after the bill’s passage in the Senate.
The Senate bill includes $4.5 trillion in tax cuts — extending the lower rates passed in 2017 and adding new tax cuts. But Senate Republicans have taken steps to remove consideration of the 2017 tax cuts in determining the bill’s impact on the deficit. Republican Sen. Bill Hagerty, who was presiding over the Senate in April, ruled that Sen. Lindsey Graham, the Senate Budget Committee chair, had the sole authority to decide whether extending the 2017 tax cuts officially adds to the deficit.
Graham and like-minded Senate Republicans have said that because the tax cuts have been in effect and are “current policy,” they are not new and do not add to future deficits.
A June 7 memo from the White House argued that Republicans in Congress would certainly extend the 2017 tax cuts and “an honest portrayal of current future deficits adjusts for the continuation” of the cuts. “On its own, the OBBB reduces the deficit by over $1.4 trillion. Net mandatory savings of $1.7 trillion are partly offset by increases in one-time spending to finally and fully secure the border to defend our Nation from invasion, and to lower taxes from policies such as no tax on tips or overtime that are partly offset with loophole closers in the tax code. The net deficit reduction totals $1.407 trillion,” the White House said.
Democratic Sen. Jeff Merkley, the ranking member of the Senate Budget Committee, objected to granting Graham the power to determine how to account for the existing tax cuts. “The ability of the chair to create a phony baseline has never been used in reconciliation, not ever,” Merkley said.
Senate Majority Leader Chuck Schumer, Merkley and Ron Wyden, ranking member of the Senate Finance Committee, sent a letter on March 31 to the Senate Republican leadership saying, “As Members of your conference advocate for the use of budget fraud – the so-called ‘current policy baseline’ – in an attempt to make a second round of Trump Tax giveaways look like it would cost $0, rather than the true $37 trillion over 30 years, we write today to remind you that employing this unprecedented gimmick would upend budget law, erode the remaining fiscal guardrails in the budget reconciliation process, and result in trillions of dollars more in federal debt.”
Taxpayers for Common Sense also criticized the Republican maneuver on assessing the bill’s impact on the deficit in a July 1 statement. “Reconciliation was supposed to be Congress’s tool for fiscal discipline. Instead, senators are using ‘current policy’ scoring — a fancy term for pretending that temporary tax cuts are permanent fixtures — to hide trillions in costs from the American people. It’s the legislative equivalent of cooking the books,” the nonpartisan watchdog group said.
Benefits for Billionaires or the Middle Class?
The difference in the rhetoric surrounding who would benefit from the bill’s tax cuts is stark: Democrats say the bill is a boon for billionaires; Republicans frame it as a tax cut for “working-and-middle class Americans.” Both sides are spinning the facts a bit.
Independent analyses indicate that a majority of taxpayers in each income category would see some tax relief, though those with the highest incomes would derive the most benefit.
In the lead-up to the Senate vote, Democrats claimed that cuts to safety net programs were made in service of tax breaks to the very wealthy.
“Why are they doing all this? We know why. Tax breaks for billionaires,” Senate Democratic Leader Chuck Schumer said from the Senate floor on June 28.
“This is just so Republicans can give a big tax cut to the wealthiest Americans,” Democratic Sen. Mark Kelly said on MSNBC on June 30.
Meanwhile, Republican Sen. Jim Banks on “Fox News Sunday” on June 29 called the bill “the biggest tax cut in American history for working class families.”
The White House also put out a release pushing back against the “myth” that the bill “takes from the poor to give to the rich.”
“Low-income workers stand to receive the largest percentage reduction in their tax liability,” the White House said. “One Big Beautiful Bill delivers the largest tax cut in history for working-and-middle class Americans.”
As we have written, on average, taxpayers in every income group would get some tax relief if the 2017 tax cuts are permanently extended. But not everyone. In all, about two-thirds to three-quarters of taxpayers would get a tax cut, according to independent analyses. Also, the cuts skew in favor of wealthy Americans, who would see more tax relief not only in the dollar amount, but as a percentage of income, on average.
(For clarity, people would experience an extension of the 2017 tax law not as a new tax cut, but as the absence of a tax increase if the provisions were allowed to expire.)
The Tax Foundation, for instance, concluded, based on the version of the bill passed by the Senate Finance Committee, and accounting for the economic growth expected to be spurred by the bill, that the percentage change in after-tax income increases — on average – as income rises. For example, in 2034, those in the bottom 20% of earners are expected to see a 0.5% increase in after-tax income. That percentage increases to 2.6% for the next 20% of earners. Those with incomes in the middle 20% — who earn between $38,572 and $73,905 — would see a 3.5% increase in after-tax income in 2034. The largest increase — 3.7% — would accrue to those in the top 20%, the Tax Foundation said.
Based on its analysis of the Senate Budget Committee version of the bill released on June 28, the Urban-Brookings Tax Policy Center wrote, “Average tax cuts are generally larger as a percentage of after-tax income for higher income households than for lower income households, and nearly 60 percent of the tax benefits would go to those in the top quintile (with incomes of about $217,000 or more).”
The Penn Wharton Budget Model looked at the effect of the Senate version of the bill on lifetime income, and factored in the effect of cuts to Medicaid and food assistance. Using a model that takes into account the expected economic growth from the plan, the PWBM found, “that households most affected by the cuts to Medicaid and SNAP — those in the bottom income quintile — experience the largest losses under this bill, averaging $27,500 in lifetime value for the working-age population. In contrast, working-age households in the top income quintile generally benefit from lower taxes, gaining an average of more than $65,000. Working-age households in the middle of the income distribution are largely unaffected, with an average lifetime gain of less than $500, as they face a chance of needing spending programs that have been reduced, but also benefit from some of the tax cuts.
“All future generations are projected to experience lifetime losses under the bill, ranging from $5,700 for high-income households to $22,000 for low-income households,” the PWBM found. “The losses for lower-income groups are primarily driven by a reduced social safety net and lower wages associated with a lower capital stock, while losses for top-income groups are entirely the result of lower wages.”
Taxes on Social Security Benefits
In a Fox News interview on June 29, Trump again claimed — as he has repeatedly — that if the bill passes there would be “no tax on Social Security.” Not exactly. Under the House and Senate versions of the plan, fewer seniors would pay taxes on Social Security benefits, but not everyone would be exempt.
The version of the bill passed by the Senate would add a $6,000 tax deduction for seniors age 65 and older ($12,000 for married seniors) beginning in 2025 and through 2028 — regardless of whether they receive Social Security benefits. (See Sec. 70103) The House version of the bill proposes a $4,000 deduction for seniors though 2028. (See Sec. 110103)
According to the White House’s Council of Economic Advisers, 64% of seniors aged 65 and over who receive Social Security income already receive exemptions and deductions that exceed their taxable Social Security income. So, already, most seniors do not pay taxes on their Social Security income.
Under the more generous Senate version of the bill, an additional 14.2 million would have exemptions and deductions exceeding their taxable Social Security income, so that, in effect, 88% of seniors would not pay any taxes on their Social Security income, according to CEA. The senior deduction would start to decline for individuals with incomes of more than $75,000 and couples with incomes of more than $150,000, and would disappear entirely for individuals making over $175,000.
So, the Senate version of the bill would dramatically reduce the number of seniors who pay taxes on Social Security benefits. But it wouldn’t eliminate taxes on Social Security entirely. According to the CEA’s own analysis, more than 7 million seniors with higher incomes would still pay taxes on Social Security benefits.
Trump’s Unfounded 68% Tax Increase Warning
Over the last week, the president has repeated an unfounded claim he’s been making since April — warning that if this bill doesn’t pass, there will be a “whopping 68% Tax increase.”
We’ve not been able to find any analysis of the bill that supports that claim, and the White House didn’t answer our question asking for an explanation of how it was calculated.
White House spokeswoman Abigail Jackson did, however, tell us that the talking point reflected the impact of not “ending taxes on tips, overtime, and Social Security,” as proposed in the bill. And Trump has said that it also includes the effect of not extending certain provisions from the 2017 Tax Cuts and Jobs Act that are set to expire this year.
Trump, June 27: Well, it comes from the fact that you have automatically the Trump cuts, which were the biggest cuts that we’ve ever had. Now, these cuts are even bigger. But from the last administration we had the Trump cuts. … And that alone is a big chunk of the 68%. And then you have the other taxes that would accumulate. And they say that you’d have about a 68% tax increase.
But those things don’t add up to a 68% tax increase.
“By far the largest part of the bill is extending the expiring tax cuts,” said Joseph Rosenberg, a senior fellow at the Urban Institute who researches federal tax issues at the Urban-Brookings Tax Policy Center.
As we’ve written before, the TPC has estimated that, on average, Americans’ taxes would rise about 7.5% if those 2017 tax cuts aren’t extended at the end of the year.
“Everything else is not going to close the gap,” he said, referring to adding in the proposed changes in taxes on tips, overtime and Social Security to reach a 68% rise in taxes.
Rosenberg pointed to estimates released by the Joint Committee on Taxation on July 1, showing that the total change in new tax-cut provisions in the bill approved by the Senate is 3.5% and the total including the extension of the 2017 tax cuts is 10.7%, which is a far cry from the 68% claimed by Trump.
Energy Costs
A June 29 White House release claimed that the bill “unleashes clean, American-made energy, and will reduce the cost of living for Americans nationwide.” However, some analyses indicate it would increase household energy costs.
The bill quickly phases out tax credits for wind and solar power projects and electric vehicles enacted under the Inflation Reduction Act, President Joe Biden’s signature climate law, and imposes materials sourcing requirements for clean energy projects. The bill keeps longer-term tax credits for some types of zero-emissions energy projects, such as geothermal, nuclear and hydropower, while expanding oil drilling leases, among other energy-related provisions.
A new analysis by Energy Innovation, a nonpartisan think tank focused on energy and climate policy, found that the bill would result in $170 in additional annual energy costs per household in 2035, on average, compared with the alternate scenario where energy policy remained the same.
“Our modeling found that any decrease in fossil fuel prices from increased fossil fuel production is way more than offset by higher electricity costs with the net costs of energy to households and businesses rising dramatically,” Robbie Orvis, senior director of modeling and analysis at Energy Innovation, told us in an email.
A different analysis from the REPEAT Project, led by Princeton University energy systems engineer Jesse Jenkins, projects that the current Senate bill would increase average annual household energy costs by $284 per household by 2035.
Jenkins told us in an email that analyses show the bill “will reduce investment in new clean American energy sources, particularly wind and solar power (the most important and fastest growing sources of clean energy in America) and increase electricity prices and household energy costs.”
When asked for an analysis or other evidence that the bill would reduce costs for Americans, the White House pointed to gasoline prices that are expected to hit four-year lows for the Fourth of July holiday.
“Since taking office, President Trump has unleashed an American energy revolution that has driven down costs – with gas prices currently the lowest they’ve been since 2021 – and brought jobs back to the United States,” Abigail Jackson, a White House spokesperson, told us in an email. “President Trump’s One, Big, Beautiful Bill will supercharge that growth and continue to lower costs for all Americans.”
Other backers of the policy, including conservative-aligned energy nonprofits, have argued the clean energy incentives are unnecessary expenditures with the potential to harm the electrical grid.
“We got to pass the One Big Beautiful Bill so we can stop wasting money on unreliable, intermittent energy,” Energy Secretary Chris Wright said in a video posted to X on June 26, adding that the bill will lower costs by removing “the barriers and shackles that are on the core sources of energy.”
The U.S. is already at record-level energy production. According to the U.S. Energy Information Administration, the U.S. produced more energy than ever before in 2024, with natural gas accounting for 38% of total production and crude oil for 27%.
Experts previously told us that while increasing production of fossil fuels could lower prices somewhat temporarily, it is unlikely to move the needle much long-term. Oil is a global commodity, and companies will pull back on production if the price of oil falls too low. And producing natural gas for export could raise prices for Americans.
Earlier in June, Trump posted on his social media platform Truth Social that he did not want any tax credits for clean energy, calling them “largely a giant SCAM.” He also said wind power is the “most expensive and inefficient energy in the world.” But as we’ve written, that’s not true.
As for the notion that the bill will still support energy that is “clean,” burning fossil fuels in the U.S. is often cleaner than doing so elsewhere in the world. But swapping out renewables such as wind and solar for fossil fuels in the U.S. will result in more heat-trapping carbon emissions and other pollutants harmful for the environment and human health.
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