On May 22, the House of Representatives passed the One Big Beautiful Bill, otherwise known as the Budget Reconciliation Act, with a vote of 215 to 214 with 1 “present” vote. The heart of the 1,000+ page bill focuses on extending the tax breaks in President Donald Trump’s 2017 tax bill that are due to expire this year, while adding additional ones promised during the campaign. The Congressional Budget Office estimates that this bill will raise the national debt by $2.3 trillion; others estimate it will be closer to $3.1 trillion. This caused Moody’s to downgrade the U.S. credit rating from Aaa to Aa1, which could lead to higher rates when borrowing money.
There are some pluses to the bill. It streamlines the tax code by providing a $15,000 standard deduction, a 20% Qualified Business Income deduction and a child tax credit, which was increased by $500 making it $2,500 through 2028, but reducing the amount to $2,000 thereafter. In addition, a number of short term tax cuts including no tax on tips or overtime, and a $4,000 increase in the standard deduction for seniors all expire after 2028.
Representatives from large states like California and New York with high property taxes successfully pushed through a higher deduction for state and local taxes of up to $40,000. Significant additional expenditures were added for illegal immigrant deportations, to build the border wall, and Trump’s “golden dome” defense system.
In an effort to “find” funds to pay for the tax breaks and additional projects included in the bill, the drafters are proposing significant cuts to Medicaid and the Supplemental Nutrition Assistance Program, SNAP, that provides food programs for no- and low-income individuals – all done under the guise of rooting out “waste and fraud.”
New Medicaid requirements have been included in the bill that will cost more to implement than the money that may be saved and will result in many being pushed out of Medicaid, leaving them without health insurance.
In a cascading effect, rural hospitals and health care providers who depend on revenues from Medicaid will be forced to reduce services and possibility lay off staff which impacts the entire community. Experts estimate that a number of rural hospitals will close if this bill passes with the Medicaid cuts being proposed.
An analysis of the One Big Beautiful Bill reveals that higher-income taxpayers will benefit significantly more than lower-income Americans – 60% of the tax cuts will go to those making at least $217,000 per year. Those in the middle income bracket would receive $840, and those in the lowest income bracket, would actually lose income – in addition to possibly losing their health care and food assistance.
The bill now goes to the Senate where it will again be carefully scrutinized and most certainly changed, as a number of senators are concerned that not enough cuts were made, while others are concerned about the cuts in Medicaid.
Looming over both houses is the increasing U.S. debt. It is unreasonable to continue to add expensive programs with no tax provisions to pay for them, and while many recognize the need to make some tweaks to Medicare and Social Security – such as increasing the retirement age or increases in payroll taxes for those making hefty salaries – there is an unwillingness to approach these adjustments from a nonpartisan perspective to ensure both Medicare and Social Security are here for our children.
Karen Sheek of Cortez is the chair of the Montezuma County League of Women Voters. She served two terms on Cortez City Council and two terms as mayor. Contact the local league at lwvmzc@gmail.com, on Facebook at https://bit.ly/3YgpBZt or in person at the League’s Flag Day celebration, June 14, at the National Welcome Center at 10 a.m. and a presentation by Joe Theine, CEO, Southwest Memorial Hospital, June 28, at the Dolores Public Library at 10:15 a.m.
