President Donald Trump’s “big beautiful” reconciliation bill is winding its way through the U.S. House of Representatives with a fate that is not at all certain. The bill contains massive cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP) program while renewing the president’s 2017 income tax cuts that predominantly favor the wealthiest Americans. The House budget committee passed the reconciliation package at an extraordinary late hour on a partisan vote. Four conservative congressmen who seek deeper cuts in the package voted present to allow the bill to move forward for additional debate.

Speaker of the House Mike Johnson has scheduled a very early morning meeting tomorrow for the House Rules Committee to take up the bill. Trump plans to meet tomorrow with the House Republican Caucus to twist whatever arms are necessary to ensure the passage of the bill. Meanwhile, some Senate Republicans like Ron Johnson of Wisconsin would like to see the bill broken up into two or three smaller bills. They believe this will make it easier to pass all of the main components of the bill.

Extend Trump’s 2017 Income Tax Cuts

One of the key provisions of the reconciliation bill would make permanent the 2017 Tax Cuts and Jobs Act, a bill passed during Trump’s first term that lowered taxes for all income brackets but disproportionately benefited the highest earners. The cuts are set to expire at the end of the year. If they are not extended, income tax rates will go up for all but two income brackets in 2025. The 95th to 99th percentiles of earners saw the largest improvement in after-tax income at 3.4% as a result of the 2017 cuts.

The Joint Committee on Taxation (JCT), the official revenue scorer for Congress, estimated that extending Trump’s tax cuts and other measures in the plan would add more than $5 trillion toward the nation’s deficits. The JCT also found that the package would reduce the deficit through cuts to renewable energy incentives and international tax enforcement. So that the overall tax piece would add $3.7 trillion to the deficit over the next decade. However, as the bill progresses through Congress, these energy tax incentives could shrink even further.

Severe Medicaid Cuts

Medicaid provides health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities. This program that provides health insurance to more than 71 million low-income Americans would undergo mass changes if the language in the bill is unchanged. House Republicans have proposed changes that would cut at least $625 billion from the program.

The nonpartisan Congressional Budget Office (CBO) estimates that 10 million Americans would lose their health insurance over the next 10 years. The bill would implement work requirements for adults enrolled in Medicaid expansion and increase the frequency of eligibility checks to ensure people still qualify for the program. These cuts are slated to begin in 2029, but as the Trump administration and the speaker’s office continue to look for package savings, there is some discussion that the cuts may begin as early as 2027.

Trump’s Snap Cuts

The legislation would pass on more of the cost for administering SNAP to state governments, potentially forcing local officials to decide whether to cut benefits or offset these additional expenses with cuts to other state and municipal programs. Twenty-eight states with higher rates of improper payments would be required to shoulder 25 percent of benefits costs in addition to 75 percent of administrative costs. Currently, states only pay half of the program’s overhead and do not contribute to benefits.

The CBO estimates that the Trump proposal would lead to a $30 billion cut in benefits for all SNAP participants in future years. The bill would allow states to outsource some core SNAP eligibility functions to private companies. Texas and Indiana experimented with privatization two decades ago, and it led to widespread problems such as incorrect benefit allotments and the inappropriate release of SNAP participants’ private information.

Final Thoughts

Democratic leaders vigorously oppose Republicans’ reform proposals for Medicaid and other welfare benefits. As House Minority Leader Hakeem Jeffries stated at a news conference last week.

“House Republicans have voted to take food out of the mouths of children, families, seniors, and veterans as part of their toxic scheme to enact massive tax cuts for their billionaire donors like Elon Musk. The one big, ugly bill will hurt the American people … . And if it falls—which it should, in the best interests of the American people—then we’ll actually have an opportunity to have a bipartisan conversation about what makes sense for everyday Americans.”