Trump’s Big Beautiful Bill Will Deepen Inequality
Donald Trump’s Big Beautiful Bill is an ugly policy that will punish the poorest, worsen inequality, and blow up the national debt.
President Donald Trump, joined by Republican lawmakers, signs the One Big Beautiful Bill Act into law during an Independence Day military family picnic on the South Lawn of the White House on July 4, 2025, in Washington, DC. (Samuel Corum / Getty Images)
Fiscal policy may sound like the last word in dullness, but as the German sociologist Rudolf Goldscheid wrote in 1917, “The budget is the skeleton of the state stripped of all misleading ideologies.” The One Big Beautiful Bill Act (OBBBA), transformed from a concept straight out of the mind of Donald Trump into legislation passed by Congress on July 3 and signed into law the day after, is a study of just how powerfully ugly a piece of fiscal legislation can be. The “misleading ideology” that’s been stripped away is the pretense of Trump’s GOP to be a working-class party; it is more of a plutocrats’ party than ever.
OBBBA is undeniably big, clocking in at almost 135,000 words, which would work out to about 500 standard book pages. Beautiful it’s not. It makes the 2017 tax cuts, skewed to the very rich, which were slated to expire at the end of 2025, permanent; slashes Medicaid, food stamps (SNAP), and other social programs; and massively ramps up the Immigration and Customs Enforcement (ICE) deportation machine.
A few details: There are the famous tax cuts Trump offered on the spur of the moment — no taxes on tips or overtime, nice for the beneficiaries but gimmicky and only of narrow application. It’s full of corporate goodies, like largely exempting domestic oil and gas drillers from corporate taxes, making private jets fully tax deductible in their year of purchase, and extending a nice tax break for Alaskan whaling captains (which helped buy Sen. Lisa Murkowski’s vote). It lifted a tax on gun silencers (which the National Rifle Association celebrated as a victory in the fight against financial discrimination). It expands school vouchers, key to the right-wing agenda of undermining public education.
There are egregious cruelties in it as well: A $100 fee for asylum seekers, not a demographic known for deep cash reserves, though that’s down from $1,000 in the original House version. A new $5,000 fee for migrants nabbed after entry. An end to a tax exemption for employees reimbursed for expenses incurred in bicycling to work — no room for that sort of thing in the MAGA worldview. And student loans will be capped at levels well below the usual cost of graduate and professional schools.
The deportation machine is being funded with a firehose. In an interview with Jacobin, Aaron Reichlin-Melnick estimates that ICE’s budget will triple to $27 billion a year through 2029. That’s slightly less than Canada’s current military spending and slightly more than Spain’s, which rank sixteen and seventeen on Stockholm International Peace Research Institute’s database of global arms expenditures. That’s a lot of money to spend in a short time, but ICE can probably do it, not least by contracting generously with private prison giants like CoreCivic and the GEO Group, both major contributors to Republicans and right-wing interest groups.
There’s also a nationwide shortage of cops; ICE will either have to launch a bidding war or lower its standards, which already seem none too high. Possibilities for what right-wingers like to call “waste, fraud, and abuse” look very promising. But OBBBA will also fund campaigns like ICE’s recent show of armored strength in Los Angeles, which looked like a rehearsal for an invasion.
Because of Trump’s iron control of the GOP, few of the normal legislative niceties were involved in the passage of the OBBBA — hearings, committee deliberations, and expert analysis. One can overly romanticize the old ways of doing things, given the influence of money and lobbyists over previously normal congressional proceedings, but at least they gave a polite nod to democratic procedure. Not this time. As is increasingly the case, Congress largely behaved as the rubber stamp for the executive’s will.
This is all rich material for political theorists, who’ve spent decades musing over the relative power of capitalists and the state. Fortune 500 CEOs and mainline Wall Street weren’t screaming for the OBBBA package. Normally powerful interests, like hospitals (whose finances will be decimated by the Medicaid cuts) and pharmaceuticals (whose research budgets were massively subsidized by federal research of the sort Trump has cut nearly in half), are harmed by it. In this case, the interests of those powerful sectors are at least partly aligned with those of the public, which wants functioning emergency rooms and fresh treatments for mortal diseases. But nary a peep from them, at least in public.
Economic and Distributional Effects
Analyses of OBBBA’s economic and distributional effects were mostly performed on earlier versions. As I’m writing this, they haven’t been updated to incorporate last-minute changes in the final text. But they’re close enough to the final to be worth reviewing.
Two things are certain: OBBBA will expand the budget deficit enormously and most of the economic benefits will go to the rich. The middle will see little, if any benefit, and poorer households will lose.
Working with the version passed by the Senate on July 1, the Congressional Budget Office (CBO) estimates that it will add $3.4 trillion to the deficit over the next decade. In an analysis of an earlier, less extravagant version of the bill, the CBO estimated it would add $441 billion to the government’s interest payments, now running at over $1 trillion a year and on the CBO’s latest pre-OBBBA projections already slated to rise to $1.8 trillion in 2035. Debt, which had been projected to rise from about 100 percent of GDP now to 120 percent in 2035, would probably move close to 130 percent in ten years thanks to OBBBA. The Yale Budget Lab comes up with broadly similar numbers and estimates that it will increase interest costs on federal debt by around $600 billion.
OBBBA will make our already unequal society more so. The Yale analysts estimate that the poorest fifth of households will lose 2.5 percent of their income, or $600 at current levels, while the richest fifth will gain 2.4 percent, or $6,495. The top 0.1 percent, with incomes over $3 million, will gain $97,260. Again, these figures are based on earlier versions of the bill, but they’re not all that far off from the final version.
Not only will the Act increase the income gap between rich and poor, but it will also increase inequities among people at roughly the same place in the income distribution. As the Yale Budget Lab put it, “Most notably, the ‘no tax on . . .’ provisions create new tax breaks for tipped workers, overtime pay recipients, car loan borrowers, and seniors — making tax liability a function of employment characteristics, borrowing decisions, and age.”
Most of the losses to those at the bottom of the income distribution will come from cuts to Medicaid and SNAP; they pay little if any federal income tax, so tax cuts are meaningless to them. The CBO estimates that sixteen million more people will be without health insurance in 2034 than would be were current policies to remain in effect, a mix of direct Medicaid cuts and the expiration of tax credits under Obamacare. These cuts will not only drive millions into the ranks of the uninsured — they’ll savage the finances of hospitals and other health care providers, especially in rural Trump strongholds. These cuts will sicken and kill lots of people.
The Debt Threat
No doubt some readers are asking why the Left should care about deficits and debt. There are a couple of reasons. One is the growing share of interest payments in federal spending. Now they’re more than what we spend on the military and not much less than what we’re spending on Medicare. It’s half as high as Medicaid spending. It’s more than twice federal spending on “income security,” which includes food stamps, the earned income tax credit, child nutrition, and unemployment insurance — programs that face cuts under the OBBBA. Instead of taxing rich people, we borrow money from them and pay them interest for the privilege. We desperately need to tax those who can afford it more.
Another worry is having to borrow gobs of money in the bond market. The United States, issuer of the world currency, has historically had no problem doing that. But as I argued in Jacobin in May, that status might not last forever, thanks to growing debt, reckless governance, and Trump’s mad approach to international relations, notably his tariff policies. It’s hard to imagine the markets ever rejecting the US Treasury, but there’s nothing to be gained by pretending it couldn’t happen. That would almost certainly mean a financial crisis and a deep slump.
Politically the bill is a loser, though the Republicans were clever enough to introduce the tax cuts soon and the spending cuts only after the 2026 elections. Polls on the bill are unfavorable — the only variation is by how much. KFF found 35 percent with a favorable view, and 64 percent unfavorable, for a net of -29. Just 39 percent buy the line that Medicaid cuts are about reducing fraud and waste, compared to 60 percent who think it’s about taking coverage away from people who need it.
Fox, not known for hostility to the president, found 38 percent in favor, 59 percent opposed, for a net of -21. More than twice as many thought the bill would hurt them as thought it would help. Pew found smaller numbers but still with a negative skew: 29 percent in favor and 49 percent opposed, with more than half, 54 percent, feeling it would have a negative effect on the country.
When asked for comment on these negative numbers, the White House insisted to Axios that parts of it “are hugely popular” and “the American people want the One Big Beautiful passed and Congress must deliver.” Congress delivered. We’ll see how much the people like it; so far, they don’t.
Unpopularity doesn’t translate directly into politics, however. A senescent Democratic Party may very well wheel out Chuck Schumer and, for the youth vote, Hakeem Jeffries, who specialize in bloodless pieties. Fighting this monstrosity may end up being the task of socialists like Zohran Mamdani, who are showing what a popular, economic-populist response to Trump and his oligarchic backers might look like.