Trump’s “Big Beautiful Bill” Hits Families Hard

Signed on July 4, 2025, the One Big Beautiful Bill (OBBB) promised big tax breaks, but what families will actually feel is something very different. The Congressional Budget Office estimates it will add about $3.4 trillion to the federal deficit over the next decade, once rising borrowing costs are factored in.

For low-income households, the reality is stark. Starting in 2026, Medicaid recipients must meet new requirements that strip coverage from millions, especially parents, students, and those juggling unstable work. Simultaneously, SNAP (food assistance) will face massive cuts, putting nutritious meals out of reach for many families and forcing states to shoulder costs

Tax relief under the bill feels distant for those who need it most. The Child Tax Credit goes up, but remains only partially refundable, meaning roughly 17 million children in low-income households may get little or no benefit. Meanwhile, the wealthiest see permanent gains: beginning in 2026, estate and gift tax exemptions climb to $15 million per person, locking in sweeping advantages for the affluent.

The One Big Beautiful Bill was sold as relief for working Americans. But look closer at the timelines:

• Starting Immediately, Permanent tax cuts for the wealthy and big estates.

  
  

• 2026–2028: Medicaid and SNAP cuts take effect, hitting low-income and working families hardest.

  
  

• January 1, 2026: New taxes on immigrant families sending money home.

  
  

• 2026: End of Graduate PLUS Plans, SAVE, ICR, and PAYE plans

  
  

• 2029 and beyond: Multi-year ICE funding locked in while temporary tax relief for workers expires.

Safety Nets Slashed 

Medicaid cuts hit first. Starting at the end of 2026, anyone on Medicaid will face 80-hour monthly work requirements. The CBO projects 12 million people will lose coverage by December 2026. This isn’t a temporary policy, the work requirement becomes permanent. That means parents caring for newborns, people between jobs, and those in low-wage seasonal work will lose access to healthcare for good.

SNAP food assistance is shrinking and by 2028 new rules will extend work requirements up to age 64. States with high “error rates” will have to pay 5–15% of benefit costs permanently — a budget strain that could lead to even deeper cuts at the state level.

The federal government will slash SNAP funding by $186 billion over ten years, a direct hit to working families trying to put food on the table.  It is estimated 22.3 million families will lose some level of benefit and the average family will lose approximately $146 a month in support.

State & Local Government Pain: Administrative Burdens Ahead

While families wrestle with cuts to care and nutrition, state and local governments are facing steep new administrative costs—costs that will likely funnel back to household budgets. The bill imposes extensive recordkeeping and IT requirements for both SNAP and Medicaid, demanding costly updates to systems for tracking eligibility and benefits. 

OBBB is projected to impose nearly $2 billion in new, unreimbursed annual costs on state and local governments—about $1 billion a year for states in transitional administrative expenses, plus $850 million annually for counties. Over a decade, the total burden on “subnational governments,” including cost-shifting for benefits payouts and other administrative costs, could reach $1 trillion.

The Wealthy Win — Low-Income Families Get Left Out and 

The OBBB locks in—or makes permanent—Trump-era tax cuts delivering disproportionately large benefits to higher-income households.  Nearly 60% of the tax benefits go to households in the top quintile, with the bottom 20% seeing only about a 0.8% reduction in income.

And the richest Americans make out best. Starting in 2026, estate and gift tax exemptions jump to $15 million per person — forever. Historically, less than 1% of the population is capable of leaving behind a taxable estate, and only 0.08% of the population that died in 2019 left behind an inheritance large enough to trigger the tax. This change will only benefit the wealthiest Americans.

Workers Aren’t Getting What They Were Told

The touted overtime tax benefit under OBBB falls well short of expectations—it’s partial, temporary, and excludes many employees, especially in the public sector.  Elyanna Calle, the president of Restaurant Workers United, highlights this idea, “‘No taxes on tips’ just creates a larger reliance on tips, instead of solving the issue of base wages — wages that workers can rely on, and budget on, and count on,” 

• Overtime tax “break” is much smaller than promised.  Instead of making overtime pay tax-free, OBBB only offers a deduction for about one-third of overtime earnings. Social Security, Medicare, and state income taxes still apply to all of it.

• Many public employees are completely left out.  Over two-thirds of overtime payments—such as those calculated with paid leave (holidays, vacation, personal time), double-time, or based on non‑standard workweeks (like 35-hour weeks)—won’t qualify for the deduction. That means a lot of workers get nothing from this supposed break.

• The tax benefit is temporary and limited.  Unlike the broad, permanent relief some expected, this is a short-term patch that applies only to a fraction of overtime pay—and only for certain workers under specific payroll rules.

Child Tax Credits Hurts Families and Reduces Benefit Recognized Under Biden

The Child Tax Credit rises to $2,200 in 2025 with inflation indexing, but it still isn’t fully refundable. This means 17 million children in the lowest-income households will receive only a partial credit, or nothing at all. 

Under Biden’s temporary 2021 expansion, the CTC was fully refundable and gave each parent a tax credit worth $3,000-per-child or $3,600 for children under age 6. Within a week of its implementation, the percentage of households with children experiencing food scarcity dropped from 13.7% to 9.5%. Trump’s version is $800 less, partially refundable, and locks low-income families out while making tax cuts for the wealthy permanent.

Immigration Crackdown Gets the Cash — Not Families

The bill directs billions into a multi-year expansion of immigration enforcement — with ICE, CBP, immigration courts, detention capacity, and enforcement technology guaranteed funding increases by $100 billion through FY 2029. That’s on top of a $5,000 “apprehension fee” for people caught crossing between ports of entry and a new $100 asylum application fee.

It also slaps a 1% tax on remittances starting January 1, 2026 — a direct hit to immigrant families sending money to relatives abroad. These revenue choices make clear: this bill prioritizes building detention beds and border walls over feeding children or keeping families healthy.

Higher Education Doors Narrow

By July 2026, Graduate PLUS loans disappear for new borrowers, replaced with capped loans and a single income-based repayment plan. Private colleges with large endowments will face hefty taxes starting in 2026, costs that will likely be passed to students. These changes, combined with the bill’s broader cuts, will make higher education harder to access for first-generation and working-class students.

Conclusion

The One Big Beautiful Bill was sold as a win for working families, but its permanent tax cuts overwhelmingly reward the wealthy while its temporary, limited benefits for workers and low-income households expire. Paired with deep cuts to Medicaid, SNAP, and education, and billions in new costs for state and local governments, OBBB shifts resources upward, leaving everyday Americans with higher burdens and fewer supports.