The House of Representatives has passed Trump‘s Mega bill pairing tax cuts with spending cuts, which would significantly impact low-income Americans and the national debt. The bill, backed by President Donald Trump, would cut taxes, primarily benefiting the wealthy, while reducing funding for Medicaid and food stamps.
According to the Congressional Budget Office, the tax measures would increase the deficit by $3.8 trillion over a decade, while cutting nearly $1 trillion in federal support for Medicaid and food stamps. The bill would add $3.1 trillion to the national debt, including interest, over the next decade.
The tax cuts would benefit most Americans, with over 80% seeing a tax cut next year, according to the Tax Policy Center. However, the wealthy would receive the largest benefits, with 60% of tax cuts going to the top 20% of earners. Middle-income households would see a tax break of $1,840, while low-income households would see a tax cut of $160.
However, when considering both tax cuts and spending reductions, low-income Americans would fare worse. The Penn Wharton Budget Model found that the lowest-income Americans would see their incomes fall by $820, on average, next year, while the highest earners would enjoy income boosts of over $12,000.
The bill’s impact on Medicaid and food stamps would be significant, with millions of people potentially losing access to health insurance and food assistance. “For lower-income people, what they are losing in Medicaid, Affordable Care Act premium support, and food stamps more than dominates any type of benefits from taxes on tips and other tax cuts,” said Kent Smetters, faculty director of the Penn Wharton Budget Model.
The bill’s fate remains uncertain as it moves to the Senate, where changes are expected. Senate Majority Leader John Thune will face a major legislative test in determining the bill’s future.