Black Slate Inc. Digest

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To help pay for the more than $5 trillion in tax cuts, the OBBB enacts significant spending cuts that target federal assistance programs crucial for millions of low- and middle-income Americans: 

• Healthcare – The main target of Republicans was Medicaid, where eligibility restrictions, expanded work requirements, and limits on provider taxes are expected to cut the program by almost $1 trillion over the next 10 years. CBO projects that this will lead to almost 8 million Americans losing Medicaid coverage. Additionally, Republicans chose not to extend the Biden Affordable Care Act premium tax credits, set to expire at the end of this year. If they expire, 5.6 million Americans will lose their health insurance, as noted in this Congressional Research Service report.

• Food Assistance – Food assistance was also targeted by the Republicans, who, through the OBBB, cut the Supplemental Nutrition Assistance Program (SNAP) by almost $200 billion over 10 years. According to the CBO, 5 million Americans, mostly children and the elderly, would lose their modest SNAP benefits due to these cuts. 

• Other Spending Changes – Beyond Medicaid and SNAP, the OBBB enacted deep cuts to education programs and housing assistance. Additionally, the OBBB secures significant savings by rolling back green energy tax credits passed through the Inflation Reduction Act (IRA) of 2021, but added over $300 billion in spending for immigration enforcement and defense. 

Notably, many of the spending reductions are phased in over several years, intensifying in the second half of the 10-year budget window. This was a strategic choice by Republicans, who also front-loaded the benefits of many of the tax cuts outlined above, as staggered and delayed implementation will help obscure the OBBB’s harmful effects. 

Together, these spending cuts, paired with massive tax breaks, shift resources away from lower-income Americans and towards the ultra-wealthy, exacerbating economic inequality and worsening our fiscal health.