On July 3rd, Congressional Republicans passed the One Big Beautiful Bill Act (OBBBA)—sweeping, regressive legislation that will upend the American health care and tax systems. Drawing on estimates of Senate legislation published by the nonpartisan Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT), a new Center for American Progress analysis finds that the bill’s Medicaid cuts for low-income families and its tax giveaways to the top 1 percent of earners are roughly equal in size: approximately $1 trillion over the next decade.
Medicaid cuts: $1 trillion from low-income families
The OBBBA will reduce federal Medicaid spending by around $1 trillion from 2025 through 2034. The largest cuts come from Medicaid work reporting requirements ($326 billion); limits on state provider tax arrangements ($191 billion); and restrictions on state-directed Medicaid payments ($149 billion). These cuts will have far-reaching consequences for the millions of Medicaid enrollees who lose coverage and the health care providers forced to absorb massive hits to revenues. Medicaid and the Children’s Health Insurance Program (CHIP) currently cover nearly 80 million low-income Americans, including children, adults, people with disabilities, and seniors in nursing homes. The programs are a lifeline for hospitals, especially in rural areas, where hundreds of hospitals risk closure under financial strain if their patients lose insurance and can no longer pay for care.
Tax giveaways: $1 trillion to the richest 1 percent
The OBBBA will reduce taxes for the top 1 percent of taxpayers by more than $1 trillion over the next decade. Of that total, nearly half—$500 billion—will accrue to the top 0.1 percent of earners, a group of roughly 200,000 households with annual incomes exceeding $2 million. Meanwhile, JCT estimates and CAP extrapolations find that, over the next decade, the OBBBA actually raises taxes on the poorest Americans (those making under $15,000 per year) even before accounting for losses from the bill’s Medicaid and SNAP cuts.
Conclusion
The OBBBA’s budget math starkly exposes congressional Republicans’ priorities: $1 trillion in Medicaid cuts that hurt tens of millions of low-income families, with $1 trillion in tax cuts for the top 1 percent of Americans.
Methods
The authors’ estimates are based on the July 1, 2025, distribution analysis by the JCT, JCX-33-25. The JCT report provides the estimated reduction in federal taxes for the top 1 percent of earners (decomposed into 99th to 99.9th percentile and highest 0.1 percentile) for years 2027, 2029, 2031, and 2033. This analysis estimates tax reductions for remaining years from 2025 through 2034 by using linear interpolation from the two neighboring years in the JCT report (or, for 2025, 2026, and 2034, linear extrapolation). Since JCT does not distribute all tax changes, the authors use CBO’s estimate of tax revenue changes for the version of the OBBBA that passed the Senate and apply JCT’s distribution to this revenue number.
Medicaid estimates are based on the June 29, 2025, report by the Congressional Budget Office, “Estimated Budgetary Effects of an Amendment in the Nature of a Substitute to H.R. 1, the OBBBA, Relative to CBO’s January 2025 Baseline.” The authors’ analysis includes all CBO estimates for Title VII (Senate Committee on Finance), Subtitle B (Health), Chapter 1 (Medicaid), except three sections that were removed between the version analyzed by CBO and the version passed by the Senate (Sections 71110, 71114, and 71124). Two additional sections of the bill that reduce Medicaid spending (Sections 71101 and 71102) were modified between the version analyzed by CBO and the version passed by the Senate; this analysis does not reflect these changes, as their budgetary impact is not yet known.
The authors would like to thank Corey Husak, Natalie Baker, Bobby Kogan, and Emily Gee for their assistance.