Poverty in America Remained Flat in 2024 But Will Likely Rise as the One Big Beautiful Bill Act Goes Into Effect

The U.S. Census Bureau’s newly released annual poverty report shows that poverty remained flat in 2024. However, the Trump administration has already taken multiple actions that will raise costs for low-income families and push millions into economic deprivation in the years ahead. First, it implemented regressive tariff policies that will disproportionately harm consumers with lower incomes. Then, President Donald Trump signed into law the One Big Beautiful Bill Act (OBBBA), which includes historic cuts to some of the most effective government programs to support people’s basic needs, including Medicaid and the Supplemental Nutrition Assistance Program (SNAP). As these cuts phase in over the course of the next few years, kicking people off their health insurance and food benefits, poverty will steadily increase.

Poverty remained flat in 2024 but varies widely by demographic group

According to the Census Bureau’s report, the 2024 poverty rate was 10.6 percent under the official poverty measure (OPM), or 35.9 million people, and 12.9 percent under the supplemental poverty measure (SPM), or 43.7 million people.

While the OPM only accounts for pretax cash income such as wages and Social Security payments, the SPM provides a more comprehensive view of family finances by including taxes and tax credits as well as noncash benefits such as SNAP, medical costs, health insurance premiums, and other common expenses. The SPM also accounts for geographic cost-of-living differences, while OPM poverty thresholds are standardized across the United States. The 2024 OPM data represent a slight, 0.4 percentage point decrease from 2023, while the SPM remained flat. (see Figure 1) SPM poverty thresholds grew faster than inflation in 2024 since they are based on basic needs, such as housing, that experienced increased price growth and spending during the past few years. Larger thresholds mean more people are captured in the SPM, which can help offset any income and employment gains that are highlighted by the OPM.

African Americans and people 65 years and older experienced the largest increases in poverty under the SPM. (see Figure 2) This figure also highlights the groups that will bear the brunt of the OBBBA’s cuts affecting people in and near poverty. These cuts will be more likely to harm women, people age 65 and older, Black and Hispanic families, and people without a high school diploma.

The OBBBA will push more families into poverty

The One Big Beautiful Bill Act, passed in July 2025, will have devastating consequences on poverty in the years ahead. According to the nonpartisan Congressional Budget Office (CBO), the bottom fifth of the household income distribution—which captures the population experiencing poverty—will be worse off because of the OBBBA’s cuts to programs that support people and their basic needs. Moreover, these program cuts will more than offset any tax cuts these individuals receive. (see Figure 3) In fact, the bottom 10 percent are estimated to lose $1,214 each year, on average, while the top 10 percent gain $13,622.

A higher uninsured population will result in increased medical expenses

While the uninsured rate stayed the same in 2024—at 8 percent, or 27 million people uninsured—the uninsured population is expected to rise by roughly 15 million people due to the impacts of the OBBBA, paired with the expiration of the Affordable Care Act (ACA) enhanced premium tax credits at the end of 2025. The OBBBA enacted the largest cuts to Medicaid in history, and the CBO estimates that 10 million Americans, including 7.5 million with Medicaid, will lose health care coverage by 2034 as a result of this law alone. Medicaid, which provides coverage to low-income individuals and families, children, pregnant women, older adults, and people with disabilities, helps lift enrollees out of poverty by reducing their out-of-pocket medical expenses. Cuts to the program will be devastating for families near or in poverty, as medical expenses pushed nearly 7.5 million people into poverty in 2024.

The largest Medicaid coverage losses will result from harsh and burdensome work reporting requirements—which are costly to administer; do not boost employment, as most adult enrollees are already working; and, ultimately, eliminate coverage for eligible people. A study of Arkansas’ 2018 Medicaid work reporting requirements found that people who lost Medicaid coverage experienced problems in paying off medical debt, delayed care, and delayed taking medications due to unaffordability. The OBBBA’s Medicaid cuts are expected to increase average annual out-of-pocket costs by $2,220 for adults who lose coverage. Previous Center for American Progress analysis estimates that a couple with an annual income of $22,000 who lose their Medicaid coverage because of the bill could face $4,440 more in out-of-pocket costs.

Not only are costs going to increase for people who lose their Medicaid coverage; many enrollees who are able to keep their coverage will still see their out-of-pocket costs increase because of the OBBBA. Medicaid expansion adults—those living at or just above the federal poverty line who qualify for the program based on income alone—could see their out-of-pocket costs increase to up to $35 per health care service in October 2028 once the OBBBA’s cost-sharing requirement takes effect. For a Medicaid expansion adult in a family of four with an income of $33,000 (effectively right above 100 percent of the federal poverty guidelines), out-of-pocket health care costs could increase by up to $1,650 each year.

In addition, more than 4 million people will lose health care coverage due to the expiration of the ACA enhanced premium tax credits at the end of 2034. Since 2021, these enhanced tax credits have improved coverage affordability for Americans at or near the poverty line, playing a substantial role in 9 million people with incomes below 150 percent of the federal poverty level (FPL)—for whom zero-cost premium options are available—enrolling in ACA marketplace plans in 2024. With marketplace insurers already proposing median premium increases of 18 percent, people living in households in or near poverty can expect to pay hundreds of dollars more for marketplace coverage in 2026. Under the original premium tax credits, people with incomes below 150 percent of the FPL would have been projected to pay nearly $400 in premiums. Following the expiration of the enhanced premium tax credits, however, a 45-year-old marketplace enrollee with an income equal to 166 percent of the FPL would see their premium costs increase by an average of 573 percent, or $917.

SNAP cuts will carve a substantial dent in grocery budgets

The OBBBA also cuts $187 billion from SNAP, or nearly 20 percent of estimated outlays through 2034, making it the largest cut in the program’s history. As the nation’s largest anti-hunger program, serving about 42 million people across the country, such drastic cuts will strain food budgets at a time when concerns about grocery prices remain top of mind for many consumers. Research shows that participants use SNAP to cover 63 percent of their grocery expenses, meaning any cut puts families at immediate risk of not being able to afford enough food. According to CBO estimates, SNAP participation will decrease by 2.4 million people in an average month due to recipients getting kicked off their benefits for not being able to demonstrate compliance with burdensome expanded work requirements. This includes 800,000 older Americans between the ages of 55 and 64 as well as 300,000 parents and other caregivers living with children as young as 14.

Additionally, states will have to begin paying up to 15 percent of SNAP benefit costs for the first time starting in 2027, which will force them to find ways to raise revenues or cut costs to accommodate this new source of spending. States that are unable to pay for these benefits could end up cutting people off SNAP to save money or even opt out of the program altogether. The CBO estimates that, in an average month, this policy change will reduce or eliminate benefits for about 300,000 people and kick 96,000 children off nutrition programs, such as free school meals and summer electronic benefits transfer (EBT) funds, for which they are automatically eligible through SNAP.

These benefits are an essential resource for making ends meet in low-income households. In 2024 alone, nearly 3.6 million people were kept out of poverty by SNAP, making it one of the nation’s most effective anti-poverty programs. (see Table 1) As the policies of the OBBBA go into effect, the effectiveness of SNAP as a tool to combat poverty will fall.

Low-income families are left out of tax cuts

The Trump administration and congressional Republicans who support the OBBBA praise its tax cuts, particularly the provisions eliminating taxes on tips and overtime, as well as tax cuts for older Americans and the expansion to the child tax credit (CTC). However, the reality is that these small, temporary policies leave out the vast majority of families in or near poverty.

Low-income workers and retirees typically do not owe federal income taxes after applying the standard deduction and existing tax credits, so extra deductions for tipped income and overtime pay, along with the senior deduction, are not going to help people in or near poverty. According to the Tax Policy Center, each of these deductions benefits less than 1 percent of households in the bottom fifth of the income distribution.

In addition, the small $200 increase to the CTC, to a maximum of $2,200 per child, does nothing for the 17 million children who were already left out of the full credit; and the law adds 2 million more kids to this group. Because the CTC phases in with income, only moderate- and higher-income households will benefit from increases to the maximum credit size.

For example, a married couple filing jointly with two children would need to earn $41,500 to qualify for the full credit—$5,500 more than it would have taken to qualify for the maximum without the OBBBA. Meanwhile, the law makes about 2.6 million children with a Social Security number (SSN) ineligible for the credit if they do not have a caregiver with an SSN, even if the whole family is in the United States lawfully. This will likely push many of these families into poverty, considering the refundable portion of the CTC kept nearly 2.5 million people out of poverty in 2024.

Conclusion

While poverty remained flat from 2023 to 2024, the OBBBA will ensure that the number of people experiencing severe financial hardship will skyrocket in the years to come as core pillars of the nation’s anti-poverty programs undergo historic cuts. Meanwhile, costs for goods will continue to rise as businesses raise prices due to tariffs, putting more pressure on those who have the least.

The authors would like to thank Natasha Murphy, Andrea Ducas, Corey Husak, Lily Roberts, Emily Gee, Steve Bonitatibus, and Bill Rapp for their valuable reviews and contributions.