One Big Beautiful Bill

What It Does, What It Means, and Why It Matters

Hi friends,

As you likely know by now, President Trump signed the landmark One Big Beautiful Bill Act (OBBB) into law. It's one of the most sweeping tax-and-spending reforms in U.S. history, blending permanent tax relief, massive restructuring of federal programs, and a reassertion of state-level responsibility.

You probably also know that it’s very complex. I hope the information below is somewhat helpful to you. I’ve also provided several sources where you can continue researching.

On a personal note, the debt is a big concern to me. We won’t really know the end result for a long time, though we will get indications by how tariffs go between now and the end of President Trump’s term. DOGE results are still rolling in and some cuts are on an annual basis. Manufacturing reshoring and job growth are improving the economy.

Keep the faith and keep praying for America and for peace. God bless you.

If you want to jump to the most detailed breakdown I found, go here: Holland & Knight: Sector-by-Sector Analysis of OBBB.

---

• Signed into law on July 4, 2025

• Many provisions take effect immediately; others phase in over time

• Tax cuts extended and expanded for workers, families, and seniors

• Medicaid and SNAP eligibility tightened

• Deficit expected to rise short-term but offset by reforms and historic tariff revenue

• Bill reflects partial shift from federal handouts to state oversight

• Social programs streamlined, somewhat reformed, not eliminated

---

Taxes, Deductions, and Credits

• Trump-era tax cuts extended permanently

• New deductions:

  • Overtime pay

  • Tipped income

  • Auto loans

  • Senior citizens’ Social Security: Up to $12,000 for couples. Social Security Applauds Passage of Legislation Providing Historic Tax Relief for Seniors

• Child tax credit increased to $2,200 per child

• SALT deduction cap raised for 2025 to $40,000 for middle-income households (five-year, temporary boost)

• Estate and gift tax exemption permanently increased

• MAGA baby accounts: $1,000 one-time deposit per newborn (details pending Treasury guidance)

  ---

Education and Student Loans

Income-based repayment for federal student loans is capped, and eligibility for Graduate PLUS loans is curtailed—reforms expected to save roughly $300 billion over 10 years.

---

Medicaid, SNAP, and the Safety Net

• Work requirement: Able-bodied adults (19–64, without serious disability or full-time children) must meet 80 hrs/month of work, volunteering, education, training, community service, or job search. Exemptions include caregivers, disabled, pregnant, or those in inpatient treatment.

• Redetermination (update) every 6 months (was annually)

• Stricter documentation and ID verification to curtail fraud

• States now pay 5% of SNAP benefit cost and 75% of admin cost

• Penalties for error rates above 6% encourage good management

• Provider taxes capped, reducing how states use them to leverage federal funds, curtailing waste

• Lawful immigrants face new waiting periods, while illegal immigrants remain ineligible for most federal aid

• Obamacare subsidies trimmed for non-citizens and those above threshold income

Around 16 states plus DC offer state-funded Medicaid or similar programs for illegal immigrants; CA, OR, IL, MA, MN are among them. According to CBO data, some 1.4 million people who are not legal residents of the United States are currently enrolled in Medicaid. While the law bars direct federal Medicaid funds for illegal immigrants, the reality is the program costs more than $900 billion a year, more than two-thirds of which is paid by the federal government. So no matter where you live, your tax dollars go to ‘benefits’ for illegal immigrants including emergency Medicaid, infrastructure support, and indirect subsidies. And the cost has grown rapidly—more than 130 percent in 10 years. The cost sharing provision would take effect Oct. 1, 2028. The provider tax reduction (applies only to states’ payments from federal) will be phased in incrementally from 2028 through 2032.

To support the work requirement, the bill expands state-led job training credits as a preferred alternative to federal welfare dependency.

The bill blocks federal Medicaid funds from going to any clinic that performs abortions—including Planned Parenthood—for one year , though states can differ from this.

In all, the Medicaid provisions of the One Big Beautiful Bill Act could reduce federal spending on the program by $1 trillion over 10 years, according to an analysis by KFF.

Of course, ‘healthcare’ providers, among others, don’t like the changes. Keep in mind, losing tax dollars is not to their benefit.

According to the AP:

“The losses won’t come all at once. The GOP’s “ One Big, Beautiful Bill Act ” makes changes that will [gradually decrease] enrollment through federal health care programs over a decade in order to save nearly $1 trillion [of tax dollars. If Congress doesn’t undo the savings by just spending it somewhere else, that’s a huge dent in the projected ‘cost’ of the bill.]

Some provisions have phased-in delays (e.g., Medicaid work mandates shall not begin before the end of 2026).

The bill is likely to reverse years of escalating health insurance rates in the U.S., gains that have also been marked by record spending on federally-funded health care coverage.”

---

Tariffs and Revenue Offsets

• Over the next decade, tariff collections are projected to reach $3.3 trillion, potentially covering much (or even all) of the estimated $2.8 to $3.4 trillion deficit increase tied to the bill’s spending and tax cuts (CBO estimate). (The updated CBO estimate is not yet available, but look for it here probably by the end of July. The page is as of 5/22/2025 at the time of this writing.)

• The bill leans heavily on tariffs to generate revenue—over $106 billion collected in just the first 5 months of 2025 (record-setting).

• Tariffs can offset the cost, but Congress must resist the urge to continue/grow spending. Otherwise, the deficit will not be helped.

• Tariffs are how America funded itself before the income tax existed, especially under Andrew Jackson, who famously paid off the national debt largely through tariff income.

---

Federal vs. State Responsibility Shift

• Major financial responsibility for Medicaid and SNAP shifts to states

• Reduces federal bureaucracy and cost over time

• Forces states to manage fraud, eligibility, and coverage with local accountability

• Critics fear reduced access; supporters praise constitutional realignment

Federal-to-state cost shifting is significant. That means savings to taxpayers. Even if your state has income tax, states manage tax dollars better than federal. In general, the closer to ‘home’, the better tax dollars are managed.

---

What Was Removed or Changed Last-Minute

• Section 899 excise tax on imports removed after G7 diplomatic talks

• Despite early headlines, most clean energy tax credits survived; the rollbacks were narrowed during Senate negotiation and remain relatively minor. The bill also adds new restrictions on clean energy subsidies for projects linked to foreign adversaries, such as China, marking a targeted rather than broad-based rollback.

• Remittance tax proposals altered from 5% to targeted exclusions

---

Constitutional and Moral Clarity

• Social safety net programs are not Constitutionally required

• No Constitutional amendment mandates healthcare, food, housing, or subsidies

• Programs like Medicaid and SNAP are created by statute or regulation and funded by taxpayers

• Reducing handouts is not "taking from the poor"—it’s easing the burden on all taxpayers

• Tax cuts are by percentage; those who pay more taxes get more tax dollars back

• Critics spin it as "wealth transfer up," but it’s really a rollback of forced redistribution

Social safety net programs have greatly expanded since FDR’s New Deal and especially during the 1960s and ACA era. Critics view this as government overextension. Social Security now represents about 23% of federal spending, a major, long-term cost.

---

What Comes Next

• CBO final score expected later in July

• Treasury and HHS to issue regulatory guidance on:

  • MAGA baby accounts

  • Medicaid documentation processes

  • Penalty enforcement timelines

  • Foreign Aid Review Requirement: The bill also requires a full audit of non-military foreign aid by FY2026, signaling a likely push toward future reductions in overseas spending.

  • The bill also authorizes roughly $175 billion in expanded border and deportation operations, reflecting a renewed focus on immigration enforcement alongside domestic reforms.

• States will begin preparing for expanded oversight and budget pressures

---

Further Reading and Sources

• Holland & Knight: Sector-by-Sector Analysis of OBBB

• CBO Budget Estimates for House Version of OBBB - Not yet updated

• White House Myth vs. Fact Sheet (Full disclosure - there’s some ‘spin’ in this.)

• SSA Expects Megabill to Remove Tax for Nearly 90 Percent of Social Security Beneficiaries: More than 51 million American senior citizens will likely benefit from the bill

• KFF analysis

• https://apnews.com/article/gop-bill-trump-medicaid-cuts-coverage-health-bb4f090d2706ffb3d5652e70f246a10e

• https://familiesusa.org/wp-content/uploads/2025/06/One-Big-Beautiful-Bill-Act-Provisions-Related-to-Medicaid-ACA-and-Medicare.pdf

• https://www.cbo.gov/publication/61461 (Check for updated information end of July.)

• This is the actual bill. https://www.congress.gov/bill/119th-congress/house-bill/1/text Senate 7/1/2025

• https://www.businessinsider.com/big-beautiful-bill-affects-taxes-student-loans-maga-accounts-2025

• https://www.politico.com/news/2025/06/26/supreme-court-planned-parenthood-decision-00425785

• https://en.wikipedia.org/wiki/One_Big_Beautiful_Bill_Act

• https://www.theguardian.com/us-news/2025/jul/02/trump-bill-house-senate

• https://time.com/7299765/big-beautiful-bill-house-republicans-trump/

• https://www.naco.org/news/us-senate-passes-amended-reconciliation-bill-text-what-it-means-counties

For detailed tracking by sector (agriculture, tax, energy, etc.), we recommend Holland & Knight’s detailed review as a companion to this summary.

---

P.S. The poverty level is well named. Some requirements are based on 138% of Federal Poverty Level (FPL). For a family of 2 in 2025: 100% FPL ≈ $19,720, so 138% ≈ $27,200/year. Ranges adjust with household size; e.g., a family of 4: ~$48,500 FPL, so 138% ≈ $66,900.

---

---

God bless you, God bless President Trump and team, and God bless America!

---

The battle for our God-given freedoms is always just starting.

---

Subscribe at RationalAmerican.org for more facts, insights, and uncensored commentary.

---

As always, do your own research; make up your own mind.
This Substack is provided for informational and commentary purposes only. All claims are based on publicly available sources and are presented as political analysis, not legal conclusions. No assertion is made of unlawful conduct by any individual or organization unless supported by formal public record.
The views expressed reflect my personal perspective on current events. While I strive for accuracy, readers are encouraged to verify details using the official sources linked above. References to third-party material are included for your consideration and do not necessarily reflect my views or imply endorsement.
If you share this content, please include this disclaimer to ensure appropriate context and clarity.
(AI may have been used in this article.)

---

Stay calm - President Trump is a businessman who operates strategically, and not everything will make sense at first. His plan to shrink government and Make America Great Again is a process, not an overnight fix. Trust the long game, not just the headlines.

---

United we stand. Divided we fall. We must not let America fall.

---

VoteTexas.gov, https://www.votetexas.gov/get-involved/index.html

---

Until next time…

Please share your thoughts in the comments. Or email me, and let’s have a problem-solving conversation. I hope we can create a caucus with positive, back-to-the-founders’-dream-for-America results. Have a topic you want to know more about?

Some housekeeping…

Going forward, you may need to check your spam folder. And please mark this address as ‘not spam.’ If the newsletter isn’t in your spam folder either, you should look in the Promotions tab.

You can always see everything on the website, RationalAmerican.org.

Thanks again for reading! I’m glad you’re here!