What is OBBBA? An Introduction to the One Big Beautiful Bill

What Does the One Big Beautiful Bill Entail?

The OBBBA, officially known as the One Big Beautiful Bill Act of 2025, is a budget reconciliation law passed by the 119th United States Congress. It encompasses a wide range of fiscal adjustments, including major tax cuts and changes to social spending policies. Key provisions of the One Big Beautiful Bill include:

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• Tax Cuts: The bill makes permanent the tax cuts approved during Trump's first term in 2017 and introduces new tax deductions, estimated to cost up to $4.5 trillion.
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• Border and National Security: It allocates approximately $350 billion for border and national security, including $25 billion for the development of the "Golden Dome" defense system.
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• Medicaid and Food Programs: The OBBBA significantly scales back the federal SNAP food program and makes substantial cuts to Medicaid, the health insurance program for low-income Americans. It introduces a work requirement for able-bodied adults without children or disabilities, mandating at least 80 hours of work, apprenticeship, or community activities per month to qualify for Medicaid. This change is expected to result in 11.8 million Americans losing their Medicaid coverage over the next decade. Medicaid re-enrollment will also be required every six months instead of annually, with stricter income and residency verification.
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• Clean Energy: The bill introduces reforms to clean-energy tax incentives from the Inflation Reduction Act of 2022 (IRA), including speeding up phase-outs.

How Will the One Big Beautiful Bill Impact Americans?

The OBBBA is anticipated to have a mixed impact on the American economy and its citizens:

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• Economic Boost: Experts believe the OBBBA will stimulate the U.S. economy, benefiting certain industries and labor groups. The Joint Committee on Taxation (JCT) estimates the bill could increase GDP by 0.4 percent on average over the next decade, with stronger growth in the first five years.
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• Increased Deficit: The Congressional Budget Office (CBO) projects that the OBBBA could increase the federal budget deficit by nearly $3.3 trillion over the next 10 years (2025-2034). However, the Treasury Secretary Scott Bessent argues that the CBO's assessment does not account for significant revenue from President Trump's tariff policies.
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• Social Welfare Cuts: The bill's significant cuts to national social welfare programs, particularly Medicaid and food stamp programs, will disproportionately affect low-income individuals. The introduction of work requirements for Medicaid recipients is a notable change, potentially leading to a substantial loss of health insurance coverage for many.
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• Impact on Specific Groups: While the bill aims to encourage U.S. businesses to expand, it will significantly reduce social security for many. It also includes provisions that could accelerate Social Security and Medicare insolvency indirectly by reducing revenue from the income taxation of Social Security benefits. Additionally, a student loan tax break within the OBBBA is criticized for primarily benefiting high-income borrowers.

The One Big Beautiful Bill (OBBBA) represents a sweeping legislative effort by the Trump administration to reshape the American economic and social landscape. While proponents argue it will boost the economy and fulfill campaign promises, critics raise concerns about its impact on the national debt and social welfare programs, particularly for vulnerable populations. Its long-term effects will undoubtedly be a subject of ongoing debate and analysis. Understanding the nuances of the One Big Beautiful Bill is crucial for comprehending its far-reaching implications for the United States.