Big beautiful bill could hurt lowest-income Americans

Posted

The one, big beautiful bill has passed in the House and is being proposed to the Senate where it has not yet passed - both parts of Congress need to pass it in order for it to become law.

The bill’s text and changes to law may be modified by the Senate. It could solidify President Trump’s agenda for his second term.

“We’re going to have to wait to see what the Senate says,” said Marie  , a Uniondale resident with knowledge of the social services system.

According to the text of the bill that passed through the House on Congress’s  , the bill would eliminate Direct File taxes and enhance tax cuts that benefit both middle-income and high-income families and businesses.

Direct File enables millions of Americans to file their taxes online for no fee. If the bill passes the Senate with this clause, that program will be eliminated and residents must file taxes through private financial firms only. The service would still be free, so determining if this is a good thing depends on a person’s opinion of private versus government information collection.

The bill states that tax cuts would include reduction of gift and inheritance tax, which is where most of the wealthiest Americans’ money comes from, which then earns interest that isn’t counted as income for tax purposes. This will benefit them, while reducing money available for the national budget.

The bill would mean an increase in the child care tax credit, an increase in the standard deduction and temporary enhancement, no tax on tips or overtime, and no tax on car loan interest. This will benefit people in the low- and middle-income ranges.

According to the bill, it would create new work requirements for Medicaid. All people who are not exempt through some of the old rules, including minors, pregnant people and those unable to work due to illness, would be required to perform community engagement. That means 80 hours of work, community service and participation in a job program or enrollment in school, per month - 20 hours per week on average. The goal is to eliminate abuse of the system by able-bodied young people.

The bill also includes monthly reporting for eligibility determination, much more frequent than it currently is. This would make it difficult or impossible to get Medicaid for people who have trouble navigating the paperwork system.

While this isn’t a cut to the budget for Medicaid, this would make many individuals non-eligible for it, which is effectively a cut in Medicaid spending. This hurts anyone at or below 150% of the federal poverty line, which comes to $23,475, including those who can’t find enough work or afford school.

In 2023, the median household income in Uniondale was $115,037, according to the U.S. Census Bureau. The poverty rate in Uniondale was 10.5%. 

“And if that cut goes through, a lot of people will lose their benefits,” Reimers said. “Or if they don’t lose it completely it will be reduced. That will be devastating for certain categories of people.”

Another category of people who would be affected by the bill as the text is laid out on Congress’s website are asylum seekers - they would have to pay a fee every year while waiting for their applications to go through. Whether this is a good or bad thing depends on a citizen’s opinion of what asylum seekers can and should contribute to the country.

The bill would also make it easier to fund private school rather than public school and higher education. There are tax exemptions in the bill for organizations that provide scholarships for private primary and secondary school.

Within Uniondale there are eight elementary/middle public school and one high school. Not including the public charter schools there are only less than a handful of private schools. It also includes an excise tax on higher education institutions, unless they are religiously affiliated.

Another effect of the bill in its current form is also on higher education. It reduces or eliminates student loan programs. The PLUS loan program would be eliminated in 2026. The subsidized loan program, where the government pays the loan’s interest while a student is still in school, could also be eliminated.

The total amount available to borrow for all levels of higher education would also be reduced. Loan amounts for each term would be determined by the median cost of that college program, rather than the cost at the school a student is attending — making less money available to the more costly schools’ students.

Pell Grants would require 30 hours of class credit per year, rather than 24, making them an impossible resource for many students.

This helps reduce the budget needs of the government, while discouraging enrollment in higher education. Like other provisions in the bill, determining what the benefits and drawbacks are depends on each individual’s opinion.

“If it’s a cut, it can’t be for the better,” Reimers said.

The bill includes elimination of most, not all, clean energy and zero-emissions tax credits. Citizens must determine for themselves whether this is positive or negative, depending on their opinion of clean energy development. 

Many of its provisions make it easier to construct and operate pipelines and traditional energy services, without approval from state or local governments.  Much of the bill makes a large sum of money available for the Department of Defense. And many of its provisions are left to the discretion of the Secretary.

Individuals may agree or disagree with all or part of this bill. Reimers encourages them to make their opinions known to their senators before the Senate votes on the bill.