August 2025 Update | One Big Beautiful Bill Act
The One Big Beautiful Bill Act: What’s New as of August 2025
Signed Into Law on July 4, 2025
After narrow votes in both chambers, President Trump signed H.R. 1, known as the One Big Beautiful Bill Act, into law on July 4, 2025 (Public Law 119‑21) Investopedia+15New York State Association of Counties+15Investopedia+15Wikipedia+9Congress.gov+9IRS+9.
The final vote: House 218–214, Senate 51–50. It became law the next day Congress.gov+1.
Key Policy Developments & Updates
Updated Cost & Deficit Forecasts
The Congressional Budget Office recently revised its estimate: the act is now projected to increase the federal deficit by $4.1 trillion over 10 years up from prior estimates of $3.4 trillion ± $2.8 trillion MarketWatch.
A worst-case scenario, extending temporary tax breaks permanently, could push the total to nearly $5 trillion KCCI+10MarketWatch+10KFF+10.
Tax Breaks & New Incentives
OBBBA extends the 2017 Tax Cuts and Jobs Act provisions permanently, including doubled standard deduction, child tax credit of $2,200 per child, and pass-through income deduction Investopedia+3Investopedia+3Bipartisan Policy Center+3.
It also allows:
Deduction of up to $25,000 per year in tipped or overtime income (2025–2028) Kiplinger+4IRS+4Investopedia+4Investopedia.
No tax on auto loan interest (up to $10,000) for U.S. assembled vehicles bought 2025–2028, subject to income limits ($100K individual / $200K joint) Investopedia.
$6,000 senior deduction in addition to standard deductions (2025–2028), phasing out above $75K/$150K MAGI IRS.
Medicaid & Medicare Changes
The bill slashes over $1 trillion from Medicaid and triggers $500 billion in automatic Medicare cuts beginning in 2026—while preserving Social Security benefits Kiplinger+2League of Women Voters+2.
Key changes include:
Monthly work, education, or volunteering requirements (80 hrs/month for ages 19–64)
Cost-sharing up to $35 per service
More frequent eligibility checks (every six months)
Reduced retroactive Medicaid coverage: from three months down to two (traditional) or one (expansion populations), effective in 2027—raising the risk of medical debt for seniors Bipartisan Policy Center+4MarketWatch+4Congress.gov+4Wikipedia+1League of Women VotersThe White House.
Rural Health & Supplemental Nutrition (SNAP)
A new $50 billion Rural Health Transformation Fund over five years is meant to cushion hospitals, clinics, and nursing home closures, but experts warn it's insufficient for covering an estimated $155 billion in rural Medicaid cuts, and distribution isn’t population-sensitive enough Investopedia.
SNAP reforms shift more costs to states (from 50% to 75%) and presume significant federal cuts, up to $186 billion and added work mandates; up to 1.5 million New Yorkers could lose SNAP, according to New York's analysis New York State Association of Counties.
Legal Pushback: Planned Parenthood Funding Protected
A federal court issued a nationwide injunction on July 28, 2025, forbidding the administration from cutting Medicaid funding for Planned Parenthood-affiliated clinics—originally blocked for one year under the new law New York Post.
Drug Pricing & Medicare Negotiations
Provisions in the law delay or exempt prominent prescription drugs—including Keytruda, Darzalex, Opdivo, Venclexta from inflation-based Medicare negotiation. The result: $5 billion less savings over the next decade wsj.com.
Political Backlash & Public Sentiment
Polls show negative net favorability between ‑22% and ‑10% based on different surveys—worse than for the 2017 tax law. Analysts warn it may result in major Republican losses in 2026 midterm elections The Daily Beast.
Why It Matters: Who Gains, Who Loses
Who Benefits Who Gains Who Loses Tax relief- Higher-income earners, seniors, small businesses Low‑ to middle‑income households may lose net benefit Medicaid & SNAP changes States (shifted costs), budget appeasement Low-income households, rural residents, seniors Drug-pricing carve-outs Pharmaceutical companies Medicare—costs remain higher, fewer negotiations Political leverage Conservatives linking it to “Make America Great” agenda GOP legislators in working-class or swing districts