One Big Beautiful Bill turns one — and its Medicaid cuts are reshaping the midterms

A year ago, President Donald Trump signed the One Big Beautiful Bill Act into law on the Fourth of July, framing it as the defining achievement of his second term. This July Fourth, he gave a speech touting the stock market and military interventions abroad. The anniversary of the law went conspicuously unmarked — a telling signal of how complicated the politics have become, according to CNN.

The law, known by its initials OBBBA (Public Law 119-21), is now a year old and its consequences are landing on American households in ways that are measurable, uneven, and deeply contested. It has cut taxes for tens of millions of workers, seniors, and corporations. It has also set in motion major reductions to Medicaid, and it is projected to leave millions without health insurance — numbers that are now driving campaign ads, town halls, and competitive House and Senate races across the country.

The Congressional Budget Office estimates the law will increase the federal budget deficit by $2.8 trillion by 2034. It projects that 10.9 million Americans will lose health insurance coverage. A further CBO analysis found that the highest-earning 10 percent of Americans would see incomes rise by 2.7 percent by 2034, mainly from tax cuts, while the lowest-earning 10 percent would see incomes fall by 3.1 percent, mainly from cuts to Medicaid and food assistance.

The law passed with no Democratic votes in either chamber — 51–50 in the Senate, with Vice President JD Vance casting the tiebreaking vote, and 218–214 in the House. According to multiple polls, a majority of Americans oppose it.

Who has benefited so far? The picture is real, if complicated. About 7 million workers claimed the new "no tax on tips" deduction, with a typical deduction of $7,000, according to the House Ways and Means Committee. Some 28 million people claimed the overtime deduction, with a typical deduction of $3,100. Around 34 million seniors claimed a new $6,000 bonus deduction. More than 6 million Americans have opened the new "Trump Accounts" — tax-advantaged investment accounts for children that include a $1,000 Treasury deposit for eligible newborns — according to Treasury Secretary Scott Bessent, who told CBS News the accounts are designed to teach long-term investing.

Tens of millions of working-class Americans have more money in their pockets thanks to President Trump's signature provisions.— Kush Patel, White House spokesman

High-income households and corporations have also seen substantial gains. The law permanently preserved the top individual income tax rate at 37 percent rather than allowing it to revert to 39.6 percent — a benefit that applies mainly to the top 2 percent of taxpayers, or individuals earning over $640,000 and married couples earning at least $768,000, according to the Center for American Progress. The state and local tax deduction was raised from $10,000 to $40,000 for taxpayers earning under $500,000, though it reverts to $10,000 after five years. The law also restored 100 percent bonus depreciation for businesses and made domestic research and development expenses immediately deductible.

The top 1%, in fact, are in line to get $1 trillion in tax cuts from the law over a decade.— Jon Whiten, deputy director, Institute on Taxation and Economic Policy

Amazon, Alphabet, Meta, and Tesla together received $51 billion in tax breaks in 2025, much of it from the new law, according to the Institute on Taxation and Economic Policy, as reported by CBS News.

The sharpest political pain point is Medicaid. The OBBBA is projected to cut roughly $1.2 trillion from the program through 2035, leaving 7.5 million more people without coverage by 2034, according to the CBO. The most significant change adds a federal work requirement to Medicaid — a longtime Republican policy goal. New eligibility checks and the work mandate are expected to increase strain particularly in rural areas, where healthcare infrastructure is already thin.

As a concession to moderate Republicans during negotiations, the final law created a $50 billion Rural Health Transformation Program. Republican senators and their allies have highlighted the fund in campaign ads — Iowa's National Republican Senatorial Committee noted it secures "more than $209 million for rural healthcare in Iowa." But the program does not come close to replacing what rural areas stand to lose: KFF, a nonprofit health policy group, estimates rural areas will lose $137 billion in federal Medicaid funding over a decade. Iowa alone is projected to lose more than $3.8 billion.

There's no doubt that the $50 billion investment for rural health transformation is helpful. But the net effect is probably going to be that the rural health systems will be worse off.— Timothy McBride, health economics professor, Washington University's School of Public Health

Those numbers are now the raw material of competitive campaigns. In California's 22nd District, Democrat Randy Villegas is running against incumbent Republican Rep. David Valadao on the Medicaid cuts, telling CNN that nearly 70,000 people in the district stand to lose healthcare and that local clinics are worried about shutting down. Valadao has said the law will preserve Medicaid long term, with a focus on "seniors, vulnerable children, and disabled Americans." In Iowa's Senate race, Democrat Josh Turek — who uses a wheelchair because of spina bifida — has made Republican Rep. Ashley Hinson's vote for the bill a central issue, drawing on his own experience with the healthcare system.

We're the most impacted in the entire country, where two out of every three of our constituents rely on Medicaid. Almost 70,000 people stand to lose healthcare in our district.— Randy Villegas, Democratic candidate, California's 22nd District

Republicans in swing districts are not running away from the law — but they are working to define it on their own terms. The White House and Republican allies have begun calling it the "Working Families Tax Cut Bill." Democrats have seized on that rebrand as evidence of weakness, pointing to polls showing majority opposition.

We know that it's going to be a robust campaign. I represent one of the top targeted districts in the entire country, and it's on me to go out and sell the merits of this.— Rep. Tom Barrett, Republican, Michigan's 7th District

House Republicans built their entire legislative agenda around a bill that made life measurably harder, hungrier, and more expensive for working families.— Justin Chermol, spokesperson, Democratic Congressional Campaign Committee

The political stakes are compounded by timing: several of the law's most consequential provisions — including new Medicaid work requirements and changes affecting student loan borrowers — do not take effect until the second half of 2026 or 2027, meaning their full impact will arrive just as voters go to the polls. Healthcare advocacy group Protect Our Care is launching a nearly $5 million campaign across more than a dozen key states, including ads, town halls, and a bus tour focused on the cuts.

The OBBBA also expands work requirements for SNAP (food stamps) recipients and shifts some program costs to states; increases ICE funding from $10 billion to more than $100 billion by 2029; allocates $150 billion in new defense spending and $150 billion for border enforcement; raises the debt ceiling by $5 trillion; and phases out clean energy tax credits from the Biden-era Inflation Reduction Act while promoting fossil fuels. It also repeals a tax on firearm silencers and imposes a 1 percent tax on remittances.

The nonpartisan Bipartisan Policy Center offered a measured summary of the law's dual nature: many of the tax cuts are "pretty squarely targeted at middle-class taxpayers," while "many provisions in this bill primarily benefit the wealthy" — a tension that both parties are now trying to turn to their advantage before November.

Both can be true.— Andrew Lautz, director of tax policy, Bipartisan Policy Center

Why it matters — The OBBBA's tax cuts and safety-net reductions are now simultaneously hitting household budgets and campaign trail arguments, making it the central issue in the competitive races that will determine control of the House in November 2026.

Sources differ on Whether the OBBBA protects or harms Medicaid: The law will preserve Medicaid long term for those who truly need it most: seniors, vulnerable children, and disabled Americans. (cnn.com (Rep. David Valadao)) vs Almost 70,000 people stand to lose healthcare in California's 22nd District alone; local clinics are worried about shutting down. (cnn.com (Randy Villegas))

Sources differ on Primary beneficiaries of the law's tax provisions: Many tax cuts are squarely targeted at middle-class taxpayers. (cbsnews.com (Bipartisan Policy Center)) vs Many provisions primarily benefit the wealthy; the top 1% are in line for $1 trillion in cuts over a decade. (cbsnews.com (Institute on Taxation and Economic Policy))

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