On a stormy late May night in Washington, lawmakers rushed through a sweeping package of tax cuts, spending changes, and policy rewrites, a single, massive piece of legislation cheekily dubbed the “One Big, Beautiful Bill.” Supporters in the House hailed it as a push to make America “win again,” a kind of legislative “rocket fuel” for the economy. At over a thousand pages long, the bill bundles together many goals: to permanently lock in large parts of the 2017 Trump tax cuts, add new tax breaks for families and workers, slash funding for some social programs, repeal many climate and green-energy incentives, beef up border security, and boost military spending. In essence, it’s a grab bag of policies that reflects the GOP priorities of the past few years, primarily funded by keeping taxes low and rolling back recent spending.
Imagine you are a worker who gets paid in tips or overtime. Under this plan, you’d get a new tax break: those tips and extra hours would be partially tax-free. Families could contribute to “MAGA” child savings accounts and buy down their car loan interest with tax-deductible funds. Meanwhile, middle-class earners would keep the enlarged standard deduction and the lower income tax rates they first got under the Trump cuts. In practical terms, 62% of American taxpayers would avoid any tax increase that would have taken effect if the old 2017 law expired as scheduled. On the other hand, nearly all the significant tax cuts, lowered brackets, no estate tax through $15M, significant deductions for small businesses, would become permanent. And Republicans even agreed to partially restore and lift the cap on state-and-local tax deductions (the “SALT cap”) for many taxpayers, sweetening the deal for people in high-tax states.
The bill carves deep into domestic spending to pay for some of those tax breaks. It tightens welfare programs by, for example, requiring many food-stamp recipients and Medicaid beneficiaries to work or train for a job. It also guts a wide swath of Biden-era climate and clean-energy provisions: tax credits for electric vehicles, home efficiency upgrades, and wind and solar plants would vanish, and new environmental regulations would face more challenging hurdles. In short, the plan would rescind billions in “clean energy” funds and speed up permits for new oil and gas pipelines, effectively favoring traditional energy industries at the expense of green programs. Meanwhile, more money would flow out of Washington for security. The bill authorizes roughly $350 billion in new spending, about $150 billion of that for military hardware (including what some call the “Golden Dome” defense shield) and the rest for Donald Trump’s promised border wall and deportation efforts. Even unrelated bills get absorbed: new fees on certain immigration services, rules to speed up regulatory rollbacks, and higher charges on college savings plans all appear in the mix.
In summary, according to the Congressional Budget Office’s calculations, these changes would shrink the social safety net by millions while adding trillions of dollars in debt. The nonpartisan CBO estimates that 8.6 million more Americans would be uninsured and 3 million fewer would receive food stamps under the proposed changes. The same CBO report predicts that extending and enlarging these tax cuts would reduce federal revenues by about $3.8 trillion over ten years, even counting in the economic growth they might spark. By contrast, the spending restrictions would only save about $1 trillion. In the end, resources on average would drop for the poorest households while rising for the wealthiest, according to the CBO. In other words, independent analysis warns, this “Big Beautiful Bill” essentially shifts money upward even as it borrows heavily to do so.
Free-market advocates and Trump-aligned economists cheer the package as a growth engine. White House economic adviser Kevin Hassett predicted on television that once new trade deals and tax certainty arrive, the U.S. economy will see a “liftoff,” reaching growth “way north of three percent” in late 2025, maybe even above four percent. On Fox Business he declared that with these policies, “cutting spending, deregulating” and boosting supply-side incentives, “we’ve got every reason in the world to believe we’re going to have the best economy on Earth.” Other pro-growth analysts point out that the Tax Foundation finds a roughly 0.6% long-run boost to GDP from the tax plan. They also argue that preventing the scheduled expiration of tax cuts will leave most families better off and that the added “take-home” pay could, in theory, spark more investment and hiring. Even Moody’s Analytics mentioned in 2017 that making the old Trump tax law permanent should support households’ disposable income (though with a caveat on debt). The overall message from the pro-bill side is that lower taxes and looser rules will pay for themselves by expanding the economy.
But many economists push back. Budget watchdogs warn that the net effect is far from free lunch. For example, the Penn-Wharton Budget Model projects that the bill would add about $3.2 trillion to the federal deficits over ten years. The Committee for a Responsible Federal Budget, a deficit hawk group, similarly estimates roughly a $3.3 trillion ten-year deficit increase (rising to over $5 trillion if temporary tax breaks are later extended). Moody’s investors service calculated that simply extending the old tax cuts would by itself add around $4 trillion to the deficit. As Steve Ellis of the nonpartisan group Taxpayers for Common Sense bluntly puts it, “simple math” shows nearly $3 trillion in added debt. In practice, that means more borrowing, which even conservative experts worry could raise interest rates. Bond market economist Ed Yardeni, the original “bond vigilante,” warns that investors are watching this fiscal path closely. He says if Congress delivers “excessive” deficits, markets “could react adversely” to force a change. Michael Goosay, a Wall Street portfolio chief, says that if foreign buyers lose confidence in U.S. debt, long-term rates could creep up, making mortgages and loans pricier.
Inflation is another flashpoint. Critics note that this proposal comes amid already high prices; adding stimulus now could overheat the economy. A March study by the Penn-Wharton Budget Model (sponsored by Penn’s Engelberg Center) found that these tax cuts would likely keep inflation and interest rates higher than they otherwise would be, mainly by boosting spending power for wealthy households. Federal Reserve officials have warned separately that more fiscal stimulus on top of Trump’s tariffs could “largely” be “offset by more inflation” and higher borrowing costs. In fact, during a House debate, one Republican admitted privately that the bond-market skepticism vindicated worries that the fiscal outlook had become “unsustainable.”
Some economists also criticize the bill’s fairness and structure. Center for American Progress fellow Christian Weller (an economist at UMass Boston and formerly at the IMF) argues that permanently extending the 2017 tax cuts mainly for the wealthy “will blow the lid off federal budget deficits” and that “trickle-down” tax policies generally fail to spur lasting growth. In his view, giving big breaks to corporations and affluent families while cutting programs for the poor amounts to a massive redistribution upward. Indeed, analysis by Tax Foundation economists admits the package would leave the tax code “more complex” by keeping only some pro-growth rules and sunsetting others, meaning it likely leaves some growth “on the table.” Meanwhile, advocacy groups point out that the poorest Americans stand to lose: an Economic Policy Institute analysis (citing CBO numbers) found that under the changes low-income households would face higher taxes and fewer benefits. At the same time, top earners get a tax windfall. As House Democrats warned, those at the bottom of the income scale could see their after-tax resources decline while the wealthiest 1% gain the most.
In short, the “Big Beautiful Bill” has united believers on both sides. Its backers, supply-siders, and Trump allies tout the growth boost and “winning” narrative. Many mainstream economists and budget experts, however, highlight red flags: massive deficits, potentially higher inflation, and interest rates, and a tax code skewed toward the wealthy. As one candid Republican put it during the debate, calling the differences of opinion into sharp relief, “we’re going to have the best economy on Earth, and we’re going to have the best debt on Earth too,” implying that strong growth would allegedly offset the debt. But others counter that even a booming economy might not entirely cancel the price of extra borrowing, a point underscored by Moody’s recent U.S. credit downgrade (citing the very deficits this bill would deepen). At the end of the day, the “One Big, Beautiful Bill” is both literal and ironic: it is indeed big and contains something for many interests, and beautiful only if you share its ideology. Economists of all stripes will watch closely as this gamble on taxes, spending, and deregulation moves into law, some expecting a rocket ride, others bracing for turbulence.
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