The bill includes an increase to the standard deduction claimed by most taxpayers, rate reductions for most U.S. households, and a partial version of Trump’s plan to end taxes on tipped wages, among many other provisions.
While last-minute changes to the bill text makes precise estimates impossible, the legislation appears on track to cut Medicaid by about 18 percent and the Supplemental Nutrition Assistance Program (SNAP) by roughly 20 percent, according to estimates based on projections from the nonpartisan Congressional Budget Office.
Previously, the biggest recent cut to food stamps was a roughly 14 percent cut approved by Congress during President Bill Clinton’s administration in the 1990s, according to Bobby Kogan, a senior policy analyst at the Center for American Progress, a center-left think tank. (Food stamp benefits also sharply increased, and then fell, after the expiration of covid benefits.)
The biggest prior cut to Medicaid was during President Ronald Reagan’s term in the 1980s, when Congress and the White House approved a roughly 5 percent reduction to the federal health insurance program that primarily benefits low-income households during his first two years in office, Kogan said.
The Congressional Budget Office has estimated that the Senate tax bill will lead to roughly 12 million fewer people receiving Medicaid and more than 2 million fewer people receiving food stamps.
“This is not only the biggest ever - it’s by a mile the biggest ever,” Kogan said. “You can very safely say this is the biggest cut to programs for low-income Americans ever.”
The legislation achieves these steep reductions by imposing a slew of new requirements and restrictions on low-income Americans who rely on government assistance, although it includes some revisions sought by nonpartisan experts as well.
On Medicaid, the bill institutes new federal work reporting requirements for the first time in the program’s history - forcing millions of people to regularly prove they are working at least 80 hours a month to keep their health insurance. The bill provides exemptions for certain groups of people, including those who are pregnant, some caretakers and those with disabilities.
But it also imposes burdensome paperwork requirements that experts say states are ill-equipped to take on, and they warn that both those who are meeting the requirements and who qualify for exemptions could lose coverage because they will struggle to submit proper documentation.
The bill also mandates that people just above the federal poverty line begin paying out of pocket for Medicaid services, such as some doctor’s visits or lab tests. States would be allowed to charge these enrollees up to 5 percent of their income in cost-sharing - a fee that could amount to hundreds of dollars annually.
While Democratic-led states might opt for modest co-pays, Republican-led states could impose substantially higher fees, potentially pricing out many low-income residents, experts said.
On food stamps, the bill rolls back decades of long-standing policy by tightening work requirements. Parents of children have generally been exempt from work rules, but under the new proposal, single mothers of teenagers as young as 14 would be required to work or lose benefits.
The bill also raises the upper age for able-bodied adults without dependents who are subject to work requirements from 49 to 64, sweeping in millions of older Americans previously shielded from the rules.
Additionally, it would make it harder for states to waive work requirements during times of high unemployment, effectively limiting assistance unless a generationally severe recession hits.
The legislation also changes how poverty and household budgets are calculated for the purposes of food stamp eligibility, potentially reducing benefits for millions.
