🌊 What the Big Beautiful Bill Cuts

Did someone forward you this? Subscribe here free!

By Max Frost

It was taken for granted that Republicans would extend the Tax Cuts and Jobs Act (TCJA), the multi-trillion-dollar tax cut President Trump signed during his first term. Due to expire at the end of 2025, Republicans had promised to extend it and would not consider allowing a tax hike. 

Yet Trump and other Republicans wanted to go further than just extending the TCJA. On the campaign trail, Trump began promising new tax cuts, including no taxes on tips, social security, or overtime; more defense spending; and more border spending. Once negotiations began in the House, Congress members began making their own demands for spending boosts and tax cuts. And then in the Senate, the same happened again. 

By the time the dust settled, the Big Beautiful Bill (BBB) had ballooned into the most expensive reconciliation (a type of spending) bill in history. 

But who would pay for it?

When Congress passes a spending bill, it has to provide “pay-fors,” or ways to offset the bill’s costs. This can be through taxes or spending cuts. Whatever chunk of the spending that the “pay-fors” don’t offset must be funded by government borrowing, increasing the deficit.  

As Republicans piled on their cuts and spending priorities, they demanded that their unfavored programs be cut as “pay-fors”: Green energy projects, electric vehicles, insurance subsidies, university endowments – and welfare. It was that last item, including SNAP (food stamps) and Medicaid, that became the most contentious.

By the time President Trump signed the BBB on Friday, some Republicans were warning that the BBB’s cuts would cost Republicans control of Congress in 2026 and potentially haunt the party for years to come, while Democrats were claiming that the bill would “kill people.”

But what was actually cut? And who will be affected? That’s the subject of today’s deep-dive.

Let’s start with Medicaid. 

A fact sheet put out by President Trump last week read: 

The reality is more complicated.

Editor’s Note

Thank you all for trusting us with this news today, and welcome to the many new readers who signed up for this BBB series! For those who don’t know, this newsletter switches between paid and free versions. We hope you’ll become a premium member, but even if you don’t, we’ve got news for you.

We’ll follow today’s article with one tomorrow on the economic strategy behind the bill. In the meantime, send us your thoughts: Are these cuts smart or not? Are they worth it to cut taxes, or does it put an unfair burden on America’s most vulnerable? Let us know by replying here. 

And catch up on our latest reporting below:

• What’s Inside the Big Beautiful Bill

• In Appalachia, Concerns about the Big Beautiful Bill

• The NYT’s Ivy League Problem

• Inside JD Vance’s Hometown

• The Great Multiculturalism Debate

Reader replies

Thanks for all the kind words yesterday. Your feedback makes us love what we do even more.

Stacy from Bentonville, AR wrote:

And Heidi wrote:

We’ll be back tomorrow with part three. Stay tuned.

—Max and Max