Photo from Kent Nishimura/Bloomberg.
On July 4, 2025 President Donald Trump signed the One Big Beautiful Bill Act into law. It quickly became arguably the most consequential statute of his administration. The bill cleared Congress on near party-line votes. Supporters describe it as a long-overdue fiscal reset, while critics are now calling this bill a “reverse New Deal” as the Act restructured federal entitlements, tax benefits, immigration enforcement, and environmental regulation. The bill rewrites nearly a century of doctrine about the federal government’s role in social welfare, moving the nation in a direction towards privatization.
The most dramatic consequence of the OBBBA has been the way it has impacted Medicaid and Affordable Care Act subsidies. The Congressional Budget Office projects that nearly 10 million people will lose health insurance, and approximately 7.5 million disenrolled from Medicaid due to new work requirements. This also includes an additional 2 million losing ACA subsidies. Due to the tax changes, long term care facilities have been at an increasing risk of closing. It is estimated that more than 600 homes may close in the next year, with many rural areas being hit the hardest. Researchers at Brown University have warned that over 300 of the facilities face immediate closure and over 700 are at risk long-term. Many state attorneys general have already announced plans to challenge the new Medicaid rules in court, including New York, Illinois, Rhode Island, and Washington State.
The law’s future may depend on the courts especially. There are many states that are preparing to challenge the law based on NFIB v. Sebelis (2012), when the Supreme Court ruled that Congress could not constitutionally coerce states into Medicaid expansion by threatening to cut federal funds. Attorney generals are now arguing that the OBBA’s work requirements are virtually identical to the case in Sebelis, leaving states with no other choice but to comply.
While OBBBA expanded some tax benefits that are family-oriented, it also withdrew means-tested supports. Child tax credits have increased and parents of newborns now receive access to federal savings accounts. However, this comes alongside cuts to SNAP and Medicaid, harming low-income households. As a result, the polling has shown that the approval rating for the bill dropped below 40 percent nationally.
These impacts are especially felt in the rural communities. Almost 24 percent of people in rural communities are enrolled in Medicaid, with about 21 percent of those in urban areas. Given their smaller populations than urban populations, this means that rural households will disproportionately be affected. Over 338 rural hospitals across the US are at risk—including closure or service reductions. The largest number of hospitals affected comes from 35 hospitals in Kentucky, 33 in Louisiana, and 21 in Oklahoma. Rural hospitals are already struggling as, in 2023, there were 50 fewer hospitals than in 2017 due to a lack of accessibility. Rural hospitals are also often the largest local employers, which even further destabilize local economies. Just these small percentage shifts in Medicaid enrollment has a substantial consequence in rural America.
The OBBBA’s environmental provisions have also had a significant impact as it removed significant amounts of the Inflation Reduction Act’s clean energy incentive, consequently halting federal support for renewable projects. It has also notably extended subsidies for fossil fuels. Environmental advocates argue that the shift actually locks the US into higher emission for the coming years, completely undermining its ability to meet international climate commitments such as the Paris Agreement and Net-zero goal.
The fossil fuel industry contributed more than $100 million to lawmakers backing the bill, which has raised many questions about unbridled influence. Many environmental groups warned that this could cost thousands of clean energy jobs and slow, and even reverse, the United States’ progress toward decarbonization. Analysts also noted that the decision is not just about the emissions but also about economic competitiveness. The US risks surrendering its leadership in renewable technologies to competitors like China. By doing this, the US will weaken its position in climate diplomacy and limit its influence over the global energy market. This is especially important as it is constantly expanding.
In the first 60 days, the OBBBA has already had broad consequences by reshaping health care access, restructuring tax benefits, and significantly weakened environmental protections. Americans are confronting hospital closures and crumbling safety nets as the effects of the OBBBA begin to take form. The OBBBA is leaving many wondering whether this result marks a dangerous precedent allowing single-party majorities to dismantle the social contract in a mere few months.
The speed of the OBBBA’s impact highlights just how much can change in a government under partisan majorities. In two months, decades of policy have been altered, or completely undone. This bill not only reflects the shifting fiscal priorities of the government and the transforming political landscape of the country, but also a deeper ideological shift in the federal government’s role in everyday life.
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