The One Big Beautiful Bill (OBBB) act is framed as a bold economic reform, but it prioritizes political presentation over structural strength. Its approach expands deficits, weakens safety nets, and lacks a credible growth plan, trading long-term resilience for short-term appeal.
On May 22, 2025, the House of Representatives narrowly passed the OBBB act, a sweeping legislative package introduced by President Donald Trump that combines tax cuts, entitlement restrictions, border security spending, and a significant increase in the debt ceiling. While marketed as a signature achievement, the bill’s structure reflects a patchwork of politically driven provisions rather than a coherent policy response to the country’s economic headwinds.
Tax Relief That Lacks Structural Justification
The legislation’s tax provisions expand the 2017 Trump tax cuts and add new exemptions, such as removing taxes on tips, overtime income, and auto loan interest. While these reforms are packaged as middle-class relief, they disproportionately benefit high-income households. Analysts from the Tax Policy Center project that 60% of the tax benefits would accrue to the top 20 percent of households. Meanwhile, although politically symbolic, the relief aimed at service-sector workers is too modest to have a materially positive impact on household financial health or spending power.
More critically, the OBBB act’s tax changes are entirely unfunded. The congressional budget office (CBO) estimates that the combined fiscal impact of these provisions will increase the federal deficit by $2.4 trillion over the next decade. With interest costs on the US debt already rising, such a structural imbalance undermines financial credibility. “Both the house and senate have come up with plans to pass tax cuts and defense and border security spending increases without requiring equal amounts of offsets,” said Maya MacGuineas, president of the committee for a responsible federal budget. Without an accompanying framework for growth or revenue recovery, the legislation represents a fiscally reckless bet with limited upside.
Entitlement Restrictions Framed as Efficiency
The bill introduces stricter work requirements for two major safety net programs: Medicaid and the supplemental nutrition assistance program (SNAP). For Medicaid, the public health insurance program for low-income individuals, the bill requires able-bodied adults without dependents to work at least 80 hours per month to maintain eligibility. For SNAP, which provides food aid to qualifying households, the OBBB act raises the age threshold for mandatory work participation from 54 to 64 and applies similar hourly requirements. Although framed as measures to promote self-sufficiency, these changes disproportionately impact unstable or low-wage workers, many of whom already face structural barriers such as caregiving duties, health issues, or limited access to consistent work.
These policies will result in minimal gains in employment and significant reductions in program enrollment. The legislation also introduces additional administrative burdens on low-income households and state agencies, with little evidence of fiscal savings. CBO estimates that nearly 10.9 million people could lose Medicaid coverage under the new requirements. At the same time, the Center on Budget and Policy Priorities warns that hundreds of thousands will likely be cut off from food assistance. These changes reflect a policy orientation that favors symbolic enforcement over economic inclusion, increasing the likelihood of deeper social disparities in the long term.
Border Security Spending with Limited Returns
The OBBB act allocates $150 billion toward border security infrastructure, surveillance, and expanded enforcement. While national security is a legitimate priority, this level of spending lacks a clear cost-benefit framework. A Border Patrol memo revealed that nearly one-third of border surveillance cameras were non-functional due to technical failures. This raises serious concerns about the operational effectiveness of existing infrastructure. Rather than addressing operational gaps, the bill prioritizes highly visible deployments with limited oversight or measurable impact. In its current form, the spending risks are more symbolic than the strategic ones.
Undermining Fiscal Credibility and Investment Confidence
Perhaps the most alarming component of the legislation is its proposal to raise the federal debt ceiling by $5 trillion. Although increasing the ceiling is often necessary to maintain government operations, pairing it with unfunded tax cuts and entitlement restrictions signals a disregard for long-term fiscal health. This expansion comes without a roadmap to restore fiscal balance. It increases the debt burden while stripping away revenue and making the federal budget more vulnerable to economic shocks.
Moreover, the OBBB act introduces provisions that are expected to materially disrupt investment flows. Section 899, informally known as the revenge tax, empowers the US government to levy a tax of up to 20% on passive income from US assets held by residents of countries with tax regimes deemed discriminatory. While framed as reciprocal enforcement, the measure risks reducing global demand for US securities, raising borrowing costs, and creating tension with key trading partners.
Conclusion: Populist Packaging That Lacks Policy Depth
The OBBB act reflects a broader shift toward headline-driven policymaking. Yet, beneath the surface, it offers no roadmap for strengthening American competitiveness in critical areas such as education, infrastructure, or technological innovation. It creates the illusion of bold leadership while weakening the very systems that support long-term prosperity. Without recalibration, this legislation will likely erode the fiscal and social resilience that underpins American stability.
