Republicans Promote Tax and Spending Law as Midterm Campaign Centerpiece/ TezzBuzz/ WASHINGTON/ J. Mansour/ Republicans are promoting President Donald Trump’s major tax and spending law as they campaign to retain control of Congress. The law extended tax breaks and increased defense and immigration funding while reducing projected spending on food assistance and healthcare. The Congressional Budget Office estimates that the legislation will add $3.4 trillion to federal deficits over a decade.
Quick Look
- The law extended Trump’s 2017 tax provisions and introduced additional deductions.
- Treasury says millions claimed benefits involving tips, overtime, children and seniors.
- Tax savings have generally been larger for higher-income households.
- SNAP participation has fallen by approximately 4 million people.
- CBO estimates Medicaid changes will leave more than 7 million people uninsured.
- The measure provided approximately $350 billion for defense and homeland security.
- Immigration arrests reached nearly 51,000 in August.
- CBO projects the law will reduce revenue by $4.5 trillion and spending by $1.1 trillion.
- Its estimated net deficit increase is $3.4 trillion over the 2025–2034 period.
- Total federal debt has reached approximately $40 trillion.
Deep Look
Republicans Promote Signature Law Before Midterms
WASHINGTON — Republicans are presenting their signature tax and spending law as a central campaign accomplishment while seeking to retain their congressional majorities in the midterm elections.
President Donald Trump signed the package, commonly called the “One Big Beautiful Bill,” into law in 2025. Democrats opposed it and refer to it as the “Big Ugly Bill.”
A year after its enactment, the law has produced different effects across the federal government and among households. It extended and expanded tax benefits, imposed new eligibility requirements for assistance programs and provided substantial funding for defense and immigration enforcement.
House Speaker Mike Johnson has described the legislation as an example of the “common sense” policies Republicans would continue pursuing if voters preserve their majority.
“Shamefully, not one Democrat voted for it,” Rep. Derrick Van Orden, R-Wis., said during the opening night of the Republican convention in Dallas.
Tax Provisions Reach Millions of Filers
The legislation permanently or temporarily extended provisions from Trump’s 2017 tax law that otherwise would have expired at the end of 2025.
It also introduced tax benefits covering tipped income, overtime earnings and certain automobile-loan interest payments. Other provisions increased the standard deduction and child tax credit, created an additional deduction for qualifying seniors and established investment accounts for children known as Trump accounts.
“Let me hear you if you’re benefiting from those tax cuts President Trump fought for,” House Majority Leader Steve Scalise, R-La., told the convention audience.
The crowd responded with cheers.
According to Treasury Department figures cited in the article:
- Approximately 7.5 million filers claimed the tipped-income tax benefit.
- About 29 million people claimed the overtime benefit.
- Roughly 35 million used the enhanced deduction for seniors.
- Nearly 40 million families claimed the larger child tax credit.
Benefits Are Unevenly Distributed
The law’s tax provisions produced average estimated savings of approximately $2,300, according to the nonpartisan Tax Foundation. Actual tax refunds increased by about $350 on average, an increase of roughly 11%.
Garrett Watson, the foundation’s vice president of federal tax policy, said taxpayers may not notice the full estimated benefit “because it’s just continuing what was already the case.”
Many of the law’s provisions prevented existing tax benefits from expiring rather than creating entirely new savings.
“It was avoiding a tax hike,” Watson said, which differs from “here’s additional relief.”
Watson said that costs associated with Trump’s tariffs and other administration policies have largely offset the tax gains. The benefits also have varied by income level, with households earning more generally receiving larger dollar reductions.
SNAP Enrollment Declines
The legislation introduced stricter work requirements for recipients of the Supplemental Nutrition Assistance Program, or SNAP, and Medicaid.
The changes are projected to reduce federal food and healthcare spending by more than $1 trillion as enrollment declines, according to the Congressional Budget Office.
Federal data compiled by the Center on Budget and Policy Priorities indicates that approximately 4 million fewer people are receiving SNAP benefits. Participation has declined in every state.
In at least 13 states with publicly available information, more than 800,000 children have stopped receiving food assistance, according to the organization.
SNAP already required some recipients to work. The law extended that requirement to additional groups, including able-bodied adults without young children through age 64.
Medicaid Work Requirements Begin
Medicaid previously had no nationwide work requirement. Under the new law, many recipients must work, perform community service or participate in an educational program for at least 80 hours each month.
Some states began applying the requirement in 2026, but most are scheduled to implement it in 2027.
CBO estimates that more than 7 million people will become uninsured because of the Medicaid changes. Medicaid covered approximately 66.4 million people as of May 2026, according to federal enrollment data.
The law provides a $50 billion fund intended to help rural hospitals manage the effects of the funding reductions.
Republicans say the eligibility changes are intended to eliminate what they describe as “waste, fraud and abuse” and encourage employment. Advocates for SNAP and Medicaid respond that many recipients who can work already have jobs but rely on federal assistance because their earnings do not cover basic expenses.
CBO Assesses Distributional Effects
CBO concluded that the combined tax and benefit provisions would shift federal resources among income groups.
“Resources will decrease for households toward the bottom of the income distribution,” the budget office said, “whereas resources will increase for households in the middle and toward the top of the income distribution.”
That conclusion incorporates both sides of the legislation: reductions in taxes and reductions in government benefits.
Lower-income households generally receive less benefit from income-tax reductions because they owe less federal income tax, while changes to SNAP and Medicaid have a greater effect on people who rely on those programs.
Defense and Homeland Security Receive Additional Funding
The legislation supplied approximately $350 billion to the Defense and Homeland Security departments.
The Pentagon received an additional $150 billion for military programs and projects. Defense Secretary Pete Hegseth subsequently requested more money from Congress to help finance the continuing war with Iran.
The Department of Homeland Security received approximately $175 billion, primarily to expand immigration enforcement, detention and deportation operations.
Immigration and Customs Enforcement has increased hiring, while state and local police agencies have accessed additional federal funds to cooperate with ICE.
Immigration Arrests Reach New Highs
Immigration arrests rose to nearly 50,000 in July. Homeland Security reported another record in August, when arrests approached 51,000.
The increase followed a temporary slowdown after federal law enforcement officers killed Renee Good and Alex Pretti while they were protesting immigration enforcement operations in Minneapolis.
The expanded enforcement effort has resulted in more arrests and deportations. Some people have also died while detained or during the broader enforcement process.
Law Adds $3.4 Trillion to Projected Deficits
The Congressional Budget Office estimates that the law will add approximately $3.4 trillion to cumulative federal deficits between 2025 and 2034.
CBO calculates that its tax provisions will reduce federal revenue by approximately $4.5 trillion. Spending reductions—concentrated heavily in food and healthcare programs—will offset about $1.1 trillion of that amount.
The estimate excludes some potential macroeconomic effects but reflects the enacted legislation relative to CBO’s previous baseline.
Federal deficits are already large by historical standards. CBO projects a fiscal 2026 deficit of approximately $1.9 trillionrising to $3.1 trillion in 2036 under current policy.
The country’s accumulated federal debt has reached approximately $40 trillion.
Law Becomes a Midterm Campaign Test
Republicans are emphasizing the law’s tax reductions and enforcement funding as they campaign to retain the House and Senate.
Democrats are focusing on lost food and healthcare benefits, the distribution of the tax provisions and the projected increase in federal deficits.
The law’s effects therefore differ depending on a household’s income, tax liability, eligibility for federal assistance and interaction with the programs it changed. Its political impact will be determined by how voters assess those competing outcomes in the midterm elections.
More on US News