House Republicans narrowly
passed legislation that would extend President Trump’s tax cuts for most Americans and create new breaks while cementing other conservative priorities. To help offset some of the costs of the president’s agenda, the package also included spending cuts.
The measure, which now
heads to the Senate, scales back
funding for Medicaid and food assistance for low-income people. Smaller groups of people, such as electric-vehicle owners and some student-loan borrowers, could take a financial hit. Here’s a look at who stands to lose out economically if the bill becomes law.
Some Medicaid users
Republicans are proposing to
add work requirements and more frequent eligibility checks for some of the more than 70 million low-income and disabled people who rely on the government health-insurance program. Childless adults without disabilities between the ages 19 and 64 would have to provide documentation that they worked 80 hours a month prior to applying. There are exceptions, including for pregnant women.
It is unclear how many people stand to lose coverage. An earlier estimate from the nonpartisan Congressional Budget Office estimated that at least 8.6 million people would lose coverage by 2034, though that figure didn’t reflect last-minute changes to the bill that moved up work requirements to 2026 from 2029. The earlier estimate included 1.4 million unauthorized immigrants who receive coverage through 14 states and Washington, D.C., that provide it using the states’ and the district’s own money.
Older food-aid recipients
The $286 billion in cuts to the Supplemental Nutrition Assistance program would largely affect two categories of people who rely on the program for low-income households. The bill tightens the existing work requirements by raising the age—to 64, up from 54—of able-bodied people who must work at least 80 hours per month to receive SNAP benefits. Currently, able-bodied people between the ages of 18 and 54 can receive
food assistance for no more than three months within a three-year period unless they are working or enrolled in a work program.
The current work requirement doesn’t apply to caregivers of children under 18, but the House GOP bill would narrow that exception to people caring for a child under the age of seven.
Clean-energy projects
Republicans aim to eliminate a number of climate and infrastructure-related programs created under the Biden-era Inflation Reduction Act. The sunsetting of green-energy tax credits would account for the bulk of savings. The tax benefits have prompted more than $420 billion to be invested in about 750 clean-energy projects since the 2022 law, according to Ceres, a nonprofit advocacy group.
As a last-minute concession to hard-liners, Republican leaders agreed to end certain tax credits for wind- and solar-energy projects earlier, accelerating the phaseout to 2028 instead of 2031 unless projects have invested at least 5% of total cost within 60 days of the law’s enactment. Ending the credits would raise about $500 billion over the next decade, according to a Tax Foundation analysis done before the final changes.
The House proposal also ends renewable-energy credits for rooftop solar projects at the end of the year, seen as a
potentially fatal blow to the industry.
Some student-loan borrowers
The GOP’s proposal seeks to reshape the federal student-loan program. Most cuts would come from the termination of income-contingent repayment plans, including President Biden’s stalled SAVE plan, which lowered monthly payments for many borrowers but cost taxpayers more. The legislation also would tighten Pell Grant eligibility for part-time students and expand it for students in short-term workforce programs.
The bill proposes two new options for loans paid out after July 1, 2026: a standard repayment plan, where borrowers pay a fixed amount each month over 10 to 25 years; or the Repayment Assistance Plan, which would tie payments to the borrower’s adjusted gross income. Republican backers say the new plans would encourage faster repayment and prevent interest from ballooning, while critics say they could result in higher monthly payments and leave borrowers with fewer choices.
EV/hybrid car owners and buyers
Drivers of electric or hybrid cars will face a new annual tax tied to the registration process. Under the bill, owners will pay $250 per year for an electric vehicle and $100 per year for a hybrid vehicle to generate new revenue for the federal Highway Trust Fund, which pays for highway improvements and is funded by a gasoline tax paid at the pump.
Congress hasn’t increased the gas tax in decades or indexed it to inflation, and collections have fallen because cars are more fuel-efficient. For purchasers of electric vehicles, tax credits for buying a used model would end after this year. Credits for new EVs also would largely end, but some manufacturers’ models could still qualify in 2026.
Incoming federal workers
The proposal includes a requirement for new federal civilian employees to choose to either serve as at-will or contribute an additional 5% of their salary toward retirement. CBO estimates that 75% of incoming federal hires will avoid paying the higher retirement contribution and opt for at-will status, meaning that they can be terminated without cause. The proposal also eliminates a retirement benefit for workers who retire before age 62.
State budgets
States will be faced with covering a greater share of costs associated with Medicaid and SNAP.
Lawmakers proposed to restrict the taxes used to finance state Medicaid contributions. Nearly every state uses
provider taxes to raise money to finance Medicaid. Hospitals often tend to get back more in payments than they shelled out for the original tax, which shores up their ability to care for Medicaid patients. The proposal also would reduce funding to states that offer coverage for immigrants in the country illegally. In a move that benefits a handful of conservative states, the proposal would give extra money to states that haven’t adopted a Medicaid expansion.
On food assistance, states will have to pick up part of the tab for SNAP benefits for the first time, along with a bigger share of the administrative costs. The GOP proposal would force states to pay at least 5% of the benefits starting in 2028.
