On July 4, President Trump signed into law the “One Big Beautiful Bill Act” (OBBBA) after passage in the Senate and the US House of Representatives. It continues and expands President Trump’s 2017 tax cuts which disproportionately benefit the rich, cuts basic services like Medicaid and Food Assistance, and adds $4 trillion to the national debt over the next decade.
Though some of the details of the OBBBA were altered in the Senate from its original House-passed version, the overall impact remained largely the same: tax cuts for the rich, little change for the middle class, and punishing cuts for the poor.
Click on the subject areas below to dive deeper into the impacts of the OBBBA.
Taxes
The OBBBA continues the tax changes in the 2017 Tax Cuts and Jobs Act that were due to expire at the end of 2025. These include some policies everyday Mainers benefit from, including a higher standard deduction and lower individual income tax rates across the board.
The bill contains mixed changes to the federal Child Tax Credit, a key tool in reducing child poverty. The OBBBA builds on a 2017 change by further increasing the maximum size of the child tax credit for some families beginning in 2026. However, these benefits are limited for Mainers with the lowest incomes, who continue to be excluded from the full credit. The bill takes the credit away from millions of children who are US citizens or lawful permanent residents, but whose parents are not.
The OBBBA also introduces some temporary new deductions sold as breaks for middle- and working-class Mainers, but which have minimal impact in reality:
- Increasing the standard deduction by $6,000 for each tax filer or spouse age 65 or older in the household. This will only be in effect for tax years 2025-2028. Moreover, it will be of no use to older Mainers with low income who already pay no federal income tax and only has a small benefit for those who have income in addition to their social security income (for example older Mainers who continue to work).
- Exempting overtime income and tipped income from federal income taxes through new deductions. These will only be in effect for tax years 2025-2028, will be more valuable to workers with higher incomes and will only impact a small share of Maine taxpayers. Only 2% of Maine workers regularly receive tips, and only a small share of American workers regularly or occasionally work overtime.
The bill also continues some provisions which expand existing tax breaks for the rich. It temporarily increases the amount taxpayers can deduct in state and local taxes from their federal returns, from the current $10,000 per filer to $40,000 per filer through 2030. This provides virtually no support to most taxpayers, and only helps wealthy individuals with high incomes or expensive homes.
The bill also includes permanent corporate tax breaks that allow large companies to avoid paying taxes and to give their wealthy shareholders bigger dividends instead, in addition to making permanent 2017 changes like lowering the top rate of federal income tax and increasing the amount of money wealthy people can pass on to their children tax-free.
Overall, the richest 1% of Americans would receive an average tax cut of almost $65,000 in 2026, while people in the poorest 20% would receive a tax cut of just $110 (which will be far outweighed by the cuts to safety net programs and other Trump policies like tariffs).
It’s important to remember everyday Americans will not experience the full effect of even these relatively small tax cuts in their paychecks. Since a lot of the bill’s impact comes from continuing the 2017 tax cuts, the amount of new tax savings for working- and middle-class people is even smaller.
By contrast, program cuts (described in more detail below) are new hits to working families that will be felt severely. Analysis from the Yale Budget Lab finds that once tax cuts are offset against program cuts, the bottom 40% of Americans are worse off, on average.
In Maine, the disparity between income groups is less severe because the state is home to fewer ultra-high earners. Nonetheless, the top 1% of Maine households by income level will see an average tax cut of $34,000 in 2026. Those in the middle of the income distribution will see an average tax cut of $1,500 a year, while the poorest Mainers will see an average cut of just $30 a year.
Source: Institute on Taxation and Economic Policy
Medicaid and food assistance
The OBBBA fundamentally changes the structure of the Supplemental Nutrition Assistance Program (SNAP) by requiring states to pay for a share of the benefits for the first time, starting in October 2027. The proportion of benefits a state would be required to pay would vary each year depending on a state’s “payment error rate.” In 2024, Maine’s payment error rate was high enough that it would be required to pay 15% of all benefit costs. Additionally, the state would have to pay a larger share of the program’s administrative costs as it does now (75%, up from the current 50%) beginning in October 2026. Based on 2023 spending data, Maine taxpayers would be liable for:
- An additional $7.3 million in administrative costs each year (starting October 2026)
- An additional $63 million in benefit costs each year (starting October 2027)
In addition to these additional demands on state taxpayers, the OBBBA would directly reduce access to health care and food assistance for tens of thousands of Mainers.
New or expanded work requirements in Medicaid (MaineCare) and the Supplemental Nutrition Assistance Program (SNAP) will impose extra layers of red tape on Mainers with low income, leading to the denial of help even to many who are working but struggle to prove it:
- Expanding the existing SNAP work requirement to include people aged 54-65 and parents of children aged 14 or older will put 10,000 Mainers at risk of losing food assistance. These changes will take place immediately.
- A new work requirement for Medicaid will apply to those in the “expansion group” age 19-64, and while some vulnerable groups will get an exemption, parents of children age 15 or older will be included. These will take effect January 1, 2027. An estimated 34,000 Mainers will lose health care under this change, though the numbers could be as high as 69,000 if the state is unable to accurately match data across safety net programs.
- Americans in the Medicaid expansion group will also be subject to a mandatory “cost sharing” requirement beginning Oct 1, 2028. States will have a lot of latitude to determine the size and format of the cost-sharing requirement, but even if states implement a minimal cost-sharing requirement (for example a $1 per month premium) research shows these requirements lead to loss of coverage and worse access to care.
The act also cuts food assistance significantly by freezing the baseline benefits Mainers experiencing food insecurity are eligible for. By preventing further updates to the “thrifty food plan” that is the basis of SNAP benefit amounts, the value of food assistance to the 170,000 Mainers who receive it will decline over time, as the price of groceries goes up while their benefits remain frozen.
The OBBBA also restricts the ability of states to finance their Medicaid programs through taxing providers, which allows them to draw down extra federal funding while keeping the providers whole. Maine’s current provider tax rates are below the new maximums set by the act, so the state will not lose revenue. It will, however, limit the ability to use these taxes to generate extra revenue in the future.
Meanwhile, by failing to extend the Biden-era higher subsidies for plans bought through the Affordable Care Act (ACA) individual marketplace (CoverME.gov in Maine), the bill will indirectly increase health care costs for thousands of middle-class Mainers in the private insurance market. The bill also contains numerous changes that make it harder to enroll in ACA individual coverage.
Maine’s rural hospitals and other health care providers also face an uncertain future. With tens of thousands of Mainers at risk of losing their health care coverage, hospitals will see lower revenues and higher costs to provide free care for uninsured patients. And while the bill does contain funding to help rural hospitals weather this shift, it is only $50 billion, less than half the $110 billion loss that rural hospitals are set to face nationwide. In Maine, Manatt Health estimates hospitals will lose $1.5 billion in Medicaid revenues through 2034.
Maine’s network of reproductive health care providers will also be hit hard by the OBBBA, which prohibits nonprofit organizations that provide abortions from receiving Medicaid reimbursement. Medicaid dollars were already barred from covering abortion services, but this new provision will stop these clinics from giving other kinds of essential health care to Mainers in the MaineCare program as long as they continue to provide abortion services for one year. The two organizations impacted in Maine are Planned Parenthood and Maine Family Planning. Maine Family Planning operates 18 health centers and 47% of their patients use MaineCare. 27% of the 7,100 Maine-based patients at Planned Parenthood were enrolled in Medicaid in 2024, and the organization faces a $5 million shortfall across its Northern New England clinics. Even patients not enrolled in MaineCare will feel the impact, as the clinics face financial uncertainty with the loss of Medicaid funding.
Immigration
The OBBBA authorizes massive increases in funding for Customs and Border Patrol (CBP) and Immigration and Customs Enforcement (ICE) in order for that agency to carry out President Trump’s “mass deportation” agenda. To date, ICE has already scaled up the number of arrests it makes, and the tens of billions of dollars in additional funding will make it easier for them to continue arresting and deporting individuals with little regard for their legal status, history, or contributions to their community.
At the same time, the act makes it harder for immigrants to obtain authorization to remain in the US and for permission to work. There will be several large hikes in application fees for those seeking asylum, humanitarian parole, and employment authorization.
This two-pronged attack on immigration will not only tear apart families and communities, it will depress our economic growth as Maine loses workers in key sectors. The Economic Policy Institute estimates Trump’s mass deportations could destroy almost 6 million jobs.
For immigrants who remain, access to assistance programs like SNAP and Medicaid is further restricted under the act. People seeking refuge and those granted asylum will no longer be eligible for federally funded SNAP or Medicaid benefits.
An earlier provision which would have tried to force states to drop state-funded Medicaid coverage for some groups of immigrants was removed from the final version of the bill.
Energy
The nearly 900-page bill contains numerous other changes, including repealing many of the clean energy credits in the Inflation Reduction Act. In addition to worsening the effects of climate change, these changes will cost everyday Mainers money and harm our economy. The North American Building Trades Union estimates the end of the credits will kill 1.75 million construction jobs as projects are cancelled. According to Maine Conservation Voters, 15,000 clean energy jobs in the state are at risk.
Additionally, the end of these credits will increase energy costs across the country. Maine households could find themselves spending an extra $305 each year by 2035 as a result.
The consumer credits repealed or phased out include:
- The Energy Efficient Home Improvement Credit, which allowed households to claim up to $3,200 for weatherizing your home or installing a heat pump. Projects installed after 2025 will no longer be eligible for the credit.
- The Residential Clean Energy Credit, which helped people claim up to 30% of the costs of installing solar panels or other energy systems at home. Projects installed after 2025 will no longer be eligible for the credit.
- The Electric Vehicle Credits which helped put zero-emission vehicles in reach for more Americans and help them save money on gas over the long-term. These credits will be unavailable for purchases after September 2025.
- The Clean Energy Production Credit which helped corporations reduce upfront cost of building new solar, wind, nuclear, and hydropower production and storage facilities has been significantly scaled back. Solar and wind power-generating projects will be ineligible for the credit after 2027. For other projects, the tax credit is now restricted for certain foreign-owned companies.
