Now the Reconciliation Bill Passed, What is Next?
Issue Brief
August 2025
Download the "Now the Reconciliation Bill Passed, What is Next?" Issue Brief
Its official title is the “One Big, Beautiful Bill Act” (OBBBA) but that title
does not accurately describe the legislation. It is branded as a way to
cut wasteful government spending. In reality, the OBBBA provides massive
tax breaks to corporations and extremely wealthy families by severely
reducing federal investments in programs that provide basic needs to
individuals like health care and food assistance. At a time when family
budgets are stretched to cover rising costs of groceries, healthcare,
student loans, transportation, rent and more, Congress chose to force
families to choose between basic needs instead of supporting them.
Almost every community will suffer negative impacts of this bill in at
least one area of their lives. The effects will be felt at dinner tables,
schools, hospitals, and at work. Older adults, families with young children,
student loan borrowers and prospective social workers, small business
owners, and families of immigrants are just some of the communities
who will feel the effects most acutely.
Older Adults
For those over 65, the OBBBA will decrease access to Medicaid,
Medicare, Health Insurance Marketplace plans, and SNAP, while
weakening the Social Security program and further marginalizing older
immigrants and refugees. These changes will be made even harder to
navigate as they will be implemented at different times with different
rules for each program change over the next three years.
According to the AARP, more than 11 million adults 50 and older rely
on SNAP to keep nutritious food on the table, and more than 17 million
adults in the same age group rely on Medicaid for essential health care
like affording prescription medications, long-term care, and routine doctor
visits. New work requirements will severely limit benefits for Medicaid and
SNAP for adults up to age 64. Dependents will be required to work,
volunteer or attend training to apply for and maintain food assistance.
In addition, the new law’s tax savings provisions do not actually help
older adults. These provisions will not provide tax benefits to lower-income
workers, including many caregivers or older adults because few low-wage
workers receive tips and those who do, do not pay federal income tax.
In fact, exempting tips from taxation could cause workers to lose income
and through that, eligibility for crucial tax credits.
In terms of the social security tax deduction, this bill does not—as the
current administration states—cut taxes on Social Security. Instead, it
lowers taxable income for all income tax purposes. About half of all
recipients will pay at least some income taxes on their benefits,
meaning they will face higher tax liability than they would if benefits
were not taxable.
The OBBBA also accelerates the insolvency of Social Security and
Medicare programs. According to an
analysis from the Office of the
Chief Actuary
at the Social Security Administration, implementation of
the OBBBA would “result in net increased program cost.” The report
stated that “the revenue from income taxation of Social Security benefits
is directed to the Social Security and Medicare trust funds” which means
that implementation of the OBBBA will affect the financial status the Social
Security trust funds.
According to the Committee for a Responsible Federal
Budget
, once Social Security becomes insolvent, benefits would shrink for
all recipients by 24 percent while Medicare hospital benefits would be
reduced by about 11 percent.
Families with Young Children
The OBBBA will hit families with young children where it hurts, in their
budget. According to a study by
Lending Tree, the estimated cost of raising
a child has risen 19 percent between 2019 and 2023. Inflation is forcing
families to make difficult choices in how and where to stretch their
paychecks.
In health care, over the next decade, changes to Medicaid and
the ACA marketplace will impact access and services offered to all
individuals in the community, including those with private insurance.
This bill contains the largest cut to Medicaid in the program’s history.
Nearly $1 trillion in cuts to the program along with attacks on the
Affordable Care Act (ACA) Marketplace mean 17 million people will
become uninsured over the next 10 years. Congress is creating a situation
where hospitals and medical professionals will be unable to keep their
doors open and serve their communities. With changes to the ACA
Marketplace, those who are cut from Medicaid will not have affordable
options for health care coverage. Reducing adult access to Medicaid will
also affect children.
We know that when parents and caregivers have
health insurance, their children are more likely to be insured and to take
advantage of preventative health care services. Healthier families mean
healthier communities.
Families are also going to feel the $186 billion in cuts to the Supplemental
Nutrition Assistance Program (SNAP). Millions of working families rely on
SNAP to provide healthy food for their kids. OBBBA not only imposes work requirements that are
proven to act as a barrier<./a> to services instead of
helping to raise employment numbers, but also puts the future of SNAP in
trouble thanks to changes to programmatic cost sharing. States have
always been responsible for 75 percent of the administrative costs for
SNAP,
but this bill shifts 15 to 25 percent of food costs to states for the
first time in history. No state can make up the difference of lost federal
investment, so some states will be forced to drastically reduce SNAP
services while others will opt out of the program altogether.
The cuts to SNAP will not only hurt families who rely on the program, but
more than 27,000 grocery stores are at risk of financial instability due to
their reliance on SNAP recipients.
The OBBBA also will eliminate the Child Tax Credit (CTC) for many families.
Congress chose to withhold the benefit from 17 million children by not
ensuring it is available to children in families who don’t make enough to
pay taxes. The new CTC structure also penalizes children from receiving
any credit due to their parents’ immigration status.
Student Loan Borrowers and Prospective Social Workers
At a time when the cost of college and professional graduate degree
programs are at an all-time high and the need for mental health
professionals and educators is critical, Congress cut $300 billion to higher
education and financial aid programs as well as student loan repayment
programs. The OBBBA will make it harder for millions of Americans to
afford to start or continue going to college.
Borrowers who are currently paying back their loans will also see changes
to their repayment options. Many people will be forced out of the SAVE
plan, where their loans have been in forbearance, and severely reduce the
number of income-driven repayment options available. This will
spike
monthly student loan payments
for millions of families who live paycheck
to paycheck.
This bill also eliminated the Graduate PLUS loans and as of July 1, 2026,
graduate students will no longer be able to apply for this federal assistance.
The maximum PLUS loan amount is the cost of attendance minus any other
financial assistance, and it helps 1.8 million individuals afford graduate
programs. In the midst of a growing mental health crisis, Congress chose
to eliminate one pathway to ensuring educated professionals will be
available to support their communities’ needs. Many social work students
rely on Graduate PLUS loans to finance their graduate degrees.
Another way this bill impacts future social workers is by endangering their
ability to apply federal student loans to programs based on low earning
outcomes. This provision, entitled the
“do no harm” standard, seeks to
prohibit the use of federal loans for paying for undergraduate degree
programs where the majority of former students earn less than the median
high school graduate in the same state, as well as for graduate programs
where the majority of former students earn less than the median
bachelor’s degree recipient in the same field in the same state. Judging
programs by their earning potential will impact helping professions such
as social work. While NASW has continued to advocate for increasing pay
rates at the state and federal level, Congress is specifically targeting these
professions instead of offering solutions to increase pay to these roles that
are critical to healthy communities.
Immigrant Families
The OBBBA seeks to further destabilize immigrant families and
communities.
Not only does it strip many lawfully present immigrants from
access to health insurance and nutrition assistance
, but it also cuts off
access to the CTC by punishing citizen children for their parents’
immigration status, and balloons detention and enforcement efforts that
dehumanize and endanger immigrants—regardless of immigration status,
family connection, and incorporation into community.
According to the National Immigration Law Center, the OBBBA gives the
current administration maximal flexibility to use the expanded funds with
little oversight. It is clear that the current approach to immigration has
been violent and fear-inducing. With billions more available in funding, the
Trump administration will continue to rip parents from their children and
avoid due process to indefinitely detain individuals in inhumane conditions.
Looking Ahead
It is clear that no one is safe from the negative effects of this bill. As
NASW works with coalition partners and members of Congress to
make legislative changes, members and chapters will be leading the
fight in the states. Cuts to federal investments for state run programs
mean state budgets have to either make up the difference or cut
programs and services.
Social workers are trained to see the interconnected outcomes of massive
bills like these and how individuals, families, and communities will need
strategic support and opportunities to resist the worst impact. When basic
human rights are threatened, social workers have a responsibility to seek
out the resources available and connect them with the people who need
support. NASW will continue to fight for and support individuals, families,
and communities.