OP-ED: ‘Big, beautiful bill’ exacerbates economic inequality
The “Big, Beautiful Bill” that just became law is a horrendous piece of legislation; the main thrust of the bill is that it cuts services to low-income Americans (SNAP and Medicaid) to provide tax cuts to the wealthy. If the wealthy were struggling, that would be a benefit. But since 1975, we’ve seen a transfer of $80 trillion from the bottom 90% of society to the top 1% (according to a study from the non-partisan Rand Corp). This bill exacerbates economic inequality.
If that were not bad enough, the bill also undoes a lot of the climate change policies of the Biden Administration. These policies created American jobs in the green energy sector and helped us expand energy production in an environmentally friendly way. Donald Trump hates renewable energy: “I have never seen a wind farm in China,” implying that if they worked so well, surely the Chinese would be heavily invested in energy production from the wind. Trump’s never seen a wind farm in China because he’s never looked; China is by far the lead producer of wind energy (with three times the capacity of the U.S.). Which is the second reason the bill’s evisceration of government support for green energy is bad policy. Green energy (solar and wind power, electric cars) is an economic sector that is growing fast and will do so for the foreseeable future, and currently China is eating our lunch. Even if climate change did not exist, anyone who thinks China will be a formidable rival would want the U.S. to compete with China in this valuable economic sector rather than ceding the field.
Destroying the process for developing renewables will drive up energy prices, especially as energy demands increase due to crypto, data storage and artificial intelligence. But this bill not only undermines our progress in green energy, it reclassifies metallurgic coal as a vital mineral and subsidizes it. Most metallurgic coal (a hot burning coal that is used for making steel) is exported (76% in 2023), with India and China the largest purchasers. So now Chinese steel can be cheaper; it hurts the environment and aids our economic rival.
To get this bill passed, the Republicans kept the vote open (violating protocol) until they could switch enough no votes to pass the bill. Many Republicans disparaged the bill; Josh Hawley (R-MO) said: “We cannot be a working-class party if you are taking away health care for working-class people.” Ron Johson (R-WI) complained about how much the bill added to the deficit, but after talking about all the things wrong with the bill, instead of fixing it, these Republicans voted for it. Actions speak louder than words.
One of the reasons this bill is so bad is because it’s so big, it is difficult to know everything that’s in it, which is always a recipe for interest groups and lobbyists to slip in provisions that could not stand on their own. These include the elimination of the tax on silencers (because we want more guns with silencers?) and the elimination of free income tax filing software. Why should we have to pay companies like Intuit to file our taxes electronically?
The bill also increased the exemption for the estate tax. Taxing an estate is almost an ideal tax, since it does not discourage economic behavior (as income or sales taxes might), and the deceased taxpayer is certainly unaffected. The only people hurt are the heirs, and remember, it’s not like they are suffering; the existing exemption (meaning no federal taxes) was $14 million ($28 million for a couple). If you’re inheriting that kind of wealth, you can afford to pay some additional federal taxes on inheritances over that amount.
The bill saves $1 trillion (over 10 years) by cutting Medicaid. This will directly affect many of Trump’s voters (states with more than 25% of their population on Medicaid include Arizona, New Mexico, Kentucky, West Virginia and Louisiana). The administration claims that they’re not cutting Medicaid but simply getting all the lazy people who don’t want to work out of the program. But only 8% of the people on Medicaid who are not on disability don’t work, and most of those are older women caring for family members. The bill has onerous employment reporting requirements, which, when tried in Arkansas, reduced access to Medicaid without increasing employment. Republicans hate government regulation except when it prevents poor people from accessing benefits for which they’re eligible.
When people lose insurance, hospitals that provide their medical care bill them (which can bankrupt them) and then charge higher prices for people with insurance to make up the losses. Reducing Medicaid payments will devastate rural hospitals that are already struggling financially. Even people who don’t use Medicaid will be adversely affected because hospitals they want to use may no longer be available. In addition to the Medicaid cuts, the bill cuts subsidies to people who pay for their insurance through the market. This bill makes the weaknesses in our health care system worse.
One of the worst aspects of the bill is that it greatly expands the power of U.S. Immigration and Customs Enforcement (ICE); its budget will be bigger than most countries’ entire military budget (and exceeds that of the FBI and the Marines). Although Trump promised to focus on deporting criminals, because of Stephen Miller’s demands that ICE make 3,000 arrests a day, ICE has gone to workplaces and even immigration hearings to arrest hard-working immigrants without criminal records. These arrests have terrorized communities where they take place, and this bill will amplify ICE’s actions.
Republicans know this bill is unpopular, and one way they’re trying to hide its negative impacts is to delay the Medicaid cuts until after the 2026 midterm elections. This bill will blow up the deficit to provide tax cuts that benefit the wealthiest the most, undermine efforts to combat climate change, hinder our ability to compete economically with China, empower ICE, destroy American investments and American jobs, and raise energy prices.
Kent James, of East Washington, has a doctorate in history and policy from Carnegie Mellon University.