Published October 31, 2025

On July 4, 2025, President Trump signed the budget reconciliation law (H.R. 1). Republicans called it a victory for taxpayers, claiming it would save money and boost incomes. The reality is the opposite. The law shifts wealth upward on an unprecedented scale, cutting food assistance and health care coverage for millions to pay for massive tax breaks for billionaires and large corporations. 

One analysis found that H.R. 1 will reduce income for the poorest 20 percent of Americans by an average of 3.8 percent while increasing income for the wealthiest 20 percent by 3.7 percent. That 7.5 percentage-point gap is not fiscal discipline. It is a deliberate upward redistribution.  

The Fiscal Impact 

SNAP is one of the most effective anti-hunger programs in the U.S., reaching 42 million people and generating up to $1.80 in economic activity for every $1 spent. Cuts to SNAP mean direct losses for farmers, grocers, and state and local governments. 

  • Reduced revenues: State income tax revenues are projected to fall by $3.7 billion in 2026 alone. Farmers stand to lose $24 billion over the next decade as household food purchases decline. Within six months, as participants lose SNAP, small grocers could see sales decline by as much as 6.7 percent. Over the next nine years, SNAP-related sales are projected to fall by an average of 8.7 percent compared to current spending levels. H.R. 1 is expected to cost the federal government roughly $4 trillion over the next 10 years, and that cost would be even higher if its temporary provisions are extended. The bill is also expected to raise borrowing costs for the federal government, further worsening the long-term fiscal outlook for the nation. 
  • Cost shifts to states: Starting in fiscal year (FY) 2027, states must cover 75 percent of SNAP administrative costs, up from 50 percent today. By FY 2028, states will also begin paying for SNAP benefits, tied to their “payment error rates.” This upends SNAP’s long-standing structure, state and federal partnership, and leaves states exposed to volatile new costs. 
  • Eroded benefits: SNAP benefits will no longer be adjusted to keep pace with food inflation. Internet expenses can no longer be factored into benefit calculations; only older adults and people with disabilities can automatically claim the full standard utility allowance if they are receiving fuel assistance. Additionally, SNAP-Ed nutrition education was defunded. 
  • Expanded time limits: All adults ages 18–64 must document 20 hours of work every week to receive SNAP, unless they meet an exemption. This includes parents and caregivers of children 14 years old and older, veterans, youth aging out of foster care, and workers with irregular schedules.  

Who Pays the Price 

To illustrate the impact, we created profiles of households and communities that reflect the real impact of H.R. 1. These examples are fictional but grounded in real-life data and circumstances. They show how the law translates into lost meals, greater hardship, and diminished opportunity: 

  • Young adults leaving foster care are cut off because their gig jobs don’t satisfy the rigid 20-hour-per-week rule. 
  • Caregivers in their 50s and 60s lose benefits because unpaid caregiving does not count as “work.” 
  • Veterans with irregular schedules see their benefits vanish, even though they rely on them to make ends meet. 
  • Refugees who supported U.S. military efforts abroad now face losing both food and health coverage for their families. 

At the community level, the effects ripple outward: 

  • Food pantries face surging demand that they cannot meet. 
  • Local grocers and farmers lose reliable sales as SNAP dollars disappear from checkout counters and farmers’ markets. 
  • Rural hospitals and clinics see higher uncompensated care costs as food insecurity worsens chronic illness. 
  • Counties and states face new financial pressure, balancing SNAP shortfalls against already strained budgets. 

Who Reaps the Benefits 

Billionaires, other hyper-wealthy people and large corporations are the big winners from the Republican tax-and-spending law. Almost three-quarters of the tax cuts will go to the highest-income 20 percent of households next year; the top 1 percent will enjoy a windfall of over a trillion dollars over the next decade. Furthermore, the tax provisions benefitting those with incomes over $500,000 will cost the federal government $1.5 trillion, nearly identical to the size and scope of cuts to SNAP and Medicaid.  

We created imaginary profiles of billionaires (though they may well remind readers of real people), as well as one entirely fictional multimillionaire, to illustrate how different aspects of the law will shower goodies on the well-to-do. 

  • The law’s restoration of “bonus depreciation,” corporations and their owners will be able to write off the cost of big-ticket purchases like buildings and machinery much faster than they actually wear out. This will save them collectively over $360 billion in taxes over 10 years.  
  • Billionaire owners of non-corporate companies will be allowed to subtract 20 percent of their profits before figuring taxes. Falsely dubbed a “small business tax break,” this pass-through loophole offers the great bulk of its benefits to Wall Street investment firms, corporate law partnerships, real estate developers, and other members of the wealthy elite. It will cost the rest of Americans a staggering $737 billion in foregone public revenue over the following decade.  
  • For the past three years, corporations have been required to deduct the cost of research and experimentation slowly over time, reflecting the long-term nature of these investments. The Republican law changes this rule by allowing firms to deduct research expenses immediately in the year incurred. This provision is estimated to reduce federal revenue by more than $140 billion during the next 10 years with the largest benefits accruing to corporations and their high-income shareholders. 
  • The estate tax is the only federal mechanism designed to limit the concentration of inherited wealth across generations. Recent changes under the GOP tax law significantly weakened it, allowing couples to transfer up to $30 million to their heirs without owing federal estate taxes — an exemption that will continue to grow with inflation. This policy change is projected to reduce public revenue by more than $200 billion over the next decade — funds that could otherwise support programs and investments benefiting the broader public.  
  • Billionaires and other high-net-worth individuals who manage “private equity” funds— large pools of unregulated investment money from institutions and wealthy individuals that buy companies using borrowed money and seek to increase returns through restructuring or resale — will benefit. By allowing greater write-offs of interest, the law encourages heavier reliance on debt financing in these acquisitions and related transactions. This change is projected to cost  Americans $61 billion over the next decade.  
  • The Child Tax Credit (CTC) is intended to support parenting by low- and middle-income families. The new Republican law expanded eligibility for the full credit to households with incomes up to $400,000, including those whose income comes from investments rather than wages, while leaving unchanged a provision that limits or denies the credit to parents earning too little money from their jobs. At the same time, new restrictions were added, meaning that while some households will see a modest increase, 17 million children in low-income families will continue to receive only partial benefits or none at all. 

A Deliberate Strategy 

H.R. 1 is not accidental. By expanding time limits, shifting costs to states, and imposing harsh restrictions on families, Congress has made SNAP more expensive and politically vulnerable, undermining the program and the stability of families and communities. 

At the same time, the law deliberately redistributes money up the income and wealth scale, handing hundreds of billions of dollars in tax breaks to the ultra-wealthy and mega corporations. It also continues to drain the federal treasury of needed revenue, which will only worsen the nation’s fiscal situation and embolden calls from austerity-minded lawmakers that spending must be reduced despite evidence that decades of tax cuts are the primary driver of long-term debt. 

The profiles above show what this policy means on the ground: veterans, caregivers, and working parents losing food for their families, while the nation’s wealthiest households get even richer. 

The question is not whether taxpayers save money. They do not. The question is who pays the price. And under H.R. 1, working Americans bear the cost while billionaires walk away with the winnings. 

Farmers receive 24.3% of every dollar spent on groceries (i.e., food at home) and SNAP participants cut their food purchases by roughly half for every dollar that they lose in benefits (page 15: “the marginal propensity to consume food at home, which find estimates near 0.5 or above”).
The Senate bill cuts $197B from SNAP. Divided by 2 to get the reduction in spending by SNAP participants = $98.5B.
$98.5B x 0.243 (amount of every dollar spent on groceries that goes to farmers) = $23.9B.