Trump's Reverse Robin Hood Bill Takes From The Poor, Gives To The Rich
The CBO finds Trump's bill would strip resources from the poorest Americans while the rich gain, leave 10.9M uninsured due to Medicaid and Obamacare cuts, and add $2.4T to the national debt.
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This week, President Trump’s “One Big Beautiful Bill Act” is taking center stage in the Senate.
The bill narrowly passed the House last month with a slim 215-214 vote, but could face changes in the Senate, as Democrats highlight its steep cuts to Medicaid and food stamps, some Senate Republicans complain about deficit spending, and Elon Musk calls it a “disgusting abomination.”
At the time of this writing, no major changes to the bill have been made in the Senate. While Trump and his allies have sought to frame this as a “beautiful” bill that helps everyday Americans, the exact opposite is true. The better name for this would be “The Reverse Robin Hood Act.”
In a conversation on The Ezra Klein Show, MSNBC host and Washington Post Columnist Catharine Rampell described Trump’s self-proclaimed “Big Beautiful Bill” succinctly:
“I think I would say it is a transfer of wealth from the poor to the rich, from the young to the old, and from the future to the past.”
The provisions in the bill and multiple independent analyses of its impact back up her assertions.
On Wednesday, the nonpartisan Congressional Budget Office (CBO) released a new analysis of the latest iteration of Trump’s bill that passed the House. The CBO finds that the bill would reduce taxes by $3.75 trillion, increase the national debt by $2.4 trillion, and result in 10.9 million Americans being uninsured by 2034. The loss of healthcare is due to cuts to Medicaid and Affordable Care Act subsidies.
Those $3.75 trillion in tax cuts are, in part, being paid for by cuts to programs that help the most vulnerable among us.
The CBO previously projected that the bill would lead to a decrease in household resources for the bottom 10% of Americans, while the top 10% would see their resources increase. To put it more specifically, the CBO estimated that the poorest 10% could see a 2% reduction in household resources, growing to a 4% reduction by 2033, while the richest 10% could see a 4% increase in 2027, falling to a 2% increase by 2033.
In other words, this bill takes resources from the poor and gives them to the rich. It’s a stunning, direct transfer of wealth.
Another analysis from the nonpartisan Penn Wharton Budget Model showcases what this wealth transfer could look like in dollar amounts:
“People making between about $51,000 and $17,000 could lose about $700 on average in after-tax income beginning in 2026, according to the analysis, when factoring in both wages and federal aid. That reduction would worsen over the next eight years. People reporting less than $17,000 in income would see a reduction closer to $1,000, on average, also increasing over time, a shortfall that underscores their reliance on federal benefits.
By contrast, the top 0.1 percent, including those with incomes over $4.3 million, would gain on average more than $389,000 in after-tax income in 2026, the data show.”
There are over $1 trillion in cuts to Medicaid and food stamps - $723 billion in Medicaid cuts and $300 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps. According to Medicaid.gov, 71 million people are enrolled in Medicaid. Approximately 42 million Americans receive SNAP benefits.
Most of the losses in Medicaid coverage are estimated to come as a result of the 80 hours per month work requirements and stricter eligibility checks for Medicaid. In the final stages of this bill, the implementation of these work requirements was moved up to December 31, 2026, instead of the previous date of January 1, 2029.
Experts believe people could lose coverage from simply being caught up in red tape. CNN reports:
“We expect that millions of adults will lose coverage under work requirements, including many who are working, who are looking for a job, who are unable to work because of a health condition or disability or who are meeting some other qualifying activity, but just don’t successfully report it because they just have difficulty dealing with the bureaucracy of the new work reporting system,” said Michael Karpman, a principal research associate at the Urban Institute, a think tank.
The losses in SNAP benefits stem from provisions in the bill that add new work requirements for individuals aged 55-64 and parents. While I’ve seen analyses ranging between 1 million and 11 million people at risk of losing their SNAP benefits under this bill, this is what the CBO found:
These measures would strip roughly 3.2 million people of their food stamp benefits in an average month over the next decade, CBO estimates. This includes 800,000 people who live with children ages 7 and older.
When asked about the cuts to Medicaid, Senator Joni Ernst (R-IA) said, “We’re all going to die,” and doubled down in a video where she joked about the comments while walking through a cemetery. Ernst’s shamelessness has drawn fierce backlash and become a flashpoint for Democrats who want to point out the cruelty of the bill.
On top of its dire impact on the most vulnerable Americans, the cost will be sky-high deficits that will burden future generations. Previous CBO estimates indicated that this bill would add $3.8 trillion to the national debt over the next 10 years. Even if you were to factor in "positive economic dynamics” from the bill, the Penn Wharton Budget Model estimates an increase of about $3.3 trillion over 10 years. The new CBO analysis, which factors in cuts to spending, indicates $2.4 trillion added.
Usually, it’s in times of crisis that we resort to deficit spending. But right now, when the fundamentals of the economy are strong, the Republican Party is looking to balloon the deficit in order to benefit the rich.
I’m sure conservatives will say, well, Democrats also balloon the deficit. But there is simply no comparison
Ezra Klein noted just how much larger this deficit spending really is in the podcast episode I cited at the beginning of this piece:
“The Inflation Reduction Act was expected to cost about $500 billion over 10 years, and it paid for all of that spending — and more — through tax increases. The Affordable Care Act was expected to cost about a trillion dollars over 10 years — all of it, again, paid for. Trump’s 2017 tax reform bill, when you added everything up, left an estimated $1.5 trillion of tax cuts unpaid.
But the Big Budget Bomb exists in a class by itself. Even a naïve analysis, one that buys into some very obvious Republican budget tricks, finds that this bill, as it exists on May 21, cuts taxes and raises spending by more than $4 trillion over 10 years — but only pays for about $1.5 trillion of that.”
Right now, the federal government is spending more on interest to service U.S. debt than it’s spending on defense.
The New York Times spoke to economists who raised concerns over ballooning the debt during good times and the impact on the bond market:
“We don’t want to exhaust our credit line before we hit some bad times,” said Douglas W. Elmendorf, a Harvard economist and former director of the Congressional Budget Office. “If we borrow too much outside of those periods, then we will hinder our ability to respond to those needs.”
…
There are signs that investors’ appetite for U.S. government debt could at last be waning. Yields on long-term government debt have risen in recent weeks as investors have expressed mounting concerns about the cost of the Republican tax bill when Mr. Trump has waged trade wars with nearly all the countries with which the United States does business. Typically a safe haven that investors flock to during times of stress, the U.S. dollar has continued to drop against a basket of its peers even as the stock market has wobbled.
All this being said, the state of this bill is definitely still in flux.
On Tuesday, Elon Musk trashed the bill as a “disgusting abomination,” echoing concerns over the impact on the national debt. Musk’s post on X read:
“I’m sorry, but I just can’t stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it.”
Musk followed this up in a post proclaiming, “It will massively increase the already gigantic budget deficit to $2.5 trillion (!!!) and burden America citizens with crushingly unsustainable debt.” Then, Musk issued a threat: “In November next year, we fire all politicians who betrayed the American people.”
Of course, Musk’s motivations are likely not simply about reducing the national debt. As Speaker Mike Johnson (R-LA) himself noted, Musk is upset with the cuts to electric vehicle subsidies included in the bill.
Senate Majority Leader John Thune (R-SD) continues to defend the bill, but he faces a steep climb in the Senate. Thune can only afford to lose 3 Republican Senators, and there are already widening splinters within the party.
Deficit hawks like Senators Rand Paul (R-KY) and Ron Johnson (R-WI) have criticized the bill over debt concerns, calling for steeper cuts. On the other hand, Senators Josh Hawley (R-AR), Susan Collins (R-ME), and Lisa Murkowski (R-AK) have expressed concerns over cuts to welfare programs like Medicaid, saying they go too far.
We’ll see how these negotiations play out, and it’s unclear exactly what changes will be made, but one thing is clear: The bill, as it currently stands, would serve the rich at the expense of the poorest, most vulnerable Americans.
Americans who voted for Trump under the false impression that he would lower prices are instead facing higher prices via tariffs and cuts that could leave them uninsured. Like much of what Trump has done, this will surely backfire on Republicans politically.
My goodness, Ahmed. You really got into the weeds. I’ve been tied up all day trying to get my phone service sorted and recovering from Monday and Tuesday at the dentist. Now I need a distraction on the telly.