Last week, President Donald Trump signed into law the “One Big Beautiful Bill Act,” an omnibus tax and spending package that aims to reshape the social safety net on both a national and state level, particularly impacting New York.
The $4.5 trillion package continues tax cuts for the wealthy, originally enacted during Trump’s first term in 2017, while also enhancing immigration enforcement and border security. These expanded expenditures are being funded by significant cuts to critical services such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP), commonly referred to as food stamps.
The bill, which passed the House mostly along party lines, was signed by Trump on July 4.
Immediate backlash from New York’s Democratic officials was notable, as they predicted the legislation would result in devastating impacts on state and city budgets, jeopardizing public assistance for millions.
Governor Kathy Hochul described the bill as “a big, ugly betrayal,” emphasizing that it would strip health care, increase costs, and slash food assistance for many New Yorkers.
Hochul stated, “No state can backfill the massive cuts in this bill or undo the damage Republicans just caused. But my team and I are working closely with the legislature to brace for the impact and protect as many New Yorkers as possible.”
In early May, Hochul had signed a $254 billion state budget that significantly increased spending without accounting for the impending cuts from the federal government. As the situation evolves, Hochul and state legislative leaders are currently meeting in Albany to evaluate the effects of the new law on the state budget.
One of the pivotal measures in the legislation is the raising of the state and local tax (SALT) deduction cap, which has been a priority for New York’s Republican Congressional delegation.
This adjustment raises the initial $10,000 SALT cap to $40,000, beginning this year, with full deductions available to taxpayers earning up to $500,000 annually.
While Hudson Valley GOP Representative Mike Lawler praised the bill as delivering “historic tax relief,” the Fiscal Policy Institute, an economic policy think tank focused on New York, warned that individuals earning $300,000 or less are not likely to benefit from this change at all.
Another notable provision from the new law involves allowing tipped workers to deduct up to $25,000 in tips from their taxable income, although this will not apply to individuals earning over $150,000 and primarily benefits higher-income tipped workers.
The tax relief measures will take effect this year but are set to expire at the end of 2028.
The Medicaid cuts are alarming, particularly for New Yorkers. The governor’s office projects that the law could result in the loss of health insurance for approximately 1.5 million individuals due to slashed funding for Medicaid and New York’s Essential Plan.
The Fiscal Policy Institute has warned that such cuts could lead to the state’s uninsured population doubling.
Hochul’s office points out that the law will remove federal funding for legally present immigrants enrolled in the Essential Plan, including Green Card holders. To maintain coverage for these individuals, New York would have to shift them to Medicaid, incurring an estimated $2.7 billion annually.
Furthermore, new eligibility checks will be instituted for Medicaid, which will cost the state roughly $500 million. These checks include twice-a-year recertification and an 80-hour-a-month work mandate for able-bodied adults, measures that have previously contributed to eligible Medicaid recipients being excluded from the program in other states.
Some of these changes are expected to start taking effect next year, while others will not happen until 2026 or later.
For instance, the work mandate will be implemented in November 2026, and the new eligibility checks will commence at the end of next year.
On the other side of the aisle, Representative Nicole Malliotakis showed support for the legislation, arguing that it ensures “ineligible fraudsters and illegal immigrants no longer benefit” from the program and emphasizes the importance of work or education for able-bodied adults.
She stated, “By rooting out waste, fraud, and abuse, we are actually preserving the Medicaid program for our most vulnerable citizens and ensuring hardworking families and senior citizens get the much-needed tax relief they deserve.”
As for the SNAP program, the new legislation is projected to cause nearly 300,000 New Yorkers to lose their benefits immediately. This is attributed to the introduction of stricter work eligibility requirements.
An additional 413,000 individuals may also be at risk of losing their benefits, potentially affecting the food security of 363,000 children living with those impacted adults.
George Kelemen, affiliated with Share Our Strength’s No Kid Hungry campaign, expressed disappointment, stating, “We are disappointed that a majority of our elected officials in Congress stood behind the most extreme cuts to SNAP in history.”
Kelemen continued, “Nearly one in five children in our country face hunger, and SNAP helps feed nearly 16 million of them. We agree with the 86% of Americans who opposed these cuts as they understand that SNAP is one of our most powerful tools to fight hunger.”
Additionally, the legislation will shift $2.1 billion in annual federal spending on SNAP to the state, further complicating the financial dynamics faced by New York as it adapts to these sweeping changes.
In summary, the “One Big Beautiful Bill Act” signed by President Trump is poised to drastically reshape crucial welfare programs while providing tax relief primarily for the wealthy.
Governor Hochul and state leaders are scrambling to mitigate the adverse effects on New Yorkers, but the future for many vulnerable residents remains uncertain as these significant federal cuts take hold.
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