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THE REPUBLICANS’ DRACONIAN BUDGET BILL IS NOW A REALITY  
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Heidi Shierholz
July 3, 2025
Economic Policy Institute
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_ The Republican budget will gut Medicaid, slash food aid for
families, and shutter rural hospitals—just to give tax breaks that
will go overwhelmingly to the wealthy. It is a staggering upward
redistribution of income. _

ICE Has Deported at Least 70 U.S. Citizens GAO confirms ICE deported
U.S. citizens due to systemic failures and the agency still doesn't
know how many more it's wrongly targeting. (According to a Government
Accountability, Office report from 2021, ICE carried out removal
operations against at least 65 potential citizens during Trump’s
first term.
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EPI PRESIDENT HEIDI SHIERHOLZ DENOUNCES PASSAGE OF GOP BUDGET BILL
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Congress just passed one of the most destructive economic bills in
generations. The Republican budget will gut Medicaid, slash food aid
for families, and shutter rural hospitals—just to give tax breaks
that will go overwhelmingly to the wealthy. It is a staggering upward
redistribution of income
[[link removed]].

The tax breaks for the rich are so huge—$100,000+ per year for the
richest 0.1%—that even after gutting aid for the most vulnerable,
this bill will still increase the national debt by nearly $4 trillion.
To cover up how grotesque this is, Republicans have invented a new,
completely bogus way
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measure the bill’s costs.

The bill also turbocharges an authoritarian-style immigration
regime—funding internment camps, mass surveillance, and waves of
deportations that will kill millions of jobs
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And, surprise, the GOP structured the bill’s provisions along deeply
cynical political timelines. The rich get their tax cuts before the
midterms. Some of the most painful (and unpopular) cuts to families?
Not until after. It is shameless. And that means that—by
design—this bill will cause economic pain that will unfold slowly
but steadily over many years. It’s engineered to dodge
accountability.

But make no mistake—the pain will be devastating. Kids will lose
food assistance. Families will lose health care. The economic shock
will hit hardest
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communities least equipped to withstand it.

It’s a perfect storm of long-term economic sabotage. This bill will
weaken economic growth over the next decade, making this country
poorer. All to give huge tax cuts to the richest.

 

The radical Republican budget bill steals from the poor to give tax
cuts to the rich
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Posted July 2, 2025 at 4:53 pm by Heidi Shierholz

Yesterday, the Senate passed a budget bill that will create a weaker
and more unequal U.S. economy. It is even more radical than the House
version, with deeper Medicaid cuts that will destroy rural hospitals
and strain state budgets, while adding nearly $4 trillion to the
federal deficit. The House should reject this legislation and start
from scratch. The stakes couldn’t be higher—the bill being rushed
to passage will do grave damage to the economy and the well-being of
U.S. families for years to come.

The bill is designed to cause a shocking upward redistribution of
income. It includes draconian spending cuts—mostly to health care
and food assistance for children and families—in order to give
massive tax cuts to the wealthiest households. Because these cuts to
health care and food assistance are so broad and deep, and because the
tax cuts for anybody who is not already rich are so paltry, the bill
will cause the bottom 40% of households to actually lose income on
average
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This group includes roughly 125 million people, and for a family of
three it will include households with incomes up to $85,000.
Meanwhile, households in the top 0.1% (those making over $3.3 million
per year) will gain over $100,000 annually
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this bill.

The spending cuts will also help finance the administration’s dream
of an authoritarian-style immigration enforcement regime
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providing funding at staggering levels to expand internment camps and
surveillance across the country. This enforcement, of course, won’t
help workers or create more jobs—on the contrary, it will
cause massive job losses for both immigrants and U.S.-born workers
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Because the bill structures its painful cuts on cynical political
timelines in an effort to avoid accountability, the suffering will
unfold steadily over the next decade. But just because the pain will
be strategically doled out over a longer timeline does not make it any
less real or urgent. People will die. Children will lose access to
food, and families will lose access to health care. Hospitals will be
forced to downsize and close, particularly in rural areas. This will
cause huge disruptions to local economies as the spillover effects
from the loss of health care jobs will trigger significant job losses
outside of health care.

The bill’s Medicaid cuts will hit the hardest in precisely those
areas that can weather it the least
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given that the counties with the highest share of people on Medicaid
are also the counties with the highest unemployment rates. But the GOP
has decided that it doesn’t matter if kids go hungry, parents
can’t afford the medicine they need, towns can’t properly fund
public schools, or jobs are wiped out in struggling rural
counties—as long as the wealthiest Americans get a big, beautiful
tax break.

And, those tax breaks are such massive giveaways to the rich that they
will increase the deficit by close to $4 trillion, even with the
draconian cuts for the most vulnerable. It’s worth noting that the
GOP is desperately trying to hide that fact
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They have taken the extraordinary step of coming up with a new and
utterly bogus baseline against which to measure the cost of the bill.
Their gimmicky methodology “finds” that the bill
will _reduce _deficits by about $500 billion. Through this sleight
of hand, Republicans are shamelessly lying to the public about the
cost of the bill in order to make it sound less grotesque and damaging
than it actually is.

If this bill becomes law, there will be a protracted period of
economic pain that takes years to play out. By sharply raising
deficits at a time when inflation and interest rates are already too
high, the bill will gradually suppress productivity-boosting private
investment—including in clean energy and much-needed housing. This
crowding out of investment will be on top of the expanded scope of
deportations made possible in this bill, which will shrink the
nation’s labor supply. It’s further compounded by the Trump
administration’s historically broad and steep tariffs that will
raise prices and disrupt supply chains, along with deep cuts to
crucial federal workforces that are key complements to private-sector
growth.

In short, this bill will be another key contributor to weaker economic
growth over the next decade, making us and our children reliably
poorer for no reason other than to write larger tax cut checks to the
richest people in the country. This bill is one of the most
destructive economic proposals we’ve seen in the U.S. in
generations.
 

_[HEIDI SHIERHOLZ [[link removed]]
(SHE/HER) IS THE PRESIDENT OF THE ECONOMIC POLICY INSTITUTE, a
nonprofit, nonpartisan think tank that uses the power of its research
on economic trends and on the impact of economic policies to advance
reforms that serve working people, deliver racial justice, and
guarantee gender equity. In 2021 she became the fourth president EPI
has had since its founding in 1986._

_Shierholz, who served the Obama administration as chief economist at
the Department of Labor, has been a consistent and leading voice for a
worker-centered policy agenda that prioritizes economic and racial
justice. Taking the helm at EPI after former President Thea Lee
departed to work for the Biden administration, Shierholz is
strengthening EPI’s ability to deliver economic analysis that
challenges and transforms the mainstream narrative about the economy.
Under her leadership, EPI is focused on fighting for and winning
federal, state, and local legislative and regulatory reforms that
support collective bargaining; increase worker power; improve wages,
benefits, and working conditions; and reduce racial and gender
inequities.]_

Economic Policy Institute [[link removed]]  
1225 Eye St. NW, Suite 600
Washington, DC xxxxxx
Phone: 202-775-8810 • [email protected]
 

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