Trump’s Budget and Tax Proposals Mark Historic Shift in US Approach to Health Care Policy

The Trump administration is pushing forward sweeping changes to the US health care system, proposing major budget cuts, shifting federal oversight responsibilities, and advancing a massive tax and spending bill, as questions mount over how these moves will affect Americans’ access to care and life-saving treatments.

President Donald J. Trump’s flagship legislative proposal, dubbed the “One Big Beautiful Bill,” would unleash trillions of dollars in tax cuts while slashing safety-net programs—but at a steep cost to the federal deficit and health coverage, according to a new analysis from the Congressional Budget Office (CBO).¹

The CBO estimates the package would add $2.4 trillion to the national deficit over a decade and leave 10.9 million more Americans without health insurance.^1,2 The sweeping 1000-plus page bill, which narrowly cleared the House last month, is now under intense scrutiny in the Senate, where Republicans and the White House are seeking to strike a deal before the Fourth of July.

At the heart of the bill are roughly $3.75 trillion in tax cuts, including extensions of the expiring 2017 tax law and new provisions Trump campaigned on.

Image credit: Rosemarie Mosteller - stock.adobe.com.jpeg

“We’re committed to making a law that will make the lives of the American people better,” said Senate Majority Leader John Thune (R, South Dakota), vowing to pass the bill “one way or another.”¹ Still, GOP senators met for more than an hour with Trump at the White House Wednesday to discuss key changes, including cuts and coverage rollbacks that have sparked criticism from both sides of the aisle.

Elon Musk, the former Trump adviser, has added to the controversy by calling the bill a “disgusting abomination” and urging his followers on X, formerly Twitter, to contact Congress to kill the legislation.³ “Bankrupting America is NOT ok!” Musk wrote on social media. “KILL the BILL.”

Tax Cuts vs Safety Net

At the heart of the bill are roughly $3.75 trillion in tax cuts, including extensions of the expiring 2017 tax law and new provisions Trump campaigned on. These are partially offset by $1.3 trillion in proposed spending cuts, targeting Medicaid, food assistance, and other social programs.¹

The CBO projects that the Medicaid changes alone would result in 7.8 million individuals losing coverage, including 5.2 million adults who would be affected by new work requirements. An additional 1.4 million undocumented immigrants currently covered by state-funded health programs and 400,000 people impacted by the repeal of a medical provider tax could also lose coverage.

Republicans argue the reforms aim to streamline aid and curb waste. “We want resources to go to the people who need them most,” Thune said. But Democrats accuse the GOP of disguising deep cuts under the banner of fiscal discipline.

“They just want to strangle health care,” Senate Minority Leader Chuck Schumer (D, New York) said, framing the bill as another attempt to dismantle the Affordable Care Act.

Restructuring HHS

The sweeping budget proposal outlined in the GOP bill builds directly on the broader vision to reshape HHS described in the White House’s detailed budget plan.³ That plan called for consolidating the 28 operating divisions of the National Institutes of Health (NIH) into 8 centers and 15 total divisions, cutting thousands of contracts, and dramatically reducing funding for federal health and social programs—all moves echoed in the bill’s deep Medicaid and Supplemental Nutrition Assistance Program (SNAP) cuts.

The pair of proposals reveals a consistent strategy: shrink the federal role in health and social welfare while expanding tax cuts and increasing administrative control. This includes a proposed transfer of oversight for the 340B drug discount program from the Health Resources and Services Administration to CMS. By concentrating both budgetary and operational authority, the administration is pushing for a dramatic reorientation of federal health policy—one that prioritizes cost-cutting and deregulation over coverage and access.

Deficit Debate Intensifies

The CBO’s projections have raised ire among some, with those favorably supporting the bill voicing concern over the office’s methodology, arguing it unfairly counts the cost of extending existing tax breaks as new spending.¹ White House Budget Director Russell Vought claimed the bill would actually reduce the federal deficit by $1.4 trillion over the next decade based on an alternative accounting method that adjusts for "current policy," meaning it assumes that the existing tax breaks implemented under the Tax Cuts and Jobs Act (TCJA) signed into law on December 22, 2017, by Trump will automatically continue rather than expire as scheduled in the act.

“The CBO is using a gimmick,” Vought said. House Speaker Mike Johnson (R, Louisiana) echoed that defense, calling the bill “a mandate delivered by the American people.”

But critics from both sides of the aisle warn that such accounting maneuvers obscure the bill’s true impact on long-term fiscal health. The CBO, led by Director Phillip Swagel, a former Bush administration official, defended its analysis as impartial and grounded in long-standing practices.

Will the 2017 Tax Breaks Expire?

With the July 4 deadline looming, the political stakes are high. If Congress fails to act, Trump’s 2017 tax breaks will expire at year’s end, potentially raising taxes for millions of Americans, with the top 1% of households at risk of bearing the brunt of this indecision. Under the TCJA, the highest-income households could lose the most, with an average tax reduction of $61,090, compared with an average reduction of only $910 for middle-income households and $70 for the lowest-income American households.⁴

Meanwhile, the bill’s inclusion of a $350 billion boost for border security and a $4 trillion debt ceiling increase underscores broader ambitions and challenges it still faces.¹ Whether the “One Big Beautiful Bill” becomes law may hinge on whether Senate Republicans can resolve growing rifts in their ranks, and whether Trump can navigate the growing opposition from both Democratic lawmakers and high-profile detractors like Musk.

References

1. Mascaro L, Jalonick MC. Trump tax bill will add $2.4 trillion to the deficit and leave 10.9 million more uninsured, CBO says. Associated Press. June 4, 2025. Accessed June 6, 2025. https://apnews.com/article/cbo-deficits-tax-cuts-trumps-big-beautiful-bill-64d7de49aef62ba07b7f6f45c1ca73d1

2. Estimated Budgetary Effects of H.R. 1, the One Big Beautiful Bill Act. CBO.org. June 4, 2025. Accessed June 6, 2025. https://www.cbo.gov/publication/61461

3. Musk E. Call your Senator, Call your Congressman, Bankrupting America is NOT ok! KILL the BILL. X.com. June 4, 2025. Accessed June 6, 2025. https://x.com/elonmusk/status/1930336497208832059

4. Grossi G. White House proposes deep cuts to HHS in FY2026 Budget, Reducing NIH to 8 Centers. AJMC^®. June 4, 2025. Accessed June 4, 2025. https://www.ajmc.com/view/white-house-proposes-deep-cuts-to-hhs-in-fy2026-budget-reducing-nih-to-8-centers

4. Ross J. The Tax Cuts and Jobs Act failed to deliver promised benefits. Americanprogress.org. April 3, 2024. Accessed June 6, 2025. https://www.americanprogress.org/article/the-tax-cuts-and-jobs-act-failed-to-deliver-promised-benefits/