Notes on the One Big Beautiful Bill Act
Here’s my own notes on what it’s included in the budget reconcilliation bill that’s being fast tracked through congress. I started this awhile back when the bill had first been announced. In the interest of just having it up as a reference as the bill is being spend through I decided it would be prudent to get this up now as a sort of easy to point to artifact of some of the more concerning provisions of the bill. I’ll try to loop back and see what eventually makes it into the final bill when this is all over.
The One Big Beautiful Bill (OBBA) Provisions
Separation-of-Powers
1. Bond Requirements to Enforce Contempt of Court
Bill section: § 70302 — “Limitations on Enforcement of Contempt”
What it does
• Bars any federal court from enforcing an injunction or temporary restraining order unless plaintiffs first post a Rule 65(c) bond.
Why it matters
• Lets executive-branch officials ignore court orders with minimal risk.
• Civil-rights, environmental, and FOIA plaintiffs rarely post bonds, so their remedies would become toothless.
In short, the clause bluntly weakens judicial authority, thereby diminishing the judiciary’s role as an effective check on executive power.
2. At-Will Federal Hiring Option
Bill section: Title VIII (Senate HSGAC amendment) — “At-Will Federal Service”
What it does
• Forces every new civil servant to choose between:
- Keeping Title 5 due-process protections while paying an extra 10 percentage-point retirement contribution, or
- Becoming an at-will employee while still absorbing a 5-point hike.
• Adds a 10 percent surcharge on any payroll deduction to a tax-exempt group (e.g., union dues).
Why it matters
• Creates strong financial pressure to surrender whistle-blower and appeal rights.
• Shifts bargaining power for 2.2 million workers toward the White House and agency heads.
Consequently, the amendment erodes a professional, non-partisan civil service and strengthens executive control of federal personnel.
3. Revoking Non-Profit Tax-Exempt Status
Bill section: § 80205 — Treasury Power to Revoke Tax-Exempt Status
What it does
• Authorizes the Treasury to strip 501(c) status from any nonprofit it “determines knowingly supports terrorism,” without explicit judicial review.
Why it matters
• Employs a vague standard that can be weaponized against advocacy groups critical of the administration.
• Chills free speech by threatening organizations’ financial lifelines.
Thus, the provision hands the executive an oversized tool to punish dissent and silence civil society.
4. A Decade-Long Ban on State AI Regulation
Bill section: Title IX, § 91001 — 10-Year Pre-emption of State AI Laws
What it does
• Prohibits states from “enacting, enforcing, or giving effect to” any measure that “materially governs the design, training, deployment, or liability” of AI systems until 2036.
Why it matters
• Voids dozens of state privacy, deep-fake, autonomous-vehicle, and child-safety statutes.
• Creates a regulatory vacuum that tech-policy experts warn will harm consumers; meanwhile, polls show 71 percent public opposition.
In effect, the clause grants Big Tech a decade-long holiday from local oversight while channeling all rule-making through agencies loyal to Trump.
Economic and social impacts
Individual & Family Tax Provisions
1. Extension of the 2017 Tax Cuts
Bill section: § 1010 — “Permanent Rate Reductions”
What it does
- Makes the Trump 2017 income-tax brackets and estate-tax thresholds permanent.
Why it matters
- Congressional Budget Office (CBO) projects 76 % of benefits will flow to the top quintile.
- Lost revenue: $1.3 trillion over ten years.
- Continues to balloon the national debt with no real promise of returns.
2. Higher SALT Deduction Cap
Bill section: § 1012 — “$40,000 State-and-Local Tax Cap”
What it does
- Raises the SALT deduction ceiling from $10 k to $40 k through 2030.
Why it matters
- The Committee for a Responsible Federal Budget (CRFB) finds 98 % of gains accrue to households earning $200 k+.
- Shrinks future state tax bases, forcing state and local governments to be more reliant on federal control and funding.
3. Child Tax Credit Expansion
Bill section: § 1015 — “Enhanced Child Tax Credit”
What it does
- Boosts the credit from $2,000 to $2,500 per child and indexes it to inflation.
Why it matters
- Low-income parents simultaneously lose SNAP and Medicaid support elsewhere in the bill, offsetting any cash benefit.
- Adds $115 billion to the deficit.
“Workforce Incentive” Measures
Exemption of Tips & Overtime from Income Tax
Bill section: § 1020 — “Tax-Free Gratuities and Overtime Pay”
What it does
- Excludes all reported tips and overtime premiums from taxable income starting in 2026.
Why it matters
- Helps only a sliver of service workers — most already owe no federal tax.
- Employers gain an incentive to cut base wages and relabel pay as “tips.”
- Undermines Social Security financing and invites widespread income reclassification (e.g., CEO “bonuses” rebranded as tips).
Savings & Investment Gimmicks
MAGA Accounts (Money Account for Growth and Advancement)
Bill section: § 2025 — “Establishment of MAGA Trust Accounts”
What it does
- Federal seed deposit: $1,000 for every child born 2026-2028.
- Guardians may contribute up to $5,000 per year.
- Withdrawal schedule: 50 % at age 18, 100 % at 25 for qualified uses, remainder at 30 unrestricted.
- Tax treatment: capital-gains rate for qualified uses; ordinary income otherwise.
Why it matters
- Functionally inferior to existing 529 plans and Roth IRAs outside of the initial seed money.
- Time-limited seed money creates geographic and generational inequities.
- Adds $28 billion in outlays with minimal long-term benefit.
Ballooning the Debt for Tax Cuts to Wealthy Donors
Trillion-Dollar Tab & Credit Downgrade
Bill section: § 3001 — “Budgetary Effects”
What it does
- Authorizes deficit increases totaling $2.56 trillion through 2034.
Why it matters
- Gross federal debt reaches $38.8 trillion by 2034 (CBO).
- Moody’s has already shifted the U.S. to a negative outlook; a formal downgrade would raise borrowing costs for every consumer and business.
Takeaway: The OBBA’s “beautiful” façade hides regressive tax cuts, compliance nightmares, gimmicky savings accounts, and a mammoth debt spike — while exposing Republican hypocrisy over debt limits.
Safety-Net Retrenchment (SNAP, Medicaid & More)
SNAP Error-Rate Penalty
Bill section: § 4110 — “State Liability for Over-Payments”
What it does
- If a state’s SNAP error rate exceeds 6 %, the state — not USDA — must repay 100 % of over-payments.
Why it matters
- Shifts actuarial risk to states, pressuring them to restrict benefits rather than focus on delivering support to vulnerable populations.
- Pushes states to cut caseloads or automate harsh eligibility filters, affecting 2.3 million low-income households.
75 % State Share of SNAP Admin Costs
Bill section: § 4112 — “Administrative Match Increase”
What it does
- Raises the state share of SNAP admin spending from 50 % to 75 % — the first hike since 1964.
Why it matters
- Low-income and rural states face $5 billion/yr in new costs; some may close intake offices, lengthening queues.
- The Urban Institute projects 460,000 eligible families could lose benefits by 2028.
Medicaid Restrictions on Gender-Affirming Care
Bill section: § 3220 — “Crenshaw Amendment”
What it does
- Imposes a nationwide ban on Medicaid funding for gender-affirming care — hormones, counseling, surgery — for both minors and adults.
Why it matters
- Contradicts prevailing medical standards; affects an estimated 300,000 transgender Medicaid enrollees.
- Could increase untreated gender dysphoria, raising mental-health costs.
- Strips states of the right to use federal dollars contributed by their residents for medically approved care.
Medicaid Abortion-Provider Exclusion
Bill section: § 3222 — “Hyde-Plus Restriction”
What it does
- Denies Medicaid reimbursement to nonprofits that provide abortion services outside rape, incest, or life-threat exceptions.
Why it matters
- Targets Planned Parenthood and many hospital systems; 880,000 patients could lose routine cancer screenings and contraceptive care.
Long-Term-Care & Enrollment Freezes
Bill sections: §§ 6011-6014 — “Temporary Regulatory Suspensions”
What it does
- Blocks HHS from enforcing minimum staffing in nursing homes, transparency in Medicaid institutional reporting, and streamlined Medicaid/CHIP enrollment until 2035.
Why it matters
- Could lower staffing ratios for 1.2 million nursing-home residents.
- Slows Biden-era simplification, risking 950,000 children’s coverage.
Economic & Social Ripple Effects
| Domain | Projected Impact (2025-2034) | Source |
|---|---|---|
| Poverty rate | +0.9 percentage point (≈ 3 million people) | Center on Budget & Policy Priorities (CBPP) |
| SNAP household spending | −$11 billion (reduced grocery sales, rural grocers hit hardest) | USDA ERS SNAP Multipliers |
| State budgets | −$68 billion (new SNAP & Medicaid burdens) | National Governors Association |
| Job loss | −180,000 (lower consumer demand + state layoffs) | Moody’s Analytics |
| Health outcomes | +17 % untreated chronic conditions in states cutting eligibility staff | Kaiser Family Foundation |
Takeaway: OBBA’s tax cuts concentrate gains at the top, while safety-net cuts and cost shifts ripple through state budgets, grocery stores, hospitals, and ultimately Main Street employment.
Other Provisions
1. Automatic Drone-Export Fast-Track
Bill section: Title I-E, § 108
What it does
Any uncrewed air, surface, or subsea system valued under $750 million may be transferred to allies without the customary 30-day congressional notification.
Why it matters
Arms-control lawyers warn this creates the first explicit “drone exception” to the Arms Export Control Act, eroding legislative oversight of lethal-drone exports.
2. Five-Year “Remittances Floor”
Bill section: Title II-B, § 211
What it does
Locks in the new 3.5 % tax on overseas money transfers; no executive waiver may lower the rate for at least five years.
Why it matters
Guarantees the levy survives even if Treasury finds it loses revenue by driving senders to crypto or informal hawala channels.
3. Offshore Book-Minimum-Tax Repeal
Bill section: Title II-D, § 240
What it does
Repeals the offshore corporate book-minimum tax for firms with average annual revenue below $750 million.
Why it matters
Gives smaller multinationals (< 1 % of the Fortune Global 500) a de-facto tax holiday that slipped past headline summaries.
4. Ban on Medicaid PBM “Spread Pricing”
Bill section: Title III-A, § 3232
What it does
Prohibits pharmacy-benefit managers (PBMs) from pocketing price spreads between what they bill Medicaid and what they pay pharmacies.
Why it matters
Cheered by state auditors: PBMs quietly collect $8–10 billion per year via spreads.
5. Quarterly Medicaid Citizenship Cross-Match
Bill section: Title III-B, § 3240
What it does
Requires quarterly checks of every Medicaid enrollee against DHS immigration databases.
Why it matters
CMS actuaries estimate the system could incorrectly flag ≈ 600 000 naturalized citizens each year, risking wrongful terminations.
6. “Guam Exception” to SNAP Cost-Share
Bill section: Title IV-C, § 4115
What it does
Freezes Guam’s SNAP administrative match at 50 %, even as states rise to 75 %.
Why it matters
Quiet concession to Delegate James Moylan (R-GU); almost no mainland coverage.
7. End to SNAP Rural Home-Delivery Waivers
Bill section: Title IV-F, § 4142
What it does
Eliminates USDA waivers that let rural grocers deliver SNAP groceries to homebound recipients.
Why it matters
Hits seniors in food-desert counties; buried in a conforming-amendments table.
8. Full Repeal of “Gainful-Employment” Rule
Bill section: Title V-B, § 512
What it does
Abolishes the rule that cuts for-profit colleges off from federal aid if graduates have unaffordable debt-to-income ratios.
Why it matters
Leaves Title IV funds flowing even to programs with sky-high default risks.
9. Freeze on Nursing-Home Five-Star Ratings
Bill section: Title VI-A, § 6016
What it does
Suspends HHS authority to update the Nursing Home Five-Star Quality Rating System until 2035.
Why it matters
Freezes quality metrics at 2024 baselines, making future public scorecards meaningless.
10. GSA Real-Property “Fire Sale” Pilot
Bill section: Title VII-A, § 70305
What it does
Allows bulk auction of up to 20 “under-utilised” federal buildings without normal screening under the Federal Property and Administrative Services Act.
Why it matters
Public-lands groups fear monuments and historic courthouses could be sold to private developers.
11. 10 % Surcharge on All Federal Payroll Deductions to 501(c)s
Bill section: Title VIII (HSGAC add-on)
What it does
Imposes a 10 % fee on any federal payroll deduction sent to any 501(c) organization, not just unions.
Why it matters
Hits charitable-giving programs like the Combined Federal Campaign; most outlets missed the broad wording.
12. Mandatory FCC Auction of 3.1–3.45 GHz Spectrum
Bill section: Title IX-B, § 92007
What it does
Forces the FCC to auction the entire mid-band block by 2027 and send proceeds to the Highway Trust Fund.
Why it matters
The “spectrum-for-potholes” swap angered Pentagon planners but was overshadowed by the tax fight.
13. Sunset of the PCAOB in 2029
Bill section: Title X-C, § 100312
What it does
Shuts down the Public Company Accounting Oversight Board after 2029.
Why it matters
Would leave audit oversight solely to the SEC; business press barely noticed before the clause was struck in the Senate.
14. Funding Cap for the CFPB
Bill section: Title X-D, § 100402
What it does
Caps annual Consumer Financial Protection Bureau funding at $720 million.
Why it matters
Breaks the bureau’s Fed-transfer model; highlighted its vulnerability even though struck later.
15. 5 % Pay Cut for Federal Reserve Employees
Bill section: Title X-E, § 100506
What it does
Imposes a 5 % across-the-board pay cut for Fed staff.
Why it matters
First statutory Fed salary cut since 1933; mostly unnoticed outside central-bank circles (ruled non-germane under Byrd).
16. 2 % DoD Penalty for Late Budget Submission
Bill section: Title XI, § 110104
What it does
Cuts Defense appropriations 2 % if the President submits a budget > 14 days late.
Why it matters
Discipline cheered by deficit hawks, panned by defense hawks; removed after parliamentarian ruling.
17. ESA Waiver for Carbon-Capture Projects
Bill section: Title XII, § 120008
What it does
Lets Interior waive Endangered Species Act critical-habitat reviews for energy projects claiming a carbon-capture tax credit.
Why it matters
Environmental NGOs call it a stealth carve-out; overshadowed by bigger IRA rollbacks.
18. CPI-E Indexing Quirk in “No Tax on Tips” Deduction
Bill section: Title XIII-A, § 13009
What it does
Indexes the new above-the-line tips deduction to the elderly CPI (CPI-E) instead of CPI-U.
Why it matters
Increases cost by $27 billion over 20 years; omitted from most scores because CPI-E tables sit in an appendix.
19. Cancelled BLM Land Sale
Provision: Manager’s Amendment, 21 May
What it does
Deletes a plan to sell 135 000 acres of BLM land in Nevada & Utah.
Why it matters
Shows how land-sale language nearly slipped through with minimal debate.
20. Scrubbed $2 Billion Black-Budget Add-On
Provision: Manager’s Amendment, 10 Jun
What it does
Removes $2 billion for Pentagon black-budget intelligence programs to satisfy the Byrd Rule.
Why it matters
Black-budget items are rarely acknowledged; their quiet removal drew even less notice.