Federal Anti-Labor Tracker

THE BIG BAD BUDGET BILL

Maryland State and DC AFL-CIO
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Message from President Donna S. Edwards.....................

DEAR LEADERS AND ACTIVISTS:

I am providing detailed information developed by the AFL-CIO regarding the recent budget bill, pushed by the Trump administration and passed by the GOP House of Representatives. There may be small items that some people who work for a living may benefit from for two years, 2026-28 but everyone other than the wealthy will feel these cuts to programs forever.

We are fighting these cuts in the Senate and must remind House Republicans that they hurt thousands of their constituents who rely on federal programs including clean energy projects, affordable health care, rural hospitals, and public services such as school, water, transportation and roads, and fair redress of government actions.

PLEASE read this information and inform all of your members and friends what is to come if we do not stop this in the Senate.

A few highlights: 

Lifts the debt ceiling – the legal limit on the amount the U.S. government may borrow, by $4 trillion. A dozen GOP senators and 49 House Republicans — more than 20% of each conference — have never previously voted for a law raising the debt ceiling, according to an analysis of roll call votes and data from the Congressional Research Service. These members never voted to increase funding or services for every day working people to even ensure Social Security benefits and Medicaid– but are happy to increase the limit when providing tax cuts for the wealthy.

Justice Policy: Protect Administration Lawlessness

  • Requires a financial bond to enforce their rights – The bill seeks to make money off citizens’ attempts to enforce the law against the Trump Administration. It requires plaintiffs suing the government for rights violations to post a bond before a judge’s contempt order can be enforced. Such bonds could amount to tens of millions of dollars in some cases, thereby posing a huge financial obstacle to anyone seeking to hold the Administration accountable for lawbreaking.

Thank you for your IMMEDIATE ACTION. 

IN SOLIDARITY,

DONNA S. EDWARDS

PRESIDENT

THE BIG BAD BUDGET BILL

The Big Picture 

The end result of this bill’s imbalanced approach is less security for everyone but the wealthy.

This bill will harm working families who may not directly rely on federal safety net programs and most directly hurt those who have to rely on the federal safety net, of whom millions are hardworking taxpayers. Medicaid funding keeps many hospitals, particularly in rural areas, solvent and operating. Without this funding, more rural hospitals will fail, causing health care job loss, and there will be upward pressure on medical costs as remaining hospitals have to make up for lost revenue. Cuts in SNAP, and Medicaid will also squeeze state budgets. This may result in ending programs or shifting funding from other services such as public works, education, or public safety, causing further job loss. Walking away from federal investments in clean energy will mean less work in construction and manufacturing. And any individual benefit from one exemption or another for any single taxpayer who is not at the very top of the income scale would likely be eaten up by higher medical and education costs caused by this bill. The end result of this bill’s imbalanced approach is less security for everyone but the wealthy.

BUDGET RECONCILIATION BACKGROUNDER

State of Play

  • House – In the early hours of Thursday, May 22, the House passed the “One Big Beautiful Bill Act,” advancing a number of President Trump’s priorities surrounding tax cuts, federal spending cuts, energy production, and immigration. The bill narrowly passed (215-214), with two Republicans, Warren Davidson (OH-8) and Thomas Massie (KY-4), voting against the bill; both Republicans who voted nay argued that the bill did not cut federal spending enough in the immediate term. Varying groups of House members had signed letters opposing Medicaid, SNAP, and IRA tax credit cuts but ended up being whipped by Trump into voting for this bill which contains all these things.
  • Senate – The Trump administration has set a July 4 deadline for the final passage of the bill. With the House passing the bill, it will go to the Senate, where it is immune to the filibuster due to reconciliation processes. In other words, it only needs 51 votes in the Senate. Various Senate Republicans have expressed strong concerns about various aspects of the House bill. As the Senate process gets underway, Republican leaders will be looking to cobble together those 51 votes, so those various Senate critics of the House bill will be making their demands. At the same time, the bill will undergo a “Byrd bath,” where Senators can object to provisions in the House bill that do not have the required impact on the federal budget. Some nonbudgetary provisions, therefore, could be stripped out by rule, unless 51 Senators vote to overrule the parliamentarian. While the bill could bounce back and forth between the House and Senate, we should expect Republican leaders to aim for a deal that satisfies 51 Senators while retaining majority support in the House, so that when a deal is made, it passes the Senate and is passed unchanged in the House. 
  • The time to affect change in the bill in the Senate is now and through June.

Key provisions in the House-passed bill which the Senate is now considering:

Tax Policy: Robin Hood in Reverse – The bill redistributes money from the lowest income households to the highest income households. 

  • Nonpartisan budget modeling shows the overall impact of the bill. People who make less than $51,000 would see their after-tax income decrease by more than $700 in 2026 if this bill becomes law. Meanwhile, during that same first year, the top one percent would see their income increase by over $44,000, and the top tenth of one percent would see their income increase by over $389,000. (source: Penn Wharton Budget Model)
  • Child Tax Credit – denies full Child Tax Credit benefits to as many as 20 million children in working families simply because their parents earn too little. Meanwhile, families at the other end of the scale, making up to $400,000 per year, would receive the full increase in benefits. A new private school voucher scheme piles on, draining needed public resources from public schools.
  • Permanent increased tax cut for estates worth up to $30 million – many of the beneficiaries of this change are already among the highest income-earners 
  • Permanent tax deduction for “pass-through” businesses – another giveaway to businesses at the expense of working people. 
  • Increase to the State and Local tax deduction (SALT) from $10,000 to $40,000 with an income cap of $500,000 that increases 1% each year for 10 years.  
  • Lifts the debt ceiling – the legal limit on the amount the U.S. government may borrow, by $4 trillion. A dozen GOP senators and 49 House Republicans — more than 20% of each conference — have never previously voted for a law raising the debt ceiling, according to an analysis of roll call votes and data from the Congressional Research Service. These members have been willing to hold this authority hostage when negotiating increasing funds or services for everyday Americans – but are happy to increase the limit when providing tax cuts for the wealthy.[1] 

Health Care Policy: Less Health Care, Less Jobs, and Higher Prices – The bill results in health care funding cuts of more than $1 trillion by cutting more than $716 billion from Medicaid,[2] allowing $385 billion in Affordable Care Act enhanced premium tax credits to expire, and creating barriers to enrollment. 

  • Health care cuts and loss of coverage - The Congressional Budget Office (CBO) estimated that these policies will leave 15 million people uninsured[3] – through a loss in benefits, increased red-tape and work requirements, or higher premiums. Republicans claim that they will “reduce wasteful spending” by encouraging Medicaid enrollees to work. Work requirements are a centerpiece of their legislation. However, Medicaid is proven to help keep people in the workforce – work requirements are really just red tape barriers to enrollment that are intended to kick people off of insurance. While the bill originally delayed implementation of work requirements until 2029, the House-passed version institutes these new standards by 2027. 
  • Less Coverage = Higher Costs and Less Access - Millions kicked off Medicaid will turn to ACA subsidies but be unable to afford this alternative. Millions more with coverage will face increased copays and deductibles, and no ACA insurers will cover abortion unless it is the result of rape or necessary to save the mother’s life. George Washington University studies show that hundreds of thousands of health care workers will lose their jobs. People in underserved and rural communities will lose access as hospitals and nursing homes close. Providers will raise their prices to compensate for substantial drops in revenue, raising costs and premiums for everyone who uses health care. Taken as a whole, the bill makes health care less affordable and less accessible, the opposite of what working people need. 
  • State Budgets will suffer - States will lose hundreds of billions of dollars in federal funding as a result of these changes, constraining their capacity to fund other priorities such as education, transportation, and public safety. Meanwhile, States using their own funding to provide immigrant families with Medicaid coverage will also be penalized through reductions in federal funding for other populations. Medicaid represents the largest source of federal funding to the states – 56%. Simple math shows this will have a devastating impact on state budgets. 
  • Nurse Staffing Standards - The bill also stops efforts to make health care safer for nursing home workers and the residents they care for. The bill postpones until 2035 a minimum staffing standard for facilities participating in Medicaid and Medicare that would have saved the lives of 13,000 residents annually; the minimum staffing standard would also prevent all too common disabling injuries among nursing home workers in poorly staffed facilities. The bill strips away job protections for nursing home workers that are working in dangerously understaffed nursing homes and are among the lowest paid health care workers in the country.  
  • Reduces long-term care benefits in high-cost areas – The bill kicks seniors and people with disabilities off of Medicaid coverage for nursing home or in-home care in high cost areas by limiting eligibility based on home value and other assets.
  • Cuts Medicare benefits for lower-income seniors – Creates red tape paperwork requirements that will prevent lower-income seniors and people with disabilities from applying for lower premiums and copayments.[4]
  • Rips Medicare and Medicaid coverage away from immigrant families – Forbids thousands of lawfully present immigrants from obtaining Medicare coverage despite having paid into Medicare over the course of a career. Imposes $13 billion[5] in penalties on states that use their own funding to cover undocumented immigrant families in Medicaid.

Several Republican Senators have expressed concerns regarding the depth of unpopular cuts to Medicaid, and the new restrictions on access ranging from Senate moderates, like Sens. Collins and Murkowski, to conservatives, like Sen. Hawley. 

Food Policy: Buy Less Food – The bill included the single largest cut to the Supplemental Nutrition Assistance Program (SNAP) in history: $300 billion over the next ten years. SNAP is the nation’s most effective anti-hunger program, helping more than 40 million people afford groceries each month and currently costs only $6.20 per person per day, less than the average price of a cup of coffee 

  • Reduce the number of people served – To achieve this level of cuts, the bill redefines what a dependent child is under SNAP from 18 years to under seven years in age. If it becomes law, nearly 11 million people, including 4 million children, could lose access to SNAP. As a result of these cuts, many states will be forced to either reduce the number of people served or consider abandoning the SNAP program altogether. 
  • Cap the amount regardless of rising food prices – The bill would permanently block future updates to the formula the government uses to calculate how much money SNAP recipients get each month, meaning SNAP benefits would no longer rise even if grocery prices continue to climb. 
  • Harm local economies – SNAP creates and supports jobs along the food supply chain, with union members on the front lines: on meat-cutting floors, delivering and preparing food for school meals, processing SNAP benefits, serving meals to school children, and checking out customers at the grocery store. Those jobs are threatened by these cuts. When families lose SNAP benefits, they buy less food, and that means fewer hours and fewer jobs for the people who grow, transport, sell, and serve that food. Together the Medicaid and SNAP cuts threaten to destroy over one million jobs in short order (source: The Commonwealth Fund). More than 27,000 SNAP authorized retailers stand to lose a critical source of revenue that could threaten their ability to remain open, especially in rural counties, where grocery stores derive more than fifty percent of their sales from SNAP benefits. (source: CAP)
  • Children hit the hardest by lost benefits – Half of all children whose parents work but never earned a college degree rely on SNAP and Medicaid. New “work requirements” would force people to complete complicated paperwork just to keep their benefits, and even small errors could lead to families losing food assistance. In Arkansas, when similar rules were tried for Medicaid, thousands lost coverage, not because they didn’t meet the requirements, but because they got caught in the red tape. 

Federal Workforce Policy: Cut Workers’ Pensions and Rights – The final bill  extracts around $15 billion from the pockets of federal workers, mainly from their pensions. All these cuts are borne disproportionately by veterans, who make up nearly a quarter of the federal civilian workforce.

  • Filing Fee - For months, the current Administration has been engaged in aggressive and chaotic violations of federal employee rights, and the bill seeks to raise money off the lawlessness by charging workers a $350 fee for filing a claim to have their rights enforced by the U.S. Merit Systems Protection Board.
  • At-Will Employment - The bill requires new hires to pay additional contributions (5 more percent) to the Federal Employees Retirement System (FERS) unless they choose “at-will” employment status. This provision will force workers to pay for their civil service protections. This is unionbusting, as the “at-will” status will override any union contract to the contrary. After Trump stripped one million federal workers of their collective bargaining rights and union contracts via executive order, this provision goes after what is left.
  • FERS Annuity Supplement - The legislation also eliminates early retirement supplemental pay for federal workers, except those subject to mandatory early retirements, for workers that retire before eligibility for Social Security. The provision claws back vested retirement benefits and could impact individuals taking voluntary early retirement as a result of reductions in force.

Justice Policy: Protect Administration Lawlessness

  • Requires a financial bond to enforce their rights – The bill seeks to make money off citizens’ attempts to enforce the law against the Trump Administration. It requires plaintiffs suing the government for rights violations to post a bond before a judge’s contempt order can be enforced. Such bonds could amount to tens of millions of dollars in some cases, thereby posing a huge financial obstacle to anyone seeking to hold the Administration accountable for lawbreaking.

Tech and Consumer Policy: Let Big Business Reign and Leave Workers Unprotected

  • Preempts state and local regulation of AI - Tucked into this bill is a provision that would preempt state and local laws governing artificial intelligence (AI). As AI systems increasingly mold critical aspects of Americans’ lives in areas such as hiring, housing, healthcare, policing, and financial services—states have taken important steps to protect their citizens from the risks posed by unregulated or inadequately governed AI technologies. Inclusion of this dangerous provision would strip states of their ability to enact critical safeguards against AI-related harms or enforce existing ones for the next decade. The preemption is so broad that states might not be able to enforce safety regulations on the automated systems involved in public transit. Workers in wide-ranging industries are counting on states to enforce their laws and continue to make policy as AI unfolds. Congress should not get in the way.
  • Cuts to the CFPB - The bill also cuts funding for the Consumer Financial Protection Bureau (CFPB), which protects consumers from unfair, deceptive, or abusive practices in the financial services industry. These cuts will significantly hamper the agency’s mission and will allow predatory institutions and businesses to continue to defraud consumers.

Industrial Policy: Cut Investments at Home and Send Jobs Overseas – This bill will mean job losses for our members, more dependence on foreign manufacturers, and higher energy prices for American families and businesses.

  • Terminates tax credits - The Inflation Reduction Act created a boom in American manufacturing, innovation, and deployment of energy infrastructure through tax credits. This bill terminates critical tax credits years before they were meant to sunset, some as early as the end of this year. Withholding these federal dollars will mean closed factories, less electricity, and jobs lost.
  • Clean Electricity Production Tax Credit - Phase out begins in 2028 with increased restrictions
  • Clean Electricity Investment Tax Credit - Phase out begins in 2028 with increased restrictions
  • Advanced manufacturing Production Tax Credit - terminated after 2031, terminated for wind energy after 2027, and increased restrictions
  • Clean Hydrogen Production Credit - terminated for facilities built after 2025
  • Nuclear Power Production credit - Phase out begins in 2029 with increased restrictions
  • Rescinds loans - This bill rescinds money from the Department of Energy’s Loan Program Office. This office finances large and expensive energy and manufacturing projects, like the Vogtle nuclear plant. Without this financing, future projects will not get built.
  • Rescinds grant funding - This bill rescinds the money supporting a wide range of projects around the country like water infrastructure, rooftop solar power, and emissions reductions for cleaner air. Not only were those projects designed to benefit our communities, those projects would be planned, built, and maintained by American workers.
  • Encourages outsourcing - When it comes to ensuring jobs stay here, the bill doubles down on glaring loopholes in the tax code. The 2017 Trump tax law created a special, half-off tax rate for offshore profits compared to domestic profits, and an even bigger break for building plants and equipment overseas, resulting in more investments overseas and less investments here at home. By permanently extending this $174 billion worth of special breaks for foreign income, the bill encourages companies to send jobs overseas.

Several Republican Senators have expressed concern regarding the deep cuts into clean energy programs demanded by House conservatives – leaving the ultimate fate of these provisions subject to changes in the Senate.

Education Policy: Making College Less Affordable – The bill continues the Trump Administration’s attacks on schools, access, and their independence:

  •  Reduces Student Financial Assistance - The legislation restricts student financial and loan assistance programs, including the popular Pell Grant program and Parent PLUS loans, cutting off essential financing options for working families and graduate students. It also restricts eligibility for these programs by redefining full-time credit hours, disproportionately harming part-time students, working adults, and those balancing school with family obligations. While decreasing access to these programs, borrowers with a college degree are estimated to pay an additional $2,928 per year.[6]
  • Threatens Borrower Protections - The bill also threatens to expose students to greater risk of debt from predatory institutions by repealing crucial borrower protections, including gainful employment, borrower defense, and closed school discharge rules. In that vein, the bill creates a $5 billion private school voucher program – stripping much-needed resources from public schools. These changes could result in school closures or teacher layoffs as a result of stretched budgets and resources.

Taxes on Workers: Temporary Exclusion of Taxes on Overtime and Tips – The bill has two provisions that were added to reduce the taxes paid by those who earn overtime and tips. 

  • No Taxes on Overtime - The no taxes on overtime provisions will affect less than 4% of the workforce who are eligible for overtime (about 13 million workers) due to the fact that even if eligible, few workers actually work overtime. Because the deduction is provided only to those workers considered non-exempt for FLSA overtime purposes, various groups of workers are excluded from this tax benefit, such as many transportation workers or any other worker subject to the Railway Labor Act. There are income caps for being eligible ($160,000) and the exclusion of tax on overtime expires in 2028. 
  • No Tax on Tips - No taxes on tips would affect approximately 4 million workers who work in tipped professions. Many of these workers are already at earning levels that are so low they are excluded from many income taxes. The bill limits the deduction to $25,000, caps income at $160,000, and also expires in 2028.  

In all, these tip and overtime policies may be popular with some segments of the workforce that stand to benefit because of their type of work. Some unions are supportive of the underlying policy to put more money in workers’ pockets. But on average, these temporary tax breaks deliver far fewer benefits for workers than wage-boosting policies like raising the minimum wage would. In the bill, these overtime and tip provisions are temporary, compared to the permanent cuts to things like Medicaid and IRA tax credits, which will drive up household costs for everyone for items like health care and energy. In other words, these tax benefits may help some workers pay for a portion of the needless rise in costs promised by the rest of the bill.

The Big Picture

While the most direct effects of these policies hurt those who have to rely on the federal safety net, of whom millions are hardworking taxpayers, they will also harm working families with less interactions with these programs. Medicaid funding keeps many hospitals, particularly in rural areas, solvent and operating. Without this funding, more rural hospitals will fail, causing health care job loss, and there will be upward pressure on medical costs as remaining hospitals have to make up for lost revenue. Cuts in SNAP, and Medicaid will also squeeze state budgets. This may result in ending programs or shifting funding from other services such as public works, education, or public safety, causing further job loss. Walking away from federal investments in clean energy will mean less work in construction and manufacturing. And any individual benefit from one exemption or another for any single taxpayer who is not at the very top of the income scale would likely be eaten up by higher medical and education costs caused by this bill. The end result of this bill’s imbalanced approach is less security for everyone but the wealthy.

[1]https://www.nbcnews.com/politics/congress/gop-ponders-raise-debt-ceiling-dozens-members-ve-always-held-rcna188824 

[2] https://www.cbo.gov/publication/61420

[3]https://www.cbpp.org/sites/default/files/5-19-25health-bythenumbers.pdf 

[4] https://justiceinaging.org/broken-promises-republicans-budget-reconciliation-bill-would-cut-medicare/

[5] https://www.cbo.gov/publication/61420

[6] https://protectborrowers.org/preliminary-economic-analysis-of-budget-reconciliation-proposal-on-student-loan-repayment/?emci=fe1c3ca9-5136-f011-a5f1-6045bda9d96b&emdi=eeb8add8-1a37-f011-a5f1-6045bda9d96b&ceid=35175891