Distributional Effects of H.R. 1, the One Big Beautiful Bill Act
Published on June 13, 2025
Congressional Budget Office
"CBO responds to a request for an analysis of the distributional effects of H.R. 1, the One Big Beautiful Bill Act, and updates the preliminary analysis it provided in a letter dated May 20, 2025.
This letter responds to a request for an analysis of the distributional effects of H.R. 1, the One Big Beautiful Bill Act, and updates the preliminary analysis the Congressional Budget Office provided in the letter dated May 20, 2025.
CBO and the staff of the Joint Committee on Taxation (JCT) recently estimated the budgetary and distributional effects of H.R. 1 as passed on May 22, 2025. On the basis of those estimates, CBO allocated the effects on revenues and spending to households. The agency also allocated to households the effects of states' estimated responses to changes to health programs-primarily Medicaid-and the Supplemental Nutrition Assistance Program (SNAP).
CBO estimates that if the legislation was enacted, U.S. households, on average, would see an increase in the resources available to them over the 2026- 2034 period. The changes would not be evenly distributed among households. The agency estimates that in general, resources would decrease for households toward the bottom of the income distribution, whereas resources would increase for households in the middle and top of the income distribution.
This analysis includes most, but not all, provisions of H.R. 1. The distributional analysis of changes to taxes and tax-related outlays is based on analysis done by JCT. Therefore, the analysis in this letter excludes any tax provisions not allocated in JCT's distributional analysis of H.R. 1. Also, CBO's analysis does not reflect the effects of the additional debt-service costs or the macroeconomic effects of the bill.
CBO estimates that the budgetary effects of the legislation would affect household resources through four channels over the 2026-2034 period:
Federal taxes and cash transfers would increase household resources by $3.1 trillion, on net (in 2025 dollars). In particular, changes to federal tax provisions, especially extensions of provisions of the 2017 tax act and reductions in subsidies for health insurance under the Affordable Care Act, would affect household resources. Changes to student loan programs would also affect those resources.
Federal and state in-kind benefits would decrease household resources by $1.0 trillion, primarily because federal spending on benefits provided through Medicaid and SNAP would be lower. Changes to program benefits that states made in response to changes in federal policy would also reduce household resources.
States' fiscal responses would increase household resources by $10 billion, on net. Those responses consist of the tax and spending changes implemented by states in response to changes to their fiscal position. In CBO's assessment, Medicaid eligibility changes under the legislation would reduce states' spending on Medicaid benefits. Those decreases would be largely offset by the new matching requirements for SNAP, which would increase state spending. In CBO's analysis, states, in the aggregate, would use the resulting overall reduction in benefit spending to increase spending in other areas and to reduce taxes, both of which would increase household resources.
Other spending and revenues would increase household resources by $129 billion, on net. The spending and revenues in this category were allocated as if they were public goods. This category includes federal spending on defense, border security, and infrastructure. Those outlays are partially offset by reductions in federal pensions, receipts from spectrum auctions, and changes in receipts and outlays associated with changes to emissions regulations."
