June 12, 2025
The Congressional Budget Office (CBO) has released a new analysis revealing significant disparities in the financial impact of a domestic-policy package recently passed by House Republicans. The report forecasts a troubling shift in federal resources, predicting financial losses for the nation's poorest and gains for the wealthiest.
The CBO's findings indicate that the lowest-income households in the United States would face a reduction of approximately $1,600 annually in federal benefits if the legislation becomes law. This cut represents nearly 4 percent of their total income, a substantial loss for families already struggling to make ends meet.
Conversely, the highest-income households are set to benefit from an increase of about $12,000 in resources annually, which translates to more than 2 percent of their total income. Middle-income households are not left out, as they are projected to see a modest increase in resources ranging from $500 to $1,000 per year, though this boost constitutes less than 1 percent of their income.
The legislative package includes several tax changes which significantly contribute to this disparity. It proposes extensions of the 2017 Tax Cuts and Jobs Act and an increase in the state and local tax deduction—a provision that predominantly benefits higher-income earners. Additionally, the legislation calls for cuts to crucial social safety-net programs, including Medicaid and food aid, which predominantly support lower-income individuals and families.
The analysis from the CBO highlights a clear shift in fiscal policy that could exacerbate economic inequality in the country. The proposed tax cuts are primarily beneficial to those at the top of the income ladder, while the reductions in safety-net provisions threaten to leave the most vulnerable even more at risk.
As this package moves through legislative processes, with Republicans aiming to secure a victory on President Donald Trump’s campaign promises this summer, the potential repercussions outlined by the CBO raise significant concerns about the broader implications for economic disparity and social equity in the United States.