Natasha Sarin Professor, Yale Law School and Yale School of Management / Yale Budget Lab

At the American Community Media briefing Natasha Sarin, the co-founder and president of The Budget Lab at Yale discussed with the panelists some of the impacts of the new One Big Beautiful Bill Act (OBBBA). The panel pointed out long-term effects of OBBBA on American national deficit and health. 

Broad fiscal impacts of OBBBA

It is Robinhood in reverse, said Natasha Sarin, Professor, Yale Law School and Yale School of Management. The federal deficit will balloon closer to $4 trillion plus over the course of the next 10 years, the Yale Budget Lab estimates. 

“Today, the country's debts are approximately the same size as our entire economic output,” said Sarin. “We have a debt-to-GDP ratio that's close to 100 percent. By the end of this decade, that debt-to-GDP ratio is going to be closer to 135 percent. So our debts are going to exceed our entire economic output by a substantial margin.”

Running higher deficits is going to increase the government's cost of borrowing. Higher interest rates will trickle down to households and the real economy, Sarin said, increasing mortgage costs by thousands of dollars. Mortgage rates are going to be higher for households. Over the course of the next decade small business loans will be more expensive. “Car loans, student loans, basically any type of borrowing that's being done in the economy has been impacted by this legislation and pushed up the cost of borrowing for both households and businesses. That's why the package over the course of the next decade, and even more so over the course of the next three decades actually leads to a smaller economy. The government is making it more costly to invest in the U.S thereby losing economic output i.e GDP.”

Who are the winners, and who are the losers

At the Yale Budget Lab, Sarin and her colleague Richard Prisinzano, Director of Policy Analysis said, “We are asking what exactly are these trillions of dollars being spent on? Who are the winners, and who are the losers? We found that households in the bottom decile (lowest 10 percent) would lose on average about $700 annually in after‑tax and transfer income, a 2.9 percent decline over the decade 2026–2034.”

Under the Senate version of the OBBBA, the top 1 percent of earners would receive an average increase of about $30,000 per year in after‑tax income. Households in the top 0.1 percent, those making above roughly $5.18 million, according to CBS MoneyWatch reporting on 2026 estimates, would benefit by approximately $286,440 annually!  

“The bottom 40 percent of the distribution is actually worse off after this bill than they were before the bill's passage. They're the ones who are bearing the brunt of the cuts in Medicaid and SNAP. The cuts are very deeply offsetting any potential impact of the tax changes that are in the bill.”

The tariff policy hits American consumers with a double whammy 

Lower income households, which spend a higher share of their income on everyday goods essentials like food, energy, housing, and transportation, are particularly vulnerable to rising prices caused by tariffs.

“Effective tariff rates are quite high. They're about 18.7 percent. To give you some context, at the start of this administration they were closer to 2 percent,” Sarin said. 

“Very high earners in certain types of industries are massively benefited by this package, and the rest of the population is massively hurt by the package,”

$900 billion cut to Medicaid is the largest ever cut in the program's history

This bill was not framed as a healthcare reform effort. It was framed more as a tax cut bill but it represents the biggest change to the healthcare system since the passage of the Affordable Care Act 15 years ago, said Larry Levitt, Executive Vice President for Health Policy at Kaiser Family Foundation.

“In its effect it is a partial repeal of the Affordable Care Act erasing much of its gains in health coverage,” he said. The Congressional Budget Office has estimated that the legislation would reduce federal health spending by over a trillion dollars over the next decade and increase the number of people uninsured by 11.8 million. Those are preliminary numbers and will likely come down somewhat, given the last-minute changes to the bill. Still, the scale of the change to the healthcare system is staggering, he said.

4.8 million people are expected to lose health coverage primarily because they fail to navigate the reporting process and the red tape that would be required. Some people would also fall through the cracks, because they will be required to renew their Medicaid coverage more frequently.

The changes to the healthcare marketplace 

Changes to the healthcare marketplace are substantial, he said. New verification procedures for income would make it harder for people to sign up for coverage. End to automatic renewal of coverage at the end of each year could lead to many people having their coverage canceled. Many low-income, lawfully present immigrants would no longer be eligible for premium assistance under the Affordable Care Act as well as Medicaid and Medicare. “These are not undocumented immigrants who have never been eligible for any federally funded health insurance. benefits. These are lawfully present immigrants who fall into categories such as temporary protected status, refugees, or asylees,” he said.

There are potentially efforts underway by the Trump administration to penalize states like California that use their own money to provide healthcare to undocumented immigrants. Less Medicare and Medicaid funding totaling about half a trillion dollars have been waived by Congress, but there's no guarantee that will happen again this year.

Enhanced premium tax credits under the Affordable Care Act are slated to expire at the end of this year. If they're not extended, out-of-pocket premiums for over 20 million ACA enrollees will rise by an average of more than 75 percent and millions are projected to end up uninsured. That will happen on New Year's Day 2026.

“As substantial as the changes in this bill are, they won't all happen immediately. In fact, many of the changes are back-loaded timed after the midterm elections next year and beyond.”