This summer, Congress passed the “One Big Beautiful Bill Act,” (H.R. 1) a massive piece of legislation that includes tax reform, defense and immigration enforcement spending, and cuts to vital safety net programs.
The bill cuts over $1 trillion in federal spending on safety net programs that provide people with low incomes the assistance they need to help make ends meet, including Medicaid and SNAP. The Congressional Budget Office (CBO) estimates that the 10% of households with the lowest incomes will lose an average of $1,200 per year because of cuts to assistance programs. For households with low incomes already struggling to make ends meet, the additional strain these cuts will place on their budgets will have a devastating impact on their ability to put food on the table, afford medical care, and keep a roof over their heads. In contrast, the bill’s tax breaks will provide the 10% of households with the highest incomes an additional $13,600 per year, on average.
Among the tax provisions, the bill permanently expands two provisions of the LowIncome Housing Tax Credit (LIHTC) program. LIHTC is the primary way in which affordable housing construction is financed in the United States. While it is an important program, LIHTC units are rarely affordable enough for households with the lowest incomes. Even though the LIHTC provisions are estimated to result in the construction of an additional 1.22 million affordable homes over the next decade, the additional financial strain put on low-income households because of the other provisions of this bill will continue to keep housing out of reach for those with the most urgent affordable housing needs.