The White House warns that failure to pass Trump’s new budget could cause a severe recession and strip health insurance from 9 million Americans, deepening the national coverage crisis.
At a Glance
- White House study projects 9 million could lose health coverage if bill fails.
- Recession fears tied to expiring 2017 tax cuts, with 6.5 million jobs at risk.
- GOP budget proposes $625 billion in healthcare cuts, including Medicaid changes.
- Non-citizens could lose state health plan coverage; NY faces $2.8B annual loss.
- Republicans remain divided, stalling the 1,116-page budget bill in committees.
Insurance Crisis Looms
As President Trump’s proposed budget inches through Congress, a White House economic analysis forecasts dire consequences if the bill fails. The Council of Economic Advisers warns of a potential 4-point spike in unemployment—translating into 6.5 million lost jobs—and a rise in the number of uninsured Americans from 27 million to 36 million.
A key driver of this projection is the expiration of Trump’s 2017 tax cuts, which economists say could trigger a “moderate to severe recession.” Those hit hardest would be workers with employer-sponsored health plans, making up 60% of the projected insurance losses.
Watch a report: Health Coverage at Risk Under New Budget.
The $625 Billion Gamble
The 1,116-page legislation—nicknamed the “One Big Beautiful Act”—includes $5 trillion in tax cuts and bold new benefits like MAGA child savings accounts and tax breaks for U.S.-made car loans. But it also slashes federal healthcare spending by $625 billion, significantly altering programs like Medicaid and ACA subsidies.
One proposal would restrict insurance tax credits for non-citizens, threatening plans like New York’s Essential Plan, which could lose $2.8 billion per year. Another would penalize states for covering immigrants and impose work requirements on Medicaid recipients—though these wouldn’t take effect until 2029.
Divided GOP, Uncertain Path Forward
Despite House Speaker Mike Johnson’s push for passage, internal GOP divisions have stymied momentum. Several budget packages have been rejected in committee, revealing fractures between fiscal conservatives and moderates wary of electoral backlash. Some Republicans argue the cuts are necessary to rein in spending, while others fear the political cost of booting millions from public health programs.
Even if passed, the legislation’s sweeping reach has left many Americans—particularly low-income families and non-citizens—uncertain about their healthcare future. Medicaid and ACA enrollment could drop by 10–15%, the White House study warns.
Whether “One Big Beautiful Act” becomes law or stalls in Congress, the message is clear: the stakes are high, and millions may soon find themselves without a safety net.
