President Trump signed his so-called “One Big Beautiful Bill Act” last week — an omnibus tax and spending package that could significantly reshape the social safety net both nationally and in New York.

The $4.5 trillion law funds continuing tax cuts for the wealthy, originally passed in 2017 during Trump’s first term, as well as beefing up immigration enforcement and border security. It pays for the increased spending on those priorities by making steep cuts to services like Medicaid and the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps.

Trump signed the law on July 4 after it passed the House mostly along party lines last Thursday.

The legislation’s passage drew immediate rebukes from New York Democratic elected officials, who warned that it will devastate both the city and state budgets and cut public assistance for millions of people.

“There’s nothing beautiful about this bill. It’s a big, ugly betrayal — stripping health care, hiking costs and slashing food assistance for millions,” Hochul said in a statement after Trump signed the bill last week. “I’ve been very clear that no state can backfill the massive cuts in this bill or undo the damage Republicans just caused. But my team and I are working closely with the legislature to brace for the impact and protect as many New Yorkers as possible.”

Hochul signed off on a $254 billion state budget in early May, which significantly increased spending, while mostly not accounting for the looming federal funding reductions. She and state legislative leaders are reportedly huddling in Albany this week to assess the law’s impact on the state spending plan.

The legislation has certain measures that will take effect immediately, such as raising a cap on the state and local tax deductions — known as the SALT. Other provisions, like new Medicaid eligibility rules that will significantly reduce the program’s rolls, will not kick in until next year or later.

SALT Cap

Raising the $10,000 SALT cap, which was instituted when Trump first passed his massive tax cuts in 2017, was a top priority of New York’s Republican Congressional delegation — all seven members of which voted for the spending package.

The change will see the cap raised from $10,000 to $40,000 starting this year. The full deduction will be for taxpayers earning up to $500,000 annually, with an income phase out. The deduction will revert back to $10,000 in 2030.

Hudson Valley GOP Rep. Mike Lawler, who was a big proponent of raising the SALT cap, posted a video to social media on July 3 that celebrated the law as providing “historic tax relief.”

“I’m proud of the work we did to lift the cap on SALT, increasing it 4x, increasing it to $40,000 from the current $10,000 cap, providing the largest tax cut in the entire bill,” said Lawler, who represents a vulnerable House seat and is mulling a run against Hochul next year.

However, the Fiscal Policy Institute, a New York-focused economic policy think tank, estimates those making $300,000-a-year or below are “unlikely to benefit from the change at all.”

No tax on tips

Another provision in the law will allow tipped workers to deduct $25,000 in tips annually from their taxes. Anything over that amount will still be federally taxed.

However, the change will not apply to those making over $150,000-a-year. It also would primarily benefit higher-income tipped workers, because those who make less than the standard deduction already owe no federal income taxes, according to a published report. 

The tax relief will take effect this year but is due to expire at the end of 2028.

Medicaid Cuts

The governor’s office estimates that the law would strip health insurance from 1.5 million New Yorkers by slashing funding for Medicaid and the state’s Essential Plan — the latter of which is fully funded by the federal government under the Affordable Care Act. The Fiscal Policy Institute warns that the state’s uninsured population would double if the measure is enacted.

Hochul’s office also projects the legislation would result in $8 billion in cuts to New York’s hospital and health care system.

The legislation eliminates federal funding for legally present immigrants enrolled in the Essential Plan, including Green Card holders. To maintain coverage, the state would need to shift those individuals to Medicaid at an estimated cost of $2.7 billion annually, according to the Fiscal Policy Institute.

Another 250,000 immigrants would become uninsured because they will be above the Medicaid income requirement.  

Additionally, the state will have to shell out roughly $500 million in order to institute new eligibility checks for Medicaid, including a twice-a-year recertification and an 80-hour-a-month work mandate for able-bodied adults. Similar added paperwork requirements in other states have led many Medicaid recipients to be kicked off of the rolls even when they are eligible for the benefits, according to the think tank.

The changes will start kicking in next year, with some going into effect in 2027 and beyond. For instance, the work mandate begins Jan. 1.

Rep. Nicole Malliotakis (R-Staten Island/Brooklyn), a staunch Trump ally, celebrated the passing of the legislation: “Congress simply took action to ensure ineligible fraudsters and illegal immigrants no longer benefit and that able-bodied young adults work, volunteer or learn part-time.”

“By rooting out waste, fraud and abuse we are actually preserving the Medicaid program for our most vulnerable citizens and ensuring hardworking families and senior citizens get the much needed tax relief they deserve,” she added.

SNAP Cuts

The legislation will also cause nearly 300,000 New Yorkers to immediately lose their SNAP benefits, according to the Fiscal Policy Institute. Like with Medicaid, that is due to new more stringent work eligibility requirements for the program.

An additional 413,000 people will be at risk of losing their benefits, according to the think tank, and 363,000 children who live with those adults could be cut off from food assistance.

“We are disappointed that a majority of our elected officials in Congress stood behind the most extreme cuts to SNAP in history,” said George Kelemen, in a statement for Share Our Strength’s No Kid Hungry campaign.

“Nearly one in five children in our country face hunger and SNAP helps feed nearly 16 million of them,” he added. “We agree with the 86% of Americans who opposed these cuts because they know SNAP is one of our most powerful tools to fight hunger.”

Furthermore, the law will shift $2.1 billion in annual federal spending on SNAP to the state.