How H.R. 1, the One Big Beautiful Bill Act, Would Affect the Distribution of Resources Available to Households

This interactive tool illustrates the distributional effects of H.R. 1, the One Big Beautiful Bill Act. It allows users to explore how H.R. 1, as passed by the House of Representatives on May 22, 2025, would affect the economic resources available to households grouped on the basis of their income. (See CBO's estimate of the budgetary effects of the bill.)

In CBO's assessment, the legislation would affect household resources through several channels:

  • Federal taxes and cash transfers (such as Social Security benefits);
  • Federal and state in-kind transfers (such as Medicaid benefits);
  • States' fiscal responses (that is, changes in state taxes and spending resulting from changes in state spending on program benefits); and
  • Other spending and revenues (which CBO allocates as if they were public goods).

Each channel would affect household resources in different ways. The effects are not all directly comparable, so caution should be taken when interpreting the combined effects of different resource channels. For example, both reductions in taxes and increases in border security spending would have a positive effect on household resources in this analysis, but the ways in which households would benefit from them are different.

Select years and resource channels to include

Years included: The graphs drawn by the tool are averages for a given set of years. Choose any number of years within the projection period to see how households would be affected, on average, over that period.

        
        
        

Resource channels. The graphs incorporate the effects of the resource channels (described above) on household resources. Choose one or more channels to include.

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Changes to federal tax policy, especially extensions of provisions of the 2017 tax act and reductions in subsidies for health insurance under the Affordable Care Act, would affect household resources. Changes to student loan programs would also affect those resources.

Tax changes were allocated on the basis of estimates done by staff of the Joint Committee on Taxation; changes in income resulting from student loan policy were allocated on the basis of CBO's student loan microsimulation model.

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Decreases in federal spending on benefits provided through Medicaid and the Supplemental Nutrition Assistance Program (SNAP) would reduce resources available to households. Changes to program benefits states made in response to changes in federal policy would also reduce household resources.

CBO allocated changes to Medicaid to program participants (who would either not enroll or who would receive fewer benefits) and to healthcare providers and insurers (whose revenue would be reduced). Changes to SNAP were allocated to program participants. CBO also accounted for changes in state spending on Medicaid and SNAP stemming from H.R. 1.

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Tax and spending changes implemented by states in response to changes in their fiscal position would affect household resources.

In CBO's assessment, Medicaid eligibility restrictions under the legislation would reduce states' spending on benefits. States would use the savings to reduce taxes and increase spending, both of which would increase household resources.

By contrast, the new matching requirements for SNAP would increase state spending. States would finance that additional spending by increasing taxes and decreasing spending in other areas. Those financing mechanisms would reduce household resources.

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In this analysis, all outlays other than social insurance benefits and means-tested transfers were allocated as if they were public goods. This category includes federal spending on defense, border security, and infrastructure. Those outlays are partially offset by reductions in federal pensions, receipts from spectrum auctions, and changes in receipts and outlays associated with changes to emissions regulations. By default, CBO allocated half of those changes as equal amounts per person and half as equal percentages of household income.

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If users choose to include the effects of other spending and revenues on household resources, they can also choose how to allocate those effects. Setting the proportion per person to 1 allocates all the changes as equal amounts per person. Setting it to 0 allocates all the changes as equal percentages of household income. Setting it to a value between 0 and 1 allocates that proportion as equal amounts per person and the remainder as equal percentages of household income.

Average annual change in resources per household ()

2025 dollars

  Federal taxes and cash transfers
Federal and state in-kind transfers
States' fiscal responses
Other spending and revenues
◇ Net effect

Average annual change in household resources as a percentage of current law income after transfers and taxes ()

Percent

Federal taxes and cash transfers
Federal and state in-kind transfers
States' fiscal responses
Other spending and revenues
◇ Net effect

Average components of income after transfers and taxes under current law ()

2025 dollars per household

  Lowest 2nd 3rd 4th 5th 6th 7th 8th 9th Highest All
Market income
Social insurance benefits
Means-tested transfers
Federal taxes
Income after transfers and taxes

Average projected changes to income after transfers and taxes under policy change ()

  Lowest 2nd 3rd 4th 5th 6th 7th 8th 9th Highest All
Total change (billions of 2025 dollars)
Share of total change (percent)
Annual average change per household (2025 dollars)
Annual average change per household (percentage of current law income after transfers and taxes)

Definitions

Cash transfers consist of Social Security benefits, Supplemental Security Income, unemployment insurance, workers' compensation, income from the Temporary Assistance for Needy Families and State General Assistance programs, and changes to cash flows resulting from changes to student loan policy.

Deciles are created by ranking households by their size-adjusted income after transfers and taxes. A household consists of people who share a housing unit, regardless of their relationships. Each income decile (tenth) contains approximately equal numbers of people but slightly different numbers of households. If a household has negative income (that is, if its business or investment losses are larger than its other income), it is excluded from the lowest income group but included in totals.

Federal taxes consist of individual income taxes, payroll taxes, corporate income taxes, and excise taxes. In this analysis, taxes for a given year are the amount a household owes on the basis of income received that year, regardless of when the taxes are paid. Taxes from those four sources accounted for over 90 percent of federal revenues. The remaining federal revenue sources not allocated to U.S. households include states' deposits for unemployment insurance, estate and gift taxes, net income earned by the Federal Reserve, customs duties, and miscellaneous fees and fines.

Income after transfers and taxes consists of market income, social insurance benefits, and means-tested transfers minus federal taxes.

Market income consists of labor income, business income, capital income (including capital gains), income received in retirement for past services, and other nongovernmental sources of income.

Means-tested transfers are cash payments and in-kind services provided through federal, state, and local government assistance programs. Eligibility to receive such transfers is determined primarily on the basis of income, which must be below certain thresholds. The largest transfer programs are Medicaid and the Children's Health Insurance Program (CHIP, measured as the average cost to the government of providing those benefits), SNAP (formerly known as the Food Stamp program), and Supplemental Security Income.

Public goods are goods and services that share two main traits: If they are consumed by one person, the amount available to other people is not reduced; and it is difficult to prevent people from consuming them once they are available.

Social insurance benefits consist of benefits from Social Security (Old-Age, Survivors, and Disability Insurance), Medicare (measured as the average cost to the government of providing those benefits), unemployment insurance, and workers' compensation.

Data and Supplemental Information

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Feedback

CBO continually seeks feedback to make its work as useful as possible. Please send comments to communications@cbo.gov.

About this Interactive Tool

Bilal Habib and Daniel Page produced the estimates for this interactive tool with guidance from Ed Harris, John McClelland, and Julie Topoleski. The information in this interactive was developed to provide inputs to the Congressional Budget Office's forthcoming dynamic analysis of H.R. 1. The interactive is published as part of the agency's continuing efforts to make its work transparent.

The underlying data are based on CBO's analysis of the budgetary and distributional effects of H.R. 1 and analysis by the staff of the Joint Committee on Taxation of the distributional effects of the tax provisions in that bill.

Casey Labrack developed the interactive tool. Jeffrey Kling and Chapin White reviewed it, and Caitlin Verboon edited it. Maria Aquino and Annette Kalicki integrated it into CBO's website and prepared it for release.

This page was last updated on June 13, 2025.