On May 22, 2025, the US House of Representatives passed its version of the budget reconciliation bill (HR 1), which includes substantial changes to both social safety net programs and tax policies. We examine key aspects of the bill related to Medicaid, SNAP, and federal income taxes and credits. We find that families with below-poverty resources, as designated by the Supplemental Poverty Measure (SPM), make up the majority of those made worse off by the bill. Also, among the families in poverty prior to full implementation of the bill, average resource losses far outweigh average gains.

Why This Matters

HR 1 proposes major changes to Medicaid and SNAP, with estimates showing fewer people will receive benefits as a result. While some of the changes to federal taxes and credits will benefit families, others will result in certain families no longer qualifying for credits. Various estimates have shown the potential impact of individual elements of the bill. Our analysis seeks to understand how the combined effects of these policy changes could impact economic well-being and poverty.

What We Found

Our preliminary estimates of the combined impact of key elements of the House bill show the following:

• Families with resources below poverty make up 57 percent of the families who lose resources, while families with resources of at least four times the poverty level make up only 1 percent of those who lose resources.
• Families with resources below poverty make up 6 percent of the families who gain resources, while families with resources of at least four times the poverty level make up 27 percent of those who gain resources.
• Of the 13 million families in poverty that we estimate could lose resources as a result of the proposed policy changes, the average family would lose $2,528 annually, compared with an average resource gain of $470 for the 5 million families in poverty we estimate would gain resources.

How We Did It

We used the Analysis of Transfers, Taxes, and Income Security (ATTIS) microsimulation model to estimate the combined impact of key benefit and tax policy changes in HR 1. We estimate the bill’s impact by comparing it to the current system of safety net programs, taxes, and tax credits, assuming the Tax Cuts and Jobs Act (TCJA) provisions expire as scheduled. To project the impact of the bill, we consider the following elements:

• Supplemental Nutrition Assistance Program (SNAP). Changes to future updates of the Thrifty Food Plan, work requirements, eligibility for certain noncitizens, and a new requirement for states to pay a share of the costs of benefits.
• Medicaid. Work requirements (community engagement) and reductions in caseload due to other proposed policies, including changes to the frequency of eligibility determination, federal matching rates when state funds are used for certain noncitizens, application processes, and provider taxes used to finance state Medicaid spending.
• Federal income taxes and credits. TCJA changes in tax rates and brackets, the child tax credit (CTC), standard deductions, personal exemptions, and the alternative maximum tax made permanent; changes in business income deductions and in the cap on state and local tax deductions; and a new CTC Social Security number requirement for parents.