Trump's "Big, Beautiful Bill" Meets a Wobbly Jobs Market
What happened?
After a lengthy House vote, lawmakers adopted the Senate-passed text of President Trump's "One Big Beautiful Bill" by a vote of 218–214. The Senate approved the $4.5 trillion tax-and-spend package two days earlier by a vote of 51–49 under reconciliation rules. According to the White House, Trump will sign the bill today at a ceremony, as no further votes are required.
Source: Scott Applewhite/AP
Why does this matter?
Fiscal blowout: Wharton projects that the measure will add $3.2 trillion to the deficit over ten years and reduce GDP growth by 0.3 percentage points.
Social safety net cuts: The CBO estimates that 11 million people will lose Medicaid or SNAP benefits due to new work requirements and funding caps.
Market signal: Manufacturing and defense stocks rallied due to bonus depreciation and rearmament clauses, while hospital shares fell due to Medicaid cuts.
What's the counterpoint?
Trump touts the package as providing seniors with the largest tax break in American history via Social Security relief. He claims that supply-side incentives will generate growth that will pay for itself. Supporters note that the bill locks in research and family tax credits, as well as deductions that business groups have lobbied for since 2022.
finformant view
Short-term stimulus from tax relief will be offset by lower transfer payments and higher borrowing costs. With private hiring already weak and continuing claims trending up, there is a risk of a fiscal-monetary collision: looser fiscal policy and tighter real rates.