This week the Trump administration passed a very large and possibly the only legislation they will accomplish this year. There are a lot of articles about what it means and what it will do to and for America, but I’m going to set those aside. If you’re reading this long after July 4th 2025, Google will no doubt lead you to everything you need to know.
I wanted to save this space to talk about two things: Predictions about what will happen in the future because of this bill, and specifics about how it will affect our finances.
The Future
There has been a lot and hand wringing from the left over this bill. Some of it for what I think is good reason, and some of it for more incendiary reasons. I’m going to try and steer away from the more hyperbolic ideas, but I don’t know if this will be helpful or not. Predicting the future is hard, yo.
On the whole I don’t think the Big Beautiful Bill will change much. I suspect it will effect us less than most of my friend on the left might think. In part because the cuts to SNAP will not start until October 2027, and many of the changes to medicare (like work requirements) will not start until December 2026. That is to say the bill that the American people will have to pay for it will not come due for a few years yet. I don’t know that this will help Democrats in the mid-term elections as the voters they are appealing to may not have noticed the looming bill by November 2026.
And the more positive side, the tax cuts sold in this bill are not really tax cuts. They are merely keeping the existing ones passed by Trump in 2017, which would otherwise have expired next year. They are not current taxes that will be saved, they are future taxes that were averted. So except for small areas like in Social security (see below) there is not going to be a huge influx of cash to regular voters.
Financially, It would be reasonable to suggest that the BBB will move past and not leave much of a wake. Oh politicians are gonna talk about it endlessly. If nothing else the Republicans have put their names to a piece of legislation that gives the largest cut in public assistance in American history, while also running up the deficit. For those that pay attention to such things, it will leave a mark. But I don’t know that the average American is going to notice or care.
The thing I think will have the largest impact is going to be where much of the money in the BBB is directed. Trump wants to deport as many undocumented workers as he can, and with this bill ICE is suddenly going to find itself with a massive inflow of cash. The budgets for everything from prisons to detainee transportation went up 10 times or more. If you couple this with the tactics that ICE has been using the past 5 months, it starts to look like a recipe for disaster. Even prior to this bill, we’ve been seeing that many undocumented workers are either self-deporting, or lying low. This directly affects agricultural production, meat processing, and the construction industry, just to name a few areas. What it will mean for the future is hard to guess, but nothing good. I predict we will see an increase in the price of food, and home repair. Because every undocumented worker is already plugged into our economy, having them leave or working less is also going to depress the economy for everyone. I predict we will see either slow or sluggish growth for the next 2-3 years. If Trump carries through with his planned deportation of 3000 immigrants a day (and he will have the manpower from this bill) we will fall into a recession.
That’s just the financial effects. What that will do for us as a country is a whole other thing. There’s another implication to ICE and its huge budget that is lost on many. The way Trump has been using ICE it is as much his own private police force as it is a national one. It is very possible that citizens will start to get taken off the streets for reasons other than being undocumented. I would not be surprised if the number of political prisoners we’re seeing (which are right now mostly pro-Palestinian protesters) were to substantially increase. Regular citizens could be rounded up by unmarked agents and sent out of state or out of the country with no trial or notification. I know this sounds totally crazy pants, but I predict this is exactly what is going to happen. We’re going to slowly become more and more a police state with any opposition becoming political prisoners, while Congress looks on and does nothing, with little in the way of legal protections.
That is the thing I fear the most, and yet seems the most likely. Hopefully, I will be wrong, but I very much doubt it. Time will tell.
One last point. Our standing in the world is not so great right now. As I type this millions of people around the world will likely die thanks to Trump stopping the USAID program. How this administration treats other countries is also noticed. Our treatment of Ukraine is especially troublesome. Other countries are going to look at Trump’s actions and realize that if this is how American treats its allies, then maybe they need to not engage with us. This had implications well above the business level, and none of them are good. We’ll have to see how it all plays out.
Finances
On Thursday, July 3, the Social Security Administration sent us an email. I assume it was sent to everyone who is registered with SS or about to retire. This is highly unusual. I don’t know that the agency has ever used its resources and private information in such a way before. It is blatant advertising, and also misleading.
This is what it looked like. This link takes you to a similar page on the SSA site.
I started digging around and found some sources that were a lot more accurate.
GovFacts.org This is long, but in-depth, also covered similar bills.
AARP This is shorter and a little broader in scope.
The TL/DR is the new bill doesn’t cut taxes, it instead offers a larger “bonus” deduction of $6k per individual. This deduction is available to everyone who is 65 and over, and makes less than $200k/year ($175k/year for those filling single). It is also only going to last until 2029. After that it will be gone.
What this means is complicated, because our tax system is complicated. If you’re living on SS and make enough money to file taxes, then unless you are rich this will be an absolute benefit. If you don’t make enough money to file taxes, this will not help you at all. So it’s a very precise and targeted relief but only for the middle class retired or soon to be retied set, and only for a limited time. Which is not really what the email suggests.
Since I am 62, I will get only this benefit only in the last year it is offered. Because my wife is slightly older, Teri will get the benefit more than me. We file jointly, so technically we will both benefit from this at some point.
Is this good for us? Yes, without question. It might carve as much as $3k off of our tax bill, depending on a lot of factors. My income is not set because I am self-employed, and because my clients pay me in a variety of ways (some pay W-2 income and some pay 1099 income), so it makes if very hard to guess how much it will effect us.
What will affect us, without question, is the cuts to the advanced tax credits for the ACA, which is how we are insured. I haven’t looked at the numbers recently, but I would not be surprised if the monthly premiums on our already rock bottom insurance (bronze level) will double. We’re looking at something like an additional $400-$600/month. Yikes. Mind you, before the ACA on the open market we paid even more than that, so we’re not exactly surprised. Just sad.
The irony is, once we turn 65 we’ll be eligible for Medicaid, so we will no longer be on the ACA. So right at the time that our medical insurance will stop (not entirely, because you still have monthly premiums for medicaid) we’ll get an additional tax break. The net effect is we are going to loose money up until we each turn 65, and then we will loose less money. And that doesn’t count how the economy as a whole will affect us. Who knows what that will be.
As far as I know, these are the only two areas that will directly affect our finances. Time will tell. But in the main it looks like a net loss of something like $6k/year, dropping down to maybe $3k/year in four years.
Joy.