House Republicans are currently debating President Donald Trump’s proposed budget plan, dubbed the “One Big Beautiful Bill,” which includes significant tax cuts and spending changes aimed at continuing economic growth. However, if the bill fails to pass, experts warn that the U.S. could face a severe recession and millions more Americans losing health insurance coverage.
The White House released a study estimating that between 8.2 million to 9.2 million additional Americans could become uninsured if the budget reconciliation bill does not pass. Currently, about 27 million Americans are uninsured, but without this legislation, that number could rise to roughly 36 million—nearing pre-Obamacare levels seen before 2010.
The bill itself is extensive, running over 1,100 pages, and proposes more than $5 trillion in tax cuts partially offset by spending reductions and tax code adjustments. It also fulfills many of Trump’s campaign promises, including a temporary suspension of taxes on overtime and tips for many workers, a new $10,000 tax break for auto loan interest on American-made cars, and a new tax-free “MAGA account” contributing $1,000 to children born during Trump’s second term.
Economic advisors have painted a grim picture if the bill fails. The White House projects that without the bill, the expiration of the 2017 Trump tax cuts in 2026 combined with other shocks could trigger a “moderate to severe recession.” This would result in a contraction of the U.S. GDP by approximately 4% over two years—on par with the 2008 financial crisis—and an increase in unemployment by four percentage points, potentially causing 6.5 million job losses.
According to Fox News, the White House memo explains that “60% of those job losses had employer-sponsored insurance, so approximately 3.9 million people would lose coverage and become uninsured.” Furthermore, the loss of individual and marketplace insurance coverage is expected as many who are uninsured will be unable to afford private insurance during the recession.
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According to Newsmax, the White House Council of Economic Advisers’ memo titled “Health Insurance Opportunity Cost if 2025 Proposed Budget Reconciliation Bill Does Not Pass” warns that failing to pass the bill would lead to this “major recession” scenario.
The memo assumes states that expanded Medicaid will be forced to pull back eligibility to meet balanced budget requirements during a severe recession, which would further increase uninsured numbers. It also highlights that vulnerable groups such as non-citizens, gig workers, and early retirees would disproportionately lose insurance coverage.
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The memo further outlines several tax-related consequences if the bill does not pass: marginal individual tax rates would rise, the child tax credit would be halved, and small businesses would lose important deductions. Distressed communities would also suffer due to decreased investment incentives. Conversely, the memo notes that extending the tax cuts would boost short-term real GDP by 3.3 to 3.8% and long-term GDP by 2.6 to 3.2%.
House Speaker Mike Johnson is pushing to pass the bill by a self-imposed Memorial Day deadline, despite divisions among Republicans, who control the House by a very slim margin.
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Disclaimer: This article is based on information provided by official reports and news sources. It aims to present the facts accurately without any added opinion or speculation. Readers are encouraged to consult multiple sources for a comprehensive understanding.
