Trump tax bill introduces major reforms to U.S. welfare programs

Published: July 30, 2025 – 2:00 PM EDT

A new tax and spending law signed during Donald Trump’s presidency is changing the way key U.S. welfare programs operate. The legislation, passed under a Republican-led Congress, introduces broad revisions to long-standing support systems like Medicaid and the Supplemental Nutrition Assistance Program (SNAP).

These changes, described by some experts as the most significant in decades, are designed to cut federal spending while encouraging greater state responsibility and work participation among aid recipients.

A major shift in federal aid policy

The law delivers an estimated $4.5 trillion in tax cuts while reducing federal spending by more than $1 trillion over the next ten years. Much of these cuts affect health and nutrition assistance programs, especially Medicaid and SNAP.

Key updates include:

• New work requirements for some aid recipients aged 18–64
• Increased cost-sharing with states
• Revised eligibility guidelines for certain benefits

Supporters of the law say the goal is to modernize government programs and improve cost efficiency. Critics argue the cuts could weaken support for millions of low-income individuals.

Impact on local governments and communities

The changes come at a time when most Americans continue to support funding for safety net programs. A survey by the AP–NORC Center for Public Affairs Research shows that many Americans believe programs like Medicaid and Social Security are essential, not excessive.

However, local and state officials are already analyzing how to respond to the shift. Some are considering options like raising taxes, adjusting local aid, or reducing spending in other areas.

“This will have real consequences for communities,” said Sharon Parrott, president of the Center on Budget and Policy Priorities. “It could lead to millions of people losing access to health coverage and food assistance.”

New requirements under the law

One of the most debated aspects of the law is the 80-hour monthly work requirement for some adults who receive benefits. This includes activities such as employment, job training, or community service. The requirement generally applies to individuals who are not disabled, do not have dependents, and fall within the 18–64 age range.

According to the Congressional Budget Office (CBO):

• 10 million fewer people are expected to be covered by Medicaid
• 3 million fewer people may receive SNAP benefits

Officials from national and local advocacy groups say the requirements may create additional challenges for vulnerable populations and overburden local systems.

Republican viewpoint: reforming, not removing

Supporters of the law argue that it seeks to prevent waste, reduce fraud, and focus assistance on the most vulnerable. They emphasize that safety net programs remain available to those truly in need, such as the elderly, disabled individuals, and single-parent households.

“These programs were never intended to cover everyone forever,” said House Speaker Mike Johnson during a recent podcast appearance. “We’re focusing resources where they’re needed most.”

A memo from Republican leadership also pointed to the public support for work requirements and legal status-based eligibility limits.

The evolution of Medicaid

Established in 1965 during President Lyndon B. Johnson’s administration, Medicaid has long provided health coverage for low-income families, seniors, pregnant women, and people with disabilities.

Under the Affordable Care Act (ACA) in 2010, the program expanded significantly, reaching approximately 80 million Americans. Though it has reduced the uninsured rate, Medicaid also represents a large portion of federal spending—estimated at over $880 billion annually.

Research from public policy experts, including economist Bruce D. Meyer, indicates Medicaid has improved health outcomes and saved lives. Meyer cautioned that reductions in coverage could reverse some of these gains, especially for at-risk populations.

SNAP program: fewer recipients expected

SNAP, originally introduced through legislation in the 1960s, currently provides food assistance to nearly 40 million people each month. The average benefit is around $200 per person.

The new law tightens eligibility criteria and adds new work-related conditions, which could reduce the number of recipients by millions.

Advocates for hunger relief warn that these changes may lead to higher food insecurity rates, especially among older adults, families with children, and rural populations.

Political and social reactions

The legislation has drawn mixed responses in Congress and beyond. While Republican leaders frame it as a necessary fiscal reform, Democrats have raised concerns about its human impact.

House Minority Leader Hakeem Jeffries criticized the cuts, stating they would “hurt seniors, children, and veterans.” He argued that the bill favors tax relief over basic needs.

With the 2026 midterm elections approaching, the debate around welfare reform is likely to intensify. In the meantime, states, counties, and service organizations are preparing to adjust to the law’s requirements and anticipate its long-term effects.

Final thoughts

This major federal policy shift represents a turning point in how the U.S. supports its most vulnerable citizens. While the law aims to control spending and promote work, its real-world effects will unfold over time—impacting healthcare access, food security, and the role of state and local governments.