House Passes Massive Tax Cut Bill: What It Means for Your Wallet

THIS MORNING, THE HOUSE OF REPRESENTATIVES PASSED THE REPUBLICAN-LED ONE BIG BEAUTIFUL BILL ACT (H.R. 1) BY A VOTE OF 215–214–1. THIS IS A MAJOR STEP FORWARD IN THE BUDGET RECONCILIATION PROCESS, WHICH ALLOWS THE REPUBLICAN-LED CONGRESS TO FAST-TRACK SWEEPING BUDGET CUTS TO REDUCE FEDERAL PROGRAMS AND SPENDING. BUT WHAT DOES THIS MEAN FOR YOUR WALLET?

First, let’s break down the key points of this bill:

- $4.5 TRILLION IN TAX CUTS FOR THE ULTRA-WEALTHY: This bill is officially named the One Big Beautiful Bill Act or H.R. 1, but there is nothing beautiful about it. This bill pays for these massive tax breaks through cuts to vital government programs, including the Federal Employees Retirement System (FERS), which covers postal and federal employees. H.R. 1 would eliminate the FERS annuity supplement for certain employees, which would begin to apply on January 1, 2028. The FERS annuity supplement is an earned benefit that makes it financially possible for postal workers to retire before age 62, which is when Social Security benefits begin. Essentially, this supplement is a monthly payment that helps bridge the gap between an employee’s retirement and Social Security eligibility. For example, a postal employee age 57 who has met their years of service requirement and is eligible can retire knowing they will receive a monthly payment until their Social Security benefits begin at age 62. If the FERS annuity supplement is eliminated, many postal workers aged 57 to 62 who are eligible to retire will have a choice — take less in retirement without this supplement or continue working years longer until they can collect Social Security.

- CUTS TO VITAL GOVERNMENT PROGRAMS: The bill pays for these massive tax breaks through cuts to vital government programs, including the Federal Employees Retirement System (FERS), which covers postal and federal employees. H.R. 1 would eliminate the FERS annuity supplement for certain employees, which would begin to apply on January 1, 2028. The FERS annuity supplement is an earned benefit that makes it financially possible for postal workers to retire before age 62, which is when Social Security benefits begin. Essentially, this supplement is a monthly payment that helps bridge the gap between an employee’s retirement and Social Security eligibility. For example, a postal employee age 57 who has met their years of service requirement and is eligible can retire knowing they will receive a monthly payment until their Social Security benefits begin at age 62. If the FERS annuity supplement is eliminated, many postal workers aged 57 to 62 who are eligible to retire will have a choice — take less in retirement without this supplement or continue working years longer until they can collect Social Security.

- INCREASED MILITARY SPENDING: The bill proposes increased spending for the military, border wall construction, immigration enforcement, and detention facilities, offsetting about half of the domestic cuts. This shift in spending priorities could lead to a more militarized society and increased border security, but at the cost of reduced funding for other essential public services.

- CUTS TO SOCIAL SAFETY NET PROGRAMS: The bill includes deep cuts to SNAP and Medicaid, achieved through both reduced funding and stricter eligibility requirements. These cuts could have a significant impact on low-income Americans who rely on these programs for basic needs, potentially leading to increased poverty and hardship.

- INCREASED NATIONAL DEBT AND DEFICIT: The bill is expected to increase the national debt by $4 trillion and the federal deficit by $230 billion annually. This financial strain could limit the government's ability to invest in public infrastructure, education, and other critical areas, potentially slowing economic growth in the long term.

- DISPROPORTIONATE BENEFITS: According to a Congressional Budget Office (CBO) analysis, the bill will reduce "household resources"—including wages and federal benefits—by roughly 4% for the lowest-income households, while increasing them by a similar margin for the highest-income groups. This disparity could exacerbate income inequality, as the wealthiest Americans benefit disproportionately from the tax cuts.

- POTENTIAL FOR ECONOMIC GROWTH: Proponents of the tax cuts argue that reducing the tax burden on corporations and high-income individuals could stimulate economic growth by encouraging investment and job creation. However, the bill's impact on economic growth remains uncertain, as historical data on similar tax cuts have shown mixed results.

- LONG-TERM EFFECTS: The long-term effects of these tax cuts could include increased economic inequality, reduced public investment, and social unrest. These changes could have a profound impact on the broader economy and public services, potentially leading to a more polarized and less equitable society.



SO, WHAT DOES THIS MEAN FOR YOUR WALLET?

- IF YOU’RE A POSTAL EMPLOYEE: The elimination of the FERS annuity supplement could force many postal workers aged 57 to 62 to either take less in retirement or continue working years longer until they can collect Social Security. To mitigate this impact, postal employees could consider several alternative retirement benefits or financial planning strategies, such as delaying retirement, increasing savings, exploring other benefits, working part-time after retirement, continuing health benefits, continuing life insurance, and reemployment.

- IF YOU’RE A LOW-INCOME AMERICAN: The cuts to social safety net programs and the elimination of benefits like the FERS annuity supplement could lead to social unrest, as many Americans struggle to make ends meet. This could have political and social implications, as discontent with the government's policies grows.

- IF YOU’RE A HIGH-INCOME AMERICAN OR CORPORATION: The tax cuts could stimulate economic growth in the short term, but the long-term effects could include increased national debt, reduced public services, and increased economic inequality. These changes could have a profound impact on the broader economy and public services, potentially leading to a more polarized and less equitable society.

- IF YOU’RE A TAXPAYER: The increased national debt and deficit could limit the government's ability to invest in public infrastructure, education, and other critical areas. This could slow economic growth in the long term and reduce the quality of life for many Americans.

SO, WHAT SHOULD YOU DO?

- IF YOU’RE A POSTAL EMPLOYEE: Contact your senators and urge them to protect the FERS annuity supplement. Call the Legislative Hotline at 844-402-1001 and make your voice heard!

- IF YOU’RE A LOW-INCOME AMERICAN: Stay informed about the cuts to social safety net programs and advocate for your rights. Contact your representatives and let them know how these cuts will impact your life.

- IF YOU’RE A HIGH-INCOME AMERICAN OR CORPORATION: Consider the long-term effects of these tax cuts on the broader economy and public services. Advocate for policies that promote economic growth and reduce inequality.

- IF YOU’RE A TAXPAYER: Stay informed about the impact of these tax cuts on the national debt and deficit. Advocate for policies that promote fiscal responsibility and public investment.

THIS IS A CRUCIAL TIME FOR OUR ECONOMY AND SOCIETY. THE DECISIONS MADE BY OUR LAWMAKERS WILL HAVE LONG-TERM EFFECTS ON OUR WALLETS AND OUR FUTURE. SO, STAY INFORMED, MAKE YOUR VOICE HEARD, AND ADVOCATE FOR POLICIES THAT PROMOTE ECONOMIC GROWTH, REDUCE INEQUALITY, AND PROTECT OUR PUBLIC SERVICES.