Donald Trump signed the One Big Beautiful Bill Act into law in early July, which some reports call the “largest transfer of wealth from the poor to the rich since chattel slavery.”
The impact of the federal law could be especially harmful to Black households, but advocates are working to minimize the damage.
How does the bill impact Black communities?
The bill’s text calls some measures “relief” for the middle class, but policy experts warn that many of these benefits are temporary and could disproportionately benefit white families and those who are already wealthy.
“The overtime deduction, the tips income deduction, the car loan interest deduction and the deduction for seniors, those all end after 2028,” alerts Jessica Fulton, Senior Fellow at the Joint Center for Political and Economic Studies, a DC-based policy think tank. That timeframe raises concern among advocates who say the communities most in need — especially Black families — will see little lasting impact, while wealthier households gain permanent advantages.
Beyond the limited timeframe, policy experts note that the scope of some deductions is also limited. “It’s such a small portion of the full bill that it is actually negligible,” says Olugbenga Ajilore, PhD, the Chief Economist at the Center on Budget and Policy Priorities.
Ajilore also acknowledges how employers could find ways to skirt the benefits of overtime deductions. “What counts as [a] regular salary versus overtime? Are employers going to give people overtime?” Ajilore asks rhetorically. “Those things are basically gimmicks to try to sell this bill,” Ajilore adds.
The primary purpose of the Act, he maintains, is “extending tax cuts from the 2017 tax law [under Trump’s first administration], adding tax benefits to wealthy people and then partially paying for it with disproportionate cuts to Medicaid and food assistance that will disproportionately impact low-income households and disproportionately impact Black households.”
Fulton notes that while these tax breaks for the wealthy are permanent, “the [programs] that could provide people some relief are actually going to end when Donald Trump is out of office.”
While the president campaigned on ending inflation on “Day 1,” the Congressional bill he endorsed would entail an increased cost of living for many Americans, including Black families. “The bill actually increases costs on a lot of the programs that Black households need… at a moment when Black unemployment rates are increasing,” states Fulton.
In addition to the widely reported cuts to SNAP (also known as food stamps) and Medicaid, Fulton notes that the bill could also increase electricity costs, as it repeals clean energy tax credits and potentially raises some costs associated with higher education.
“That’s going to be through limiting access to particular kinds of federal student loans,” Fulton explains. “People are going to have to make a decision not to go to grad school, or they’re going to turn to the private sector, and we know that private sector banks have not historically treated Black communities fairly,” Fulton shares with ESSENCE.
Alexsis Rodgers, Political Director of the Black to the Future Action Fund, also advises that the bill harms households deemed “middle class” and potentially higher-income families as well.
“Regardless of what Republicans and Trump are saying, our communities all stand to suffer with these kinds of cuts. Even if I think, ‘Oh, I’m relatively well off, I’m middle class, or even upper class [I won’t be harmed],’ if my kids are now going to school with other kids who are sick, with other kids who don’t have health care, with other kids who don’t have housing security, my whole neighborhood, my home values, everything starts to shift around me,” she shares. “It’s quite manipulative that Republicans are trying to move this narrative that they’re here for middle-class Americans when really they’re taking out all of us.”
How can Black communities be empowered?
The GOP-backed budget bill threatens Black economic power, which has been tenuous in the US well before Trump’s presidency and the Republican takeover of Congress, with the racial wealth gap persisting for decades with no signs of slowing down. So, advocacy organizations have been working to mobilize and empower Black communities for longer-term economic solutions. This includes organizing regardless of who is in office.
“We don’t have to wait for the midterm elections,” states Rodgers. The Black to the Future Action Fund’s parent organization, the Black Futures Lab, has surveyed over 200,000 Black Americans to determine their policy priorities and develop a Black Economic Agenda, which the fund published ahead of the 2024 presidential election. According to the 2023 survey, the top concern was that wages were too low to support a family, and low wages were considered “the most important problem facing rural and urban Black communities.” The Fund is therefore advocating for an increase in the minimum wage to $17 and for workers to have better rights to organize, which are efforts that can be pursued through state governments.
“We can still be advancing and organizing towards this agenda right now, and that might look different than the federal government. It could look like organizing in your local community or at the state level of government,” Rodgers shares.
Fulton also pointed out potential opportunities for advocacy at the state level. The Act expands Pell grants for short-term training programs, which supports adults who can’t afford to leave the workplace to pursue a degree. The expansion, which states have to implement, helps make those programs more affordable, Fulton shares. However, they don’t connect workers to jobs. “Black communities need to be intentional about holding state leaders accountable so that the short-term training programs are accepting Black people, matriculating Black people through the programs, and also that these programs lead to good jobs,” Fulton states.
Rodgers also offers advice for Black workers—like Black women who are more likely to work multiple jobs than any other demographic— who may have limited capacity to organize.
“One thing is joining a political home like Black Futures Lab, the NAACP or Black Voters Matter. That’s a big step, [but] it takes a lot of time and commitment that a lot of people don’t have.” But, she notes, people can build community in smaller, more personal ways.
“Something that I think all of us can do, regardless of where you find yourself in life, is just sharing your story with other people in your community. I think about Sunday dinners with my family and friends,” Rodgers offers. “Leading up to this vote [on the reconciliation bill], we were sharing stories with each other about health care that we received through Medicaid, or how the tax cuts for the wealthy were going to impact us and our small businesses.”
The constant stream of news about the chaos of the economy can be both disturbing and alienating, but Rodgers points out that staying connected with others can be crucial during the present political climate.
“Just even knowing that you’re not alone, and knowing that, ‘hey, the experience that I’m having is something that my friend and my loved one is having,’ building that community, I think, is really the foundation of organizing, period.”
“If you don’t even know who’s around you and that you have similar experiences, it’s hard to build a campaign or a movement that will change other people’s minds,” Rodgers maintains. “But getting back to the foundation of building community locally is a major step that anybody can do.”