In the wake of President Trump’s much-touted "Big Beautiful Bill," a sweeping piece of legislation that promised bold reforms and tax cuts, states across the country are now grappling with a new reality: budget shortfalls, tough choices, and the looming threat of slashed services. The bill, which was initially celebrated by some for its aggressive approach to reducing government spending and cutting taxes, has begun to reveal its less-publicized consequences—particularly for everyday Americans who rely on public assistance programs like the Supplemental Nutrition Assistance Program (SNAP), Medicaid, and other critical services.
For years, many states enjoyed robust budgets, buoyed by a hot economy and a steady stream of federal support from Biden-era legislation. According to Axios, these good times allowed states to build up reserves and keep services running smoothly. But as the "Big Beautiful Bill" takes effect, the landscape is changing rapidly. The federal government is now pulling back funding for education, state health departments, and climate projects, leaving states to fill in the gaps—or not.
One of the most significant changes comes in the form of deep cuts to SNAP, commonly known as food stamps. As reported by The Onion, the bill will result in as many as 22 million families losing their food stamp benefits. The funds previously allocated to SNAP are being redirected to the wealthiest Americans, with the bill’s architects touting this as a smart move to stimulate economic activity at the top.
But for those who depend on SNAP, and even for some who never expected to be personally affected, the impact is immediate and profound. In a satirical yet pointed reflection published by The Onion, a self-described Republican laments, "How am I supposed to judge what poor people buy at the grocery store now? Did Trump even stop to consider how this move would affect people like me, who love nothing more than to click their tongues disapprovingly when the person in front of them uses food stamps to purchase a package of Fig Newtons?" The author’s tongue-in-cheek complaint highlights a real shift: with so many families losing access to food assistance, the social dynamics of shopping—and the underlying issues of poverty—are changing in unexpected ways.
States, meanwhile, are left to pick up the pieces. Axios notes that, unlike the federal government, states are required by law to balance their budgets. With the "Big Beautiful Bill" slashing federal contributions, states must either raise taxes or cut services to make ends meet. The options aren’t pretty: cuts to public education, healthcare, food assistance, and climate resilience projects are all on the table.
"All those underlying macro drivers are expected to slow the revenue growth for states, and to continue to put pressure on the cost side of the income statement, making it harder and more challenging for states to keep up," explained Jennifer Johnston, senior vice president and director of municipal bond research at Franklin Templeton, in an interview with Axios. "And we’re seeing that across the country."
The bill’s tax cuts present another wrinkle. Many states align their income tax structures with the federal government, so when federal taxes are cut, state revenues often fall as well. For example, Colorado is facing a $1.2 billion shortfall directly tied to these changes. New York, meanwhile, is bracing for a $3 billion loss in federal funds over the next fiscal year, according to the state’s budget director.
Perhaps most dramatically, the "Big Beautiful Bill" changes the way SNAP is funded. Where the federal government once covered the full cost of the program, states are now required to pick up a share—amounting to hundreds of millions of dollars a year in most cases. Wesley Tharpe, a senior advisor for state tax policy at the Center for Budget and Policy Priorities, told Axios, "States now have the option to just opt out of SNAP entirely." The same risk applies to Medicaid coverage, as federal support is scaled back. "You’re potentially going to see really broad-based cuts to healthcare, food assistance, housing, education," Tharpe warned.
The political response to these challenges varies widely. Some states, particularly those with Democratic leadership, are contemplating raising taxes on the wealthy to offset the loss in federal funds and prevent cuts to essential services. As reported by The Wall Street Journal and referenced by Axios, such measures could help mitigate the worst effects of the federal pullback, though they come with their own set of political and economic risks.
Despite the grim outlook, some experts believe the bill’s tax cuts may stimulate economic activity in the short term, potentially offsetting some of the revenue shortfall. "States are generally in good shape right now. The flush years have helped states build up reserves," Johnston from Franklin Templeton told Axios. "They are there for a rainy day, and this is likely to be the rainy day." Nonetheless, with reserves only going so far, the long-term sustainability of state budgets remains in question.
For individuals and families who rely on public assistance, the stakes couldn’t be higher. As the satirical piece in The Onion makes clear, the loss of SNAP benefits isn’t just a matter of dollars and cents—it’s a fundamental shift in how society treats its most vulnerable members. The author’s sardonic plea—"These SNAP cuts have left a hole in my heart that’s going to be difficult to fill, and I never thought I’d say this, but I’m hoping our next Commander in Chief is a Democrat so I can go back to haughtily sighing at the people I’ve deemed inferior to me"—captures the sense of dislocation and frustration felt by many, even those who once supported the bill’s architects.
The broader economic picture is equally complex. The job market is slumping, tariffs are expected to further curb revenue growth, and the end of federal support for key programs means that states must make tough decisions about what to fund and what to cut. As Axios points out, "Right now, states have tough decisions to make." Whether through raising taxes, cutting services, or some combination of both, the choices made in the coming months will have lasting consequences for millions of Americans.
Ultimately, the "Big Beautiful Bill" stands as a stark reminder of the trade-offs inherent in public policy. While some celebrate the promise of lower taxes and leaner government, others are left to navigate the fallout—both financial and personal—of a system in transition. As states move forward, the true measure of the bill’s impact will be found not in spreadsheets or political speeches, but in the day-to-day lives of the people it touches.
