The One Big Beautiful Bill & Negative Economic Consequences For Latinos

Examining the recently passed H.R. 1, OBBA, or what is referred to as the One Big Beautiful Bill, paints a grim picture for many Latinos. The proposed cuts to healthcare, educational assistance, food assistance, housing programs, and other social safety net initiatives will hurt tens of millions of families, especially those on the economic edge. The impact on the demographic group driving growth in population, consumer spending, and higher education enrollment in this country would be nothing short of devastating.

Some Impacts Of The One Big Beautiful Bill On Latinos

According to the Congressional Budget Office, initial estimates place the cost of cuts to Medicaid and the food subsidy program, SNAP, at nearly $1 trillion. At the same time, economic support for immigrant enforcement is expected to increase.

The U.S. Department of Homeland Security estimates that about 13% of Latinos are undocumented, and of the total undocumented population, approximately 80% are Latino. Because about 91% of undocumented Latinos are of working age and have a labor force participation rate of 78%, any increase in deportation activities affecting the Latino community is likely to impact employed individuals. The economic repercussions for their families could be catastrophic.

One Latino construction worker, who declined to give his name to protect his privacy, is a married U.S. citizen and the father of two children, said, “My wife is undocumented, but my kids and me are Americans. She and I both work. If she is deported, I can’t afford to keep our house, pay the bills, or send my kids to college. They are smart and need to go to college. And because they will cut money for food stamps, I do not know how I will feed my family. Why are they doing this to us? We work and don’t bother anybody. We are good neighbors, we go to church, and spend a lot of time with family. How is this hurting anybody?”

Some Potential Changes To Tax Liability In The One Big Beautiful Bill And Their Impact On Latinos

One significant economic impact is how the One Big Beautiful Bill alters tax benefits and liabilities. For example, under the proposed bill, the Child Tax Credit – a tax advantage that the National Academies of Science, Engineering, and Medicine point to as a model for structuring policies that would be the most effective mechanism for reducing child poverty – will no longer be available to all who currently qualify for it. The legislations will penalize families that have at least one parent who lacks a Social Security number, even if that parent is lawfully in the U.S. According to the non-partisan Center on Budget and Policy Priorities, this will result in the families of 4.5 million children, who are either citizens or permanent residents, losing the economic benefits of the Child Tax Credit. A large portion of those children are Latino.

However, even without the penalty for having a parent without a Social Security number, Latinos are less likely to benefit from this tax advantage than whites. The independent Tax Policy Center estimates that the expanded child tax credit proposed in the bill will economically assist some families. However, this benefit is more likely to favor middle—and higher-income households. The child tax credit is an essential tool for reducing poverty, and with poverty reduction comes increased opportunities for wealth accumulation. Data from the latest U.S. Census Bureau American Community Survey indicates that whites are economically positioned to be approximately 71% more likely to receive the anticipated tax benefit than Latinos, thereby decreasing their chances for wealth accumulation and closing the wealth gap.

Latinos, Healthcare, And The One Big Beautiful Bill

Lacking health insurance coverage means people either forgo care or pay out of pocket, often resulting in substantial medical debt. This jeopardizes both economic and physical well-being. According to the U.S. Census Bureau, approximately 18% of Latinos are uninsured. This figure is 44% higher than the uninsured rate for Blacks and 61% higher than that for whites.

Despite having the highest labor force participation rate, according to the Kaiser Family Foundation, Latinos aged 19 to 64 are 7% less likely than Blacks, 29% less likely than whites, and 29% less likely than Asians to have employer-sponsored or other private insurance. The KFF points out that Latinos 64 and under account for 30% of Medicaid beneficiaries, and nearly 67% of Latino adults on Medicaid are employed.

Preliminary estimates from the U.S. Congressional Budget Office indicate that approximately 7.6 million Americans will likely lose their insurance because of the legislation’s Medicaid provisions.

Even though undocumented immigrants are not eligible for Medicaid and, therefore, the proposed changes will not directly affect them, several states offer Medicaid-like programs for them. These programs are state-funded and not federally subsidized. Nevertheless, the One Big Beautiful Bill penalizes states that provide health insurance coverage to undocumented immigrants. As a result, some or all of these states are likely to eliminate those programs rather than face severe economic penalties.

Overall, the One Big Beautiful Bill is crafted in a manner that could result in many Latinos losing their health insurance coverage. For a significant number of these individuals, affordable or accessible health insurance options will be lacking, which will further raise the number and percentage of uninsured Latinos.

Higher Education, Latinos, And The One Big Beautiful Bill

Nearly 75% of Latinos enrolled in higher education receive financial aid, and proposed changes to financial assistance are expected to have a cascading effect on these students’ ability to enroll in college, much less receive a degree.

One proposed change likely to hinder Latino college students’ ability to complete their education is the increase in the annual number of courses or credit hours a student must take to qualify for a Pell Grant. About 50% of Latinos receive such a grant, and around 56% of Latino college students work at least 30 hours a week. Raising the number of classes or credit hours is likely to place an overwhelming burden on Latino students. “These changes are setting most of my Latino students up for failure. They are good students, but because they need to work so many hours while in college, they are likely to give up and drop out. We will all be worse off because of that,” said a high school teacher, who declined to give their name to protect the privacy of their students.

The Latino Wealth Gap And The One Big Beautiful Bill

Many proposed changes in the One Big Beautiful Bill present challenges for Latinos seeking higher education, accessing essential health care, and building wealth. The potential loss of financial aid, coupled with a rising uninsured rate, is likely to lead to an increased number of Latinos encountering medical debt and a larger proportion lacking the educational and training credentials required for many jobs in the 21^st-century economy.

Latinos have begun to see a narrowing of the wealth gap. Still, for this trend to continue, they need access to affordable healthcare, food, and other basic necessities for daily living, in addition to financial aid to further their education. Threats to the programs that support many lower-income wage earners and their families jeopardize opportunities to close the wealth gap, which endangers the overall economic growth and stability of the U.S.

The One Big Beautiful Bill, Latinos, And Moving Forward

The significance of Latinos to the socioeconomic growth and stability of the U.S. underscores the urgent need for public policies, including the One Big Beautiful Bill, to support rather than hinder their ongoing educational and economic progress and contributions.

Reducing the deficit, ensuring the efficient and effective use of resources allocated to public social safety net programs, and moving to ensure that only those who need and are eligible for government assistance receive benefits are commendable goals. However, elected officials must also ensure that the overall U.S. economy remains strong and stable, allowing individuals and their families to experience its full benefits. Many families need some assistance to achieve financial stability, and elected officials are responsible for guaranteeing that public policies, such as the One Big Beautiful Bill, align with the needs of those requiring socioeconomic support.