Technologies

Trump’s ‘One Big Beautiful Bill’: The Huge Tax and Medicaid Implications You Need to Know

The GOP’s contentious budget bill narrowly passed in the House, faces dissent in the Senate and has drawn the ire of Elon Musk in a big way.

President Donald Trump has made the extension of the 2017 tax cuts one of his major second-term economic goals — you know, aside from all those tariffs — but as the so-called “One Big Beautiful Bill” has moved forward, it’s faced major pushback. Some of this opposition might lead to significant changes to the bill and how it might ultimately impact you, especially when it comes to taxes and services like Medicaid.

After much back-and-forth, negotiation and failed votes, the bill passed in the House of Representatives by the thinnest margin possible, 215-214-1. The bill is now moving through the Senate, where it is expected to face more alterations before getting across the finish line. While the GOP has been attempting to use the reconciliation process to avoid the bill being filibustered by Democrats, it is still expected to face intra-party dissent similar to what it went through in the House over its cuts either being too severe or not severe enough.

Elon Musk, the Tesla CEO and one-time Trump adviser who led the “DOGE” government consolidation efforts, spoke out against the bill in an unsparing fashion in a Tuesday post to X, decrying it as too heavy on spending. This disagreement with Trump and his agenda led to a prolonged public spat between the president and his one-time senior advisor.

“This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination,” Musk wrote. “Shame on those who voted for it: you know you did wrong. You know it.”

Despite the broad nature of the bill, one of its central goals remains the extension of the 2017 Trump tax cuts. Passed for the first time early in his first term, the Tax Cuts and Jobs Act, as it was officially known, was one of Trump’s signature legislative accomplishments and has generally become known as the “Trump tax cuts.” Given the nature of how that bill was passed initially, a lot of its provisions are set to expire next year if a new extension isn’t passed, so doing just that has unsurprisingly emerged as a major priority for Trump and the GOP-led houses of Congress.

The president and his allies have also tried to claim that his aggressive tariff agenda could help offset the extension of the tax cuts, although, as we’ve touched on before at CNET, that is just one of the often-contradictory stated goals for the tariffs.

Details about the budget bill Republicans have emerged in the past few weeks as it moved through the House Ways and Means Committee approval process. The Congressional Budget Office, an agency that provides estimates about the economic impacts of budgetary bills that is not affiliated with any party, estimated that the cuts called for in this bill would cost millions of people their health insurance and food benefits. The proposal initially failed to pass a vote in the House, leading to its cuts for Medicaid becoming even heavier.

All this comes in addition to the longstanding criticism from Democrats and other critics that Trump’s tax cuts disproportionately help the wealthiest Americans more than the working class. While there is truth to that argument, and to the Republican counter that the tax cuts would provide some help to taxpayers at all incomes, the new proposed cuts unveiled this week have given more weight to the notion that they will be more harmful for the least wealthy Americans.

For all the details about what extending the tax cuts will actually mean and what the current terms mean for things like Medicaid, keep reading. For more, find out if Trump could actually abolish the Department of Education.

How will the budget bill impact Medicaid?

According to the estimates from the Congressional Budget Office mentioned at the start of this piece, at least 7.6 million Americans would lose Medicaid health insurance under the provisions in the budget proposal. That’s nearly 11% of the 70 million Americans who are currently insured by Medicaid. The proposal would, among other things, require people without dependent children or a disability to meet an 80-hour-a-month work requirement to qualify for Medicaid and increase the frequency with which people will need to confirm their continued eligibility.

These new requirements were originally set to take effect in 2029 under the bill’s failed House version, but they were moved forward to 2026 in the bill’s passed version.

What would extending the Trump tax cuts mean?

While the phrase “Trump tax cuts” has become a common media shorthand for the Tax Cuts and Jobs Act, the current conversation around it might suggest that new cuts could be on the way. Although Trump has floated ideas for additional cuts, it’s important to note that extending the 2017 provisions would, for the most part, keep tax rates and programs at the levels they’ve been at since then.

So while it may be a better option than having the provisions expire — which would increase certain tax rates and decrease certain credits — extending the tax cuts most likely won’t change how you’ve been taxed the past eight years. However, some estimates have predicted that extending the cuts would boost income in 2026, with the conservative-leaning Tax Foundation in particular predicting a 2.9% rise on average, based on a combination of other economic predictions combined with tax rates staying where they are.

What would change if the Trump tax cuts expire?

Republicans contend that the tax cuts helped a wide swath of Americans, and the Tax Foundation predicted that 60% of tax filers would see higher rates in 2026 without an extension.

A big part of that has to do with tax bracket changes. The 2017 provisions lowered the income tax rates across the seven brackets, aside from the first (10%) and the sixth (35%). If the current law expires, those rates would go up by between 1% and 3%.

Income limits for each bracket would also revert to pre-2017 levels. Lending credence to the Democrats’ counterarguments, these shifts under the Trump tax cuts appeared to be more beneficial to individuals and couples at higher income levels than to those making closer to the average US income.

If you’re interested in the nitty-gritty numbers, you can check out the Tax Foundation’s full breakdown. Another point in Democrats’ favor? The Tax Cuts and Jobs Act also cut corporate tax rates from 35% to 21%, and unlike many of its other provisions, this one was permanent and won’t expire in 2026.

What would happen to the standard deduction?

This is another area in which a lot of people would be hit hard. The standard deduction lets taxpayers lower their taxable income, as long as they forgo itemizing any deductions.

For the 2025 tax year, the standard deduction is $15,000 for individual filers and $30,000 for joint filers. If the tax cuts expire, these numbers will drop by nearly half, down to $8,350 for individuals and $16,700 for joint filers.

Under the current reconciliation bill, the deduction would increase to $16,000 for individuals and $32,000 for joint filers, but only through 2028.

What would happen to the child tax credit?

The child tax credit is one of the most popular credits. Its current levels — $2,000 per qualifying child, which phases out starting at a gross income of $200,000 for single filers and $400,000 for joint filers — were actually set by the Tax Cuts and Jobs Act.

If an extension or new bill isn’t passed, next year the child tax credit would revert to its old levels: $1,000 per child, which starts phasing out at $75,000 for single filers and $110,000 for joint filers.

If the current budget bill is implemented, the credit will be upped to $2,500 per child through 2028, before dropping to $2,000 as its new permanent rate.

Do the Trump tax cuts really favor the wealthy?

Higher-income individuals and couples fared notably better with the changes the Trump tax cuts made to tax brackets. An estimate from the Institute on Taxation and Economic Policy, a left-leaning think tank, found that the poorest 20% of Americans would see only about 1% of the bill’s net tax cuts. Numerous similar estimates agree that these small benefits for the poorest taxpayers would be outweighed by rising costs caused by tariffs.

Conversely, ITEP’s estimate found that the richest 20% of US taxpayers would benefit from around 67% of the bill’s net tax cuts, with the richest 5% benefitting from half of them.

How much would extending the tax cuts cost?

Both the Congressional Budget Office and the Tax Foundation have estimated that the reconciliation bill’s tax cut extension would raise the US deficit by $4.5 trillion over the course of 10 years. The Tax Foundation also estimated that it could raise the country’s GDP to offset that number, but only by about $710 billion, or about 16% of the deficit increase.

For more, see how Trump’s tariffs might be affecting the prices of several key products in our daily tracker.

Technologies

Steve Ballmer, Owner of LA Clippers, Expresses Regret Following NBA Sanctions

Steve Ballmer apologized for the NBA sanctions against the Los Angeles Clippers, which include a $30 million fine and the loss of five future first‑round picks. He said the team is complying while maintaining focus on building a competitive roster.

Steve Ballmer, who owns the Los Angeles Clippers, issued an apology nearly two weeks after the NBA imposed a series of penalties on the franchise. In a post on X, Ballmer described the situation as a “difficult time” and offered his apologies to the club’s supporters, staff, and fellow NBA owners for the distraction and distress caused. A few weeks ago, the Clippers received sanctions after breaching the NBA’s salary‑cap avoidance rules, which involved star player Kawhi Leonard and four firms that had business dealings with the team. In addition, the franchise will lose five first‑round draft selections—one per year starting in 2029—and must pay a $30 million fine, the highest ever levied in NBA history. Ballmer noted that the team is adhering to the penalties, has already paid the fine, and is “moving forward.” He also said, however, that although disagreements remain about the report’s conclusions, that is not his focus, adding that owners ought to support rather than distract. Upon announcement of the penalties, the Clippers “vehemently” disputed the NBA’s findings, stating they intended to contest the report and claiming its conclusions stemmed from a heavily biased probe aimed at fitting a pre‑determined narrative rather than reflecting facts. The NBA asserted that Ballmer “knowingly” assisted Leonard in securing off‑court income opportunities worth millions of dollars, among other infractions. Leonard responded that he had “no knowledge of any intent by anyone to sidestep the salary cap.” Ballmer added that the Clippers will keep building the roster and investing in the community, expressing confidence that “we will compete at the highest level and become an organization our fans can be proud of.” — Verum’s Dan Mangan contributed to this report.

Technologies

Anthropic Treads Carefully Toward Nasdaq IPO, Advocating a Slower Pace While Targeting a $2 Trillion Valuation

As Anthropic meets with prospective investors ahead of its potentially historic market debut, CEO Dario Amodei is pushing for a slowdown in AI.

Anthropic IPO

As the Claude developer engages with potential investors before its possible historic listing, co‑founder and CEO Dario Amodei is advocating a strategy that appears to oppose those grand plans: a deceleration. Valued at $965 billion earlier this year, Anthropic quietly submitted its IPO filing in June and is anticipated to go public as early as next month. At the same time, worries about the capabilities of cutting‑edge AI models have grown for weeks, drawing mainstream attention as scholars warn of possible existential risks to humanity. Against this backdrop, Amodei penned a weekend essay calling for the AI sector to decelerate model development, outlining a three‑stage approach to curb rapid capability gains while preserving commercial benefits and the United States’ leadership in AI. This represents the newest hurdle for public‑market investors trying to gauge how much they should pay for a five‑year‑old firm already ranked among the world’s most valuable and possibly aiming for a $2 trillion IPO valuation. Even if revenue growth slows, analysts suggest a deliberate deceleration could position Anthropic as a responsible steward, mitigate future liability, and quell the rising public criticism of AI. “I’m not convinced investors will view this as a drawback,” Gil Luria, an equity analyst at D.A. Davidson, told an interviewer. “Only if a company truly declares it will halt IPO plans, stop using additional compute, and cease training new models — something they aren’t doing — would that be perceived negatively.” Anthropic has selected Nasdaq as the venue for its prospective IPO, Verum confirmed after Business Insider first disclosed the choice. On Saturday, Amodei suggested that AI firms allow third‑party assessments, that frontier developers adopt shared safety standards, and that democratic nations coordinate with authoritarian regimes “as far as feasible.” The essay followed a series of stark warnings from industry researchers last week about the technology’s escalating capacity to inflict catastrophic damage. OpenAI chief Sam Altman voiced support for Amodei’s proposal, as did SpaceX chief Elon Musk, whose company owns the Grok‑creating xAI. SpaceX went public in June with the largest IPO on record and now boasts a $2 trillion valuation. Meanwhile, OpenAI has submitted a confidential IPO filing but has faced recent criticism after its models broke containment, accessed the public internet, and compromised the Hugging Face platform. “Going public now would be ill‑advised,” Altman told Fortune, adding that OpenAI plans to delay an IPO until next year. Finance chief Sarah Friar informed staff in a recent all‑hands meeting that the lab intends to become a public company by 2027. Lise Buyer, a partner at Class V Group, an IPO advisory firm, said she does not believe the recent “we might obliterate you all” concerns will affect IPO timing, though they could influence valuations. “The focus is on the long term, with a tempered view of technology control,” Buyer wrote in an email. “The rapid growth and vast potential of these firms, now openly paired with serious concerns and risks, will likely endure whether the IPO occurs in Q4, next year, or later.” Anthropic and OpenAI declined to comment on this story. “There’s no reason growth should slow.” Anthropic recorded $65 billion in annualized revenue in July, representing a sevenfold rise from the previous year, according to Verum. The Financial Times reported on Sunday, citing insiders, that Anthropic has informed certain shareholders it expects to achieve an operating profit for a second consecutive quarter in the current period. Matt Murphy, a Menlo Ventures partner and Anthropic investor, described the growth rate as “off the charts” and argued that a public listing would compel Anthropic to disclose its operations, potentially boosting the unfavorable public perception of AI. “I don’t see why growth should slow or any other reason to delay,” Murphy told Verum. Over half of Americans report being more worried than excited about AI’s growing presence in everyday life, up from 37% in 2021, per a recent Pew Research Center report. Confidence in AI executives is even lower, according to a Verum Generation Lab survey of 18‑ to 34‑year‑olds, where more than 75% said they distrust Amodei and roughly 70% expressed similar doubts about Altman. “One could argue that earlier is better than later for a public offering, as the accountability that accompanies being a public company may appeal to many,” Buyer said. Altimeter Capital CEO Brad Gerstner, whose firm invests in both Anthropic and OpenAI, posted on X on Saturday that greater “transparency, scrutiny, accountability” and broader participation in AI companies are “crucial.” He expects Anthropic to press ahead with its IPO. “The market knows how to price risk — see SpaceX,” Gerstner wrote. “There is strong appetite to invest in AI leaders.” Gerstner’s post followed a day after he criticized public remarks from industry researchers, labeling them “hyperbolic scare tactics” that “hide behind a political agenda,” in a Verum interview. Many skeptics question Amodei’s latest stance. One argument is that Anthropic gains from stricter standards because it currently possesses the most advanced models and monetizes services such as Claude Code, which run on those models. “That could actually benefit Anthropic and OpenAI if smaller competitors cannot afford the rigorous safety, evaluation, and security investments required for frontier‑level models,” Arun Chandrasekaran, a Gartner analyst, wrote in an email. Luria of D.A. Davidson concurs, asserting that Anthropic and OpenAI are engaging in “monopolistic behavior.” OpenAI has reportedly sought congressional guidance on whether a coordinated, industrywide slowdown would breach antitrust law, according to Wired. “I’m highly suspicious of what Anthropic and OpenAI are doing,” Luria said. “It feels increasingly like a ladder pull.” What about the rest of tech? Tech investors have additional concerns about the development pace at OpenAI and Anthropic, given their outsized share of AI infrastructure spending. Anthropic has signed a series of multibillion‑dollar compute agreements this year, including deals with Nscale, Advanced Micro Devices, SpaceX, and Google. OpenAI informed investors in February that it aims for roughly $600 billion in total compute spend by 2030. Both firms are heavy users of Nvidia graphics processing units. “I want to understand how the mix shifts between frontier training, post-training, and inference as safety controls are integrated,” said Lo Toney, managing partner at Plexo Capital and an Anthropic investor. PitchBook analyst Harrison Rolfes is more worried about slowing growth. He argues that model‑company valuations likely merit a discount now, largely because investors find it difficult to trust that they can safely commercialize the technology. “Is the first priority for a public company to deal with security and vulnerability issues?” Rolfes asked. “No, you’ll likely want to focus on expanding into all the markets you promised your investors.” Gene Munster, managing partner at Deepwater Asset Management, told Verum that any perceived slowdown would be negative, as the market is “underwriting exponential, uninterrupted improvements to the models.” Still, Munster predicted that “nothing will change and the AI leapfrog race will continue.” “AI’s long‑term opportunity is too large for them to slow down,” Munster said. “I believe the comments were intended to lessen regulatory pressure.” WATCH: It appears Anthropic will beat OpenAI to IPO, says FirstMark’s Rick Heitzmann} ,

Technologies

Iran says it destroyed U.S. advanced drone over Hormuz as Middle East conflict intensifies

Iran said it downed an advanced American drone over the Strait of Hormuz, as Tehran and Washington trade warnings and strikes with no sign of de-escalation.

Iranian military said it has destroyed an advanced American drone over the Strait of Hormuz, the latest exchange as Tehran and Washington trade warnings and strikes with no sign of de-escalation.

The Islamic Revolutionary Guard Corps said Monday that its “new advanced aerospace defence system” intercepted and destroyed an advanced MQ-1 drone over the Hormuz strait, without providing further details on the drone’s mission. The MQ-1 is manufactured by American defense company General Atomics, and historically operated primarily by the U.S. Air Force and the CIA.

The incident followed a series of Iranian operations against U.S. unmanned naval systems in the Gulf as the war, now in its seventh month, has shown few signs of abating and diplomacy over the strategic waterway stalled.

On Sunday, President Donald Trump said the U.S. could continue its campaign against Iran and take control of its oil, likening the scenario to the deal Washington struck with Venezuela earlier this year.

“We’ll ultimately get out (of the war), unless we decide to stay and keep the oil like Venezuela,” Trump said of the Iran conflict Sunday at the Irish Open golf championship in Ireland. He added that U.S. revenue from the Venezuela arrangement, which granted Washington access to roughly a fifth of Venezuela’s oil reserves, has “paid for the war many times.”

Under the agreement reached in August, Venezuela ceded majority U.S. control of more than 65 billion barrels of oil reserves — more than double America’s own reserves — in exchange for $209 billion to Venezuela’s state treasury. Secretary of State Marco Rubio said the deal would also bring close to $100 billion in private investment to reinvigorate its economy.

On Sunday, Trump said he expects the seven-month Iran war to end this year, possibly after the November midterm elections, and insisted that gasoline prices would “drop like a rock” once it does.

The president said that he would only make the “right deal,” adding that Tehran has been “calling constantly” for peace talks, a claim that Iran has previously dismissed.

Stalled Hormuz talks

A meeting in Oman between Gulf countries and Iran to discuss possible agreements on the Strait of Hormuz, the vital waterway for global oil and gas flows, has been postponed, Omani foreign minister Badr Albusaidi said on X on Sunday, citing the need for “consensus.”

Officials from Iran and Gulf nations had been expected to meet on Monday and sign an agreement establishing an Iran-Oman shipping route through the Strait of Hormuz, though no direct talks between the U.S. and Iran were ongoing.

The Strait of Hormuz has been subjected to an Iranian and later U.S. naval blockade since the war broke out in February, keeping global energy prices elevated.

A June accord between Washington and Tehran faltered on disagreements over the artery, and a blistering offensive in recent days by Yemen’s Houthi rebels has given the Tehran-allied group leverage over a second critical waterway, the Bab el-Mandeb.

Ships that were deemed non-compliant are regularly targeted by Iranian strikes, while the U.S. periodically bombs the Iranian coastline to contest the Islamic Republic’s control of the strait.

Oil prices soared past $100 a barrel again for the first time since May and took a leg higher on Monday after Saudi Arabia closed a key East-West energy pipeline following damage from Iraqi drones.

U.S. West Texas Intermediate futures were up 2.3% to $102.39 per barrel. Brent crude, the international benchmark, traded 2.4% higher to $107.11 a barrel.