A sweeping federal budget bill narrowly passed in the U.S. House this week, with major implications for New York. While the legislation raises the State and Local Tax (SALT) deduction cap, it also slashes billions in funding for programs like SNAP and Medicaid that millions of New Yorkers rely on.
What the bill includes
The “One Big Beautiful Bill Act” passed by just one vote—215 to 214. It expands the SALT deduction cap from $10,000 to $40,000 for households earning under $500,000. The cap would increase by 1% each year. Supporters, including several New York Republicans, say this will benefit middle-class families in high-tax regions.
However, the bill also cuts federal support for food assistance, health care, clean energy, and housing. According to Governor Kathy Hochul, the plan could cost New York over $13 billion per year.
SNAP cuts raise concerns about hunger
The bill reduces SNAP (Supplemental Nutrition Assistance Program) funding by more than $290 billion. In January 2025, nearly 3 million New Yorkers received SNAP benefits, totaling $655 million that month alone.
Advocates warn these cuts would shift significant costs to the state. For example, New York might have to cover up to 25% of benefit payments and 75% of administrative costs. Estimates show that could cost the state between $366 million and $1.8 billion by 2028, depending on payment error rates.
Rachel Sabella of No Kid Hungry New York called the move a “vote to increase childhood hunger.” She said it would create more red tape and shift an “impossible cost burden” to the states.
Medicaid cuts could cost jobs and coverage
The legislation also slashes $10 billion from federal Medicaid funding for New York. The Fiscal Policy Institute projects this could eliminate 78,000 health care jobs. It also warns of another 136,000 job losses from economic ripple effects.
New York’s Essential Plan, which covers low-income residents, would lose 57% of its funding. That could force more than 500,000 enrollees—mostly immigrants—into the state’s Medicaid program, costing $2.7 billion.
In total, the state could lose over 215,000 jobs. New York City would bear the brunt, potentially losing $5.4 billion in Medicaid support. One local hospital system estimates losses of nearly $1 billion.
Political reactions split by party
Democratic leaders across New York blasted the bill. Governor Hochul said it “shreds the safety net to benefit the billionaire class.” NYC Comptroller Brad Lander argued it could take health care from over 134,000 New Yorkers in just one district alone.
Meanwhile, Republican lawmakers defended their votes. Rep. Mike Lawler said 93% of families in his Hudson Valley district earning under $300,000 would now fully deduct their SALT payments. Rep. Nick LaLota called the bill a win for Suffolk County, where many families could save up to $8,000 on federal taxes.
But Lawler faced criticism for breaking previous promises. He had pledged not to cut SNAP or Medicaid. Earlier this year, he even said those programs wouldn’t be touched.
What comes next?
The bill now moves to the Senate. Senate Majority Leader Chuck Schumer said it “steals from working families to fund tax breaks for the rich.” He warned the legislation could destroy up to 700,000 clean energy jobs nationwide by weakening tax credits.
While the bill also includes changes to immigration enforcement, infrastructure, and federal spending, its deep cuts to public aid have sparked a fierce backlash.
For now, the future of the legislation remains uncertain. But if passed into law, it could reshape how millions of New Yorkers access food, health care, and economic relief.
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