The Congressional Budget Office released a preliminary analysis late on Tuesday of the distributional effects of the Republican reconciliation bill, finding that the plan would help most households on average, but would notably help high-income households more, while actually taking from the poorest.
Coming in response to a request by Democratic leaders in Congress, the analysis said: "CBO estimates that if the legislation was enacted, U.S. households, on average, would see an increase in the resources provided to them by the government over the 2026-2034 period. The changes would not be evenly distributed among households. The agency estimates that in general, resources would decrease for households in the lowest decile (tenth) of the income distribution, whereas resources would increase for households in the highest decile."
CBO says the loss in resources among the lowest 10% in income would be driven mainly by reduced in-kind transfers through Medicaid and food assistance programs. At the top of the income scale, gains for the top 10% would be driven by reductions in taxes paid.
This chart from the CBO analysis comparing the effects of the bill on households in the bottom 10% of income to those in the top 10% makes the uneven distribution clear:
Lawmakers react: Republicans rejected the analysis, saying it fails to capture the positive economic effects of the bill on all income groups while accusing Democrats of wanting people to be "stuck on the welfare rolls."
"First, they're not measuring economic benefits to low-income earners, they're measuring federal resources distributed," House Budget Chairman Jodey Arrington said. "For instance, there are fewer transfer payments to people on welfare if you prohibit illegal immigrants from accessing these programs and enact common sense work requirements to stop trapping people in dependence. Second, when you allow Americans from every walk of life to keep more of their income, you lift millions out of poverty ..."
Democrats, on the other hand, embraced the analysis, saying it confirms what they've been saying about the bill all along. "This is what Republicans are fighting for - lining the pockets of their billionaire donors while children go hungry and families get kicked off their health care," Rep. Brendan Boyle, the senior Democrat on the Budget Committee, said in a statement. "CBO's nonpartisan analysis makes it crystal clear: Donald Trump and House Republicans are selling out the middle class to make the ultra-rich even richer."