NY’s Rep. AOC Provides Helpful Guide For When Budget Cuts Will Hit, Who Will Be Affected, What Constituents Can Do
The legislation, which was officially signed into law on July 4th, makes drastic cuts to health care, food assistance, student loans, and energy programs to pay for tax cuts for the wealthiest people on the planet.
This bill includes limited tax benefits for tipped workers and Social Security recipients that go into effect immediately and will expire in 2028. Most changes to health care will be implemented over time, with many of the largest changes not occurring until 2026 – after the midterm elections.
Here is how the bill could impact you:
The Largest Loss of Health Care in American History
This bill slashes critical funding for Medicaid, Medicare, and the Affordable Care Act, and makes changes that will leave millions uninsured and drive up health care costs for everyone. New York State will announce more details on when to expect changes and how it will affect your health coverage.
Paperwork Requirements for Medicaid (Ages 19-64)
Takes Effect December 2026
If you are on Medicaid, you will have to report working or volunteering for at least 80 hours a month, or be enrolled in school at least part-time, to keep your benefits. Some individuals, including people with disabilities, pregnant people, and others may qualify for an exemption from this requirement.
Changes to Medicaid Renewal
Takes Effect January 2027
You may also be required to renew your Medicaid twice a year, instead of once a year.
Changes to Medicaid AND Medicare Eligibility
Medicaid: Takes Effect October 2026
This bill terminates Medicaid coverage for many lawful immigrants. Refugees, individuals granted parole, individuals granted asylum or related relief, and certain survivors of domestic violence and human trafficking may no longer be eligible.
Medicare: Takes Effect December 2026
This bill terminates Medicare coverage for many lawful immigrants, including asylees, refugees, and people with Temporary Protected Status (TPS).
If you are a lawful permanent resident, you are still eligible for Medicaid and Medicare.
How Loss of State Funding Will Impact You
Even if you are not on Medicaid, this bill reduces the amount of federal funding New York State receives and could cause the following effects: the state may have to raise taxes to make up for a loss of funding or cut back on other public services. Many local hospitals will have to reduce services, increase wait times, or close due to lack of funds.
Changes to Food Assistance
This bill cuts food assistance like SNAP and may lead to a decrease in your benefits. If you have questions about how your food benefits may be impacted, go to New York City’s Department of Social Services website.
Paperwork Requirements for SNAP
Takes Effect Immediately
Most adults up to age 64 will now have to fill out paperwork showing they are working, volunteering, or participating in a work training program for at least 80 hours a month – only families with children under 14 are exempt. This previously applied only to adults ages 18 to 54. Veterans, unhoused people, and former foster youth will now also be subject to these policies.
Changes to SNAP Eligibility
Takes Effect Immediately
This bill bars most legally present immigrants who are NOT lawful permanent residents, meaning refugees, asylees, and others may no longer be eligible for SNAP.
Makes Education More Expensive
Takes Effect as Soon as July 2026
If you are a college student, this bill will make it harder for you to finance your education.
The following changes have been made:
- Eliminates the following programs: Graduate PLUS loans, Saving on a Valuable Education (SAVE), Income-Based Repayment (IBR), Income Contingent-Repayment (ICR), and Pay as You Earn (PAYE) Repayment.
- Changes to Parent PLUS loans: Caps Parent PLUS loans at $65,000 for each child and makes them ineligible for repayment programs.
- Changes Eligibility for Pell Grants: Requires students to be enrolled full-time to receive Pell Grants.
- Creates New Student Loan Repayment Plans: Offers future student loan borrowers only two options for repayment plans: a standard plan and the Repayment Assistance Plan (RAP). RAP may cause unpredictable spikes in monthly payments and includes a penalty for married borrowers.
Increases Your Energy Bill
Trump’s bill eliminates incentives for renewable energy. As a result, the average utility bill in New York will increase by $140 every year until 2030.
The $7,500 tax credit for electric vehicles will expire on September 30, 2025.
Tax credits for home energy upgrades will expire at the end of 2025.
Limited Income Tax Deductions
Despite the Trump Administration’s promises and an official email that came from the Social Security Administration, the bill DOES NOT eliminate taxes on tips, overtime, or Social Security. This bill makes minor, temporary changes to tax deductions.
Tipped & Hourly Workers
Takes Effect Immediately, Expires in 2028
If you are a tipped or hourly worker, this bill provides a temporary federal income tax deduction for qualified overtime and tips. This income deduction is capped at $25,000 per year for both overtime and tips, and will be included in next year’s tax form.
Social Security
Takes Effect Immediately, Expires in 2028
If you are 65 or older, you will be eligible for a $6,000 income deduction. If you are a Social Security beneficiary under the age of 64, you will not receive this deduction.
Increases in Immigration Filing Fees
Takes Effect Immediately
This bill imposes new or increased immigration form filing fees. New fees:
- Asylum applications – $100 per year (even while application is pending)
- TPS registration – increased from $50 to $500
- Special Immigrant Juvenile petition – $250
It also imposes a mandatory $550 fee for filing initial work permit applications for Temporary Protected Status recipients, asylum applicants, and others, placing a financial hardship on people who are not allowed to work.
In service,
The Office of Congresswoman Alexandria Ocasio-Cortez
Alexandria Ocasio-Cortez
In January of 2019, Congresswoman Ocasio-Cortez was sworn-in as the youngest woman and youngest Latina ever to serve in Congress. Her first piece of legislation was the Green New Deal resolution, which envisions a 10-year national mobilization, akin to FDR’s New Deal, that would put millions to work in good-paying, union jobs repairing the nation’s infrastructure, reducing air and water pollution, and fighting the intertwined economic, social, racial and climate crises crippling the country.
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