Signed into law July 4, 2025. Marketed as tax relief for working families. Nebraska was the first state in the nation to implement its Medicaid cuts. Here's what the nonpartisan Congressional Budget Office found about who actually benefits.
What Gov. Pillen said vs. what the CBO found
Pillen praised the bill as delivering tax relief for Nebraska families and moved Nebraska to the front of the line on implementation. The nonpartisan Congressional Budget Office told a different story.
Bottom 10% of earners
Lose household resources. Tax cuts deliver little. Medicaid and SNAP cuts take more.
Top 10% of earners
Gain household resources. Extended tax cuts, business depreciation, and income tax reductions flow upward.
Source: CBO Distributional Effects of Public Law 119-21, August 2025 ↗
What proponents highlight. What independent analysis found.
No Tax on Tips
Marketed as: Deduction of up to $25,000 on tip income for workers in tipped occupations.
Reality: Primarily benefits workers who already have enough total income to owe federal tax. A tipped worker earning $25,000 total likely owes little federal income tax regardless, meaning the deduction is worth little or nothing to the lowest-wage service workers it's marketed toward.
No Tax on Overtime
Marketed as: Deduction of up to $12,500 on overtime premium pay (the 0.5x portion only, not base wage). Phases out above $150,000 income.
Reality: Does not apply to the self-employed or gig workers. Only covers FLSA-defined overtime. Workers without stable full-time employment, who most need overtime income, often aren't covered.
Child Tax Credit: $2,000 → $2,200
Marketed as: Increased per-child credit with permanent inflation indexing starting 2026.
Reality: The phaseout thresholds are $200,000 for single filers and $400,000 for married filers — meaning upper-income households fully qualify. The lowest-income families with no federal tax liability receive little or no benefit.
Sen. Fischer's office claims the bill saves the average Nebraska household $2,400 per year. The CBO's post-enactment analysis found the lowest-earning Nebraskans — those most likely to work tipped and overtime jobs — lose more from benefit cuts than they gain from tax provisions.Fischer column ↗CBO report ↗
Medicaid cuts
Over 10 years. Work requirements, more frequent eligibility checks, reduced federal matching rates.
SNAP cuts
Over 10 years. Expanded work requirements, tighter eligibility, immigrant restrictions. 2.4M people lose SNAP nationally in an average month.
The math doesn't balance
Even with nearly $1.1 trillion in cuts to safety net programs, the tax cuts are so large that the CBO scores the bill as adding $3.4 trillion to the federal deficit over 10 years. The bill cuts services for people at the bottom and borrows to pay for tax cuts at the top.
Nebraska was first
On May 1, 2026, seven months ahead of the federal deadline, Nebraska became the first state in the nation to implement Medicaid work requirements under the bill. Gov. Pillen co-announced the milestone with CMS Administrator Dr. Mehmet Oz.
To keep Medicaid coverage, expansion enrollees aged 18-64 must now document 80 hours of work, education, or community service per month and report it to the state. Those who can't document it, or who miss the paperwork, lose coverage. The Nebraska Hospital Association projected approximately 23,000 Nebraskans would lose coverage in 2026 alone.
NBC News: Nebraska rolls out Medicaid work requirements ↗The One Big Beautiful Bill is not an isolated event. It follows the same structure as Nebraska's own LB 754 — the state income tax cut Pillen calls "the largest in state history." Both are marketed as relief for working families. Both primarily deliver benefits to higher earners while cutting services used by lower-income Nebraskans.
LB 754 — Nebraska's state income tax cut
The bottom 20% of Nebraska earners save an average of $20/year under the full package. An estimated 83% of corporate income tax cuts go to out-of-state corporations and shareholders. To close the resulting $646 million deficit, Nebraska cut child care subsidies for working families and reduced DHHS services.
One Big Beautiful Bill — federal
Bottom earners lose $1,200/year. Top earners gain $13,600/year. To partially fund the tax cuts: $911 billion from Medicaid, $187 billion from SNAP. Adds $3.4 trillion to the deficit. Costs passed to future taxpayers.
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