The White House Council of Economic Advisers is reportedly warning that failing to pass President Donald Trump’s One Big Beautiful Bill Act will leave 8.2 to 9.2 million Americans without health insurance and lead to a “major recession” on par with 2008’s 4% GDP shrinkage.
The warning reportedly comes from the CEA’s memo released Saturday titled “Health Insurance Opportunity Cost if 2025 Proposed Budget Reconciliation Bill Does Not Pass” as Republicans in the House Budget Committee balked at moving the bill forward Friday because it does not go far enough in cutting taxes and spending.
The memo estimated uninsured Americans will rise from 27 million in 2025 to 36 million in 2026 if the first Trump administration’s Tax Cuts and Jobs Act provisions are permitted to expired at the end of this fiscal year.
Fox News reported the memo made the estimations “based on the assumption that states which expanded Medicaid with relatively generous eligibility will pull back to meet balanced budget requirements and try to provide more unemployment support during a severe recession.”
Short of passing the bill, America faces a “very unlikely but plausible worse case” on providing “no policy countermeasures” to the expiring tax cut provisions, the CEA reported, leading to a “moderate to severe recession” in 2026 and ultimately a “major recession” as consumer spending plummets, income taxes increase, and small business investment and hiring slows.
The impact will be far-reaching, according to the memo:
- GDP contracts 4% over two years.
- Unemployment will spike 4%.
- 6.5 million jobs will be lost.
Job loss is a key component to calculating the loss of health insurance, as the lack of employer coverage would leave millions of Americans with none.
The warnings were also outlined in an April report titled, “The Economic Impact Of Extending Expiring Provisions Of The Tax Cuts And Jobs Act,” which warned not passing the bill to extend the first Trump’s administration cuts in the Tax Cuts and Jobs Act will result in a disastrous ecomic forecast:
- Individual marginal tax rates will increase.
- The standard deduction will fall by nearly half.
- The child tax credit will be cut in half from $2,000 to $1,000.
- Small businesses will lose the 20% pass-through deduction (Section 199A).
- Businesses will have to deduct investment slowly over time rather than immediately.
- Distressed communities will see decreased investment from the disappearance of OZs (Opportunity Zones).
“The CEA finds that extending TCJA [tax cuts] will boost the level of short-run real GDP by 3.3 to 3.8% and long-run real GDP by 2.6 to 3.2% compared to if TCJA expires,” the CEA posted on X in April.
“The 2017 Tax Cuts and Jobs Act (TCJA, aka Trump Tax Cuts) unleashed historic prosperity that saw the economy produce record high income gains, record low poverty, and delivered nearly $100B of equity invested in distressed Opportunity Zone communities.”
Newsmax reached out to the White House for comment on the memo’s findings.
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