The so-called "One Big Beautiful Bill" is currently making its way through the U.S. Senate. U.S. President Donald Trump’s signature tax legislation was sold as a game-changing move for the American economy. It promised to unleash trillions in tax cuts designed to revitalize U.S. industry. The logic sounded simple enough, straight out of a classic economics textbook: slash taxes and regulations to remove barriers for businesses. In theory, this would lead to more investment, hiring and a booming economy.

The White House Council of Economic Advisers projected that the bill would boost GDP by 4.2% to 5.2% in the short term, with long-term growth of 2.9% to 3.5%. However, similar tax cuts under former President George W. Bush in 2001 and 2003 failed to deliver the promised economic boom. Trump’s plan, it turns out, follows the same pattern.

Independent analyses paint a far less optimistic picture. The Tax Foundation, a generally pro-business think tank, estimated that the law would raise long-run gross national product by just 1.1%. Yale University actually forecast a slowdown of 3% in the economy, not growth!

Critics argue, and rightly so, that such policies increase deficits and fail to deliver on promises of investment and economic expansion. The Penn Wharton Budget Model projected that the bill would add nearly $4.5 trillion to the federal debt over the next decade. And despite optimistic growth forecasts, only about 16% of the revenue loss would be offset by increased economic activity.

To close that gap, the government has few options: cut spending, increase borrowing, or both. In practice, this means reducing funding for essential services that working Americans rely on, such as health care, education and infrastructure.

One big, ugly cost

The poor will ultimately bear the burden, an unfortunate truth. These cuts will lead to many people losing their jobs, with the burden falling disproportionately on working- and middle-class Americans, who lose most from service cuts, while the wealthy gain most from the tax breaks. According to the Tax Policy Center, under the Bush-era tax cuts that phased in by 2010, the top 1% saw their after-tax income jump by 6.7%. The middle 20% got a 2.8% bump. And the bottom 20% saw just 1.0%. Poverty itself erodes human capital by limiting access to quality health care, education and other opportunities, creating a cycle that is difficult to break.

But beyond who pays the bill, the proposed framework falls short of its promises, mainly because it overlooks one crucial factor in the White House’s projections: human capital, the health, skills and knowledge that drive economic growth.

Yet the proposed cuts to Medicaid could leave nearly 11 million Americans uninsured. Trump claimed drug price cuts would keep medicine affordable. However, even his own administration admitted that U.S. brand-name drugs remained over three times more expensive than those in other developed nations, even after discounts.

When millions lose Medicaid coverage or face higher health care costs, they are more likely to postpone or forgo necessary medical care, including preventive services and treatment for chronic conditions. Unmanaged health issues lead to increased illness, more sick days and reduced productivity among workers. A workforce that can’t afford to get sick, access treatment or manage chronic illness is not going to deliver productivity gains.

Worse, children who are the future workforce, suffer too. When parents are unhealthy or financially burdened by medical costs, it affects their ability to invest in their children's well-being and education, limiting the human capital development of future generations.

Medicaid provides critical health services for millions of children and pregnant women. Historic $700 million SNAP cuts remove free school meals from hundreds of thousands. Malnutrition in early life has profound and often irreversible negative impacts on cognitive development, physical health and a child's ability to learn.

Who deserves investment?

For decades, the U.S. has led the world in innovation, not because of cheap labor or low taxes, but because it has invested in its people. It funded public research institutions, partnered with private industry and welcomed foreign students with open arms. From Silicon Valley to NASA, America's global dominance was built on the foundation of its universities – engines of knowledge, research and talent from around the globe. After World War II, the U.S. made long-term investments in science, technology, engineering and math (STEM). STEM-related industries contribute to 69% of the U.S. GDP and $2.3 trillion in annual federal tax revenue, according to the Consortium of Social Science Associations.

But that foundation is starting to crack. This bill proposes a 15% funding cut to the U.S. Department of Education, along with significant reductions to Pell Grants and changes to student loan programs. Those will make higher education less accessible and more expensive for low-income and middle-class students. Many may be forced to forgo college, choose less expensive and potentially less career-relevant programs. This directly leads to a smaller pool of college-educated workers, essential for high-skill industries and innovation.

To make matters worse, when the administration suspended visas for foreign students, even those accepted to Harvard and MIT, it turned its back on the very formula that made America strong. At a time when global competition for talent is fiercer than ever, closing the door on the world’s brightest minds is an act of economic self-sabotage.

While the intent of some cuts might be to reduce spending, the reality is that a sicker, less educated and poorer population will likely require more public assistance in other areas (e.g., disability benefits, emergency social services), creating a burden on the remaining safety net programs. What looks like a win on paper becomes a loss in practice.

Ultimately, economic policy is about choices. Prioritizing tax cuts for corporations while divesting from public health and education is not a sustainable strategy. It’s a trade-off that benefits a wealthy few while leaving the majority behind. It mortgages the nation’s long-term prosperity for the illusion of short-term growth.

As history shows, the wealthiest Americans usually gain the most from supply-side tax cuts. Working-class and low-income Americans rarely see direct benefits, but they’re often the ones who pay the price.

If politicians want sustainable growth and global leadership, they need to invest in what actually drives prosperity: people.