Trump’s signature bill is making budget problems worse in red states

When President Donald Trump signed the One Big Beautiful Bill Act into law on July 4, 2025, detractors — including liberal economists Paul Krugman and Robert Reich — argued that it would have a range of negative effects, from increasing the United States' federal deficit to defunding key safety-net programs such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP). Trump and his Republican allies, however, celebrated the bill as his signature achievement.

Another negative effect of the One Big Beautiful Bill that Trump's critics predicted was budget shortfalls at the state level. According to Politico reporter Natalie Fertig, some of those shortfalls are occurring in red states.

"Republican-led states facing major budget shortfalls in 2026 are facing an awkward reality: President Donald Trump's signature tax and spending bill is making their problems worse," Fertig reports in an article published on March 25. "Federal tax cuts approved by Republicans as part of the megabill, coupled with new requirements for Medicaid and the Supplemental Nutrition Assistance Program, are costing some states as much as $450 million this year in added costs and lost tax revenue, further squeezing budgets that were already stretched thin. Legislatures are now considering cuts and reallocations, including a cut to childcare subsidies in Missouri — a 5 percent reduction across state agencies in Arizona and a $22 million cut from disability services in Idaho."

In 2024, deep red Idaho was one of Trump's best states: He carried Idaho by roughly 36 percent. But according to Fertig, the One Big Beautiful Bill "is estimated to cost" Idaho "$155 million in 2026 and $175 million in 2027."

Fertig quotes Idaho State Rep. Jordan Redman, a Republican, as saying, "We're stealing from Peter to pay Paul…. It's put us in a predicament where now, we're trying to figure out, 'OK, what programs do we keep? What programs do we cut?'"

Idaho State Sen. Jim Guthrie, another Republican, is sounding the alarm as well.

Guthrie told Politico, "The feedback I'm hearing from citizens is that extra few bucks on their (return) at the end of the year, because of the taxes they didn't have to pay, comes secondary to wanting us to take care of the things that government needs to be invested in. Which is your infrastructure and your roads and bridges and schools and also your Medicaid population."