One Big Beautiful Bill, One Big Blow to North Carolina

With Republicans passing their “One Big Beautiful Bill” (OBBB) Act into law, vital programs that many of our most vulnerable neighbors rely on are facing severe cuts. To appear fiscally responsible, while still failing to finance their tax reductions for the wealthy without increasing the deficit, SNAP and Medicaid, loan programs for higher education, and credits for clean energy all faced cuts or total elimination.

While Americans will feel the effects of the OBBB nationwide, the bill will have a particularly significant impact on North Carolina. Here are some of the ways the OBBB will hurt North Carolinians.

Entitlements

Key to the OBBB are cuts to SNAP and Medicaid. SNAP, the Supplemental Nutrition Assistance Program formerly known as the Food Stamp Program, is the nation’s most extensive nutrition assistance program, accounting for 67.8 percent of the United States Department of Agriculture’s nutrition assistance spending in FY 2023: that is more than spending on the National School Breakfast and Lunch Programs, WIC (the Special Supplemental Nutrition Program for Women, Infants, and Children), the summer food service program, and all other USDA food assistance combined times two. In North Carolina, SNAP helps feed 1 in 8 residents, of whom 68 percent live below the poverty line, is accepted at over 9,000 retailers, and helps support our massive agriculture and agribusiness sectors.

Medicaid is the nation’s largest single payer of healthcare, providing coverage for low-income Americans. With over 70 million enrollees nationwide, over 3 million North Carolinians were enrolled as of February 2025, including 1.2 million rural enrollees, 32.1 percent of our state’s rural population. Medicaid rural coverage is key, as it provides some security to rural hospitals by insuring individuals who might otherwise be uninsured, guaranteeing the hospital gets paid when they treat them, and giving them more consistent access to preventative care, both making the patient healthier and lowering the odds the hospital has to give uncompensated emergency care.

Both the SNAP and Medicaid cuts in the OBBB will be disproportionately detrimental for North Carolina. SNAP was formerly entirely funded by the federal government, with states sharing in some of the administrative costs. However, the OBBB shifts some of the funding burdens onto the states based on payment error rates, which would require NC to pay $420 million, according to Governor Stein, putting us at risk of being “forced to end our SNAP program entirely.”

The Medicaid provisions in the OBBB will also have a particularly significant impact on North Carolina, as well as a heightened impact on our rural communities. Through a combination of work requirements – ill-guided measures that typically fail to increase the effectiveness of a welfare program – changes to ACA Marketplace health plans, limiting provider taxes, decreasing access to coverage, and restricting state-directed payments Federal Medicaid spending is projected to decrease by $1 Trillion, with a 11.8 million increase in uninsured people. In North Carolina, the OBBB Medicare provisions are expected to have a $32 billion impact and jeopardize Medicaid expansion, which would, at a minimum, affect the 663,558 people currently enrolled through expansion as of June 3rd.

Both of these entitlement cuts would disproportionately impact rural North Carolina. SNAP benefits are disproportionately received by our rural communities and support our agriculture sector, which is predominantly in our rural counties. The impact of Medicaid cuts on rural hospitals in North Carolina has been a national news story, as Medicaid often serves as a vital lifeline for these hospitals. Putting Medicaid expansion at risk jeopardizes a vital financial lifeline that many rural hospitals had been anticipating and relying on to keep the doors open.

Higher Education

While the entitlement cuts may be the most widely discussed impact of the OBBB, the omnibus legislation also makes higher education less affordable. First, the bill directly attacks higher education institutions with its graduated endowment tax. University endowments are the funds and assets held by institutions intended to support the institution’s educational mission through providing investment income. While traditionally these endowments haven’t been taxed, barring the handful of universities with endowments over $500,000 per student, Section 70415 of the OBBB sets a scale for the endowment tax: 1.4 percent for endowments between $500,000 and $750,000 per student; 4 percent between $750,000 and $2,000,000; and 8 percent over $2,000,000.

North Carolina colleges like Duke ($673,013 in FY22) and Davidson ($667,026 in FY22) – but not Wake Forest at $216,640 – might escape a tax hike depending on how much their endowments increased, enrollment changed, and how the Trump administration calculates endowment per student. Regardless, students from North Carolina who attend elite colleges out of state are likely to see a hit in financial aid, one of the primary uses of endowment dollars.

The OBBB also heavily restricts options for student loan repayment to the detriment of borrowers. It will phase out multiple income-based repayment plans, forcing enrollees to switch, which may increase their payments or delay student loan forgiveness. Parent PLUS loans will have a $65,000 lifetime cap, the Graduate PLUS program for affording graduate and professional school is eliminated, and all new borrowers only have two options starting in July 2026, a standard 10 to 25-year plan, or the new income-driven Repayment Assistance Plan that requires 30 years of repayment before potential forgiveness.

North Carolina is one of the most heavily student loan debt-burdened states, with $51.09 billion in outstanding debt and 1,352,000 borrowers, for an average of $ 37,497 per borrower. This represents twice as much outstanding debt and as many borrowers as South Carolina, for comparison. The adverse consequences of student loan debt are well documented: it drags like a recession, reducing consumer spending, business growth, and homeownership, according to the Education Data Initiative. Because of the OBBB, North Carolinians will have a harder time repaying their loans, accessing forgiveness, and taking out loans to attend school in the future.

Clean Energy

The OBBB also features a myriad of recisions for environmental protections and clean energy, paired with the termination of environmental subsidies. Title VI includes rescissions of funding for clean heavy-duty vehicles, diesel emissions reductions, addressing air pollution, the low-emission electricity program, section 211(o) of the Clean Air Act, EPA reviews, and 17 other environmental programs. Tucked into Title VII on finance are 10 terminations, two terminations with restrictions, one set of modifications, and one phase-out with restrictions of various green credits and deductions, including the clean vehicle credit, energy efficiency home improvement credit, and the energy-efficient commercial buildings deduction. Trump accompanied these provisions with an executive order doubling down on cuts to clean energy.

North Carolina has been set to lead the United States in green energy and green construction, being second nationally in installed solar capacity and the site of prominent green developments like the $1.4 billion sodium-ion battery plant in Edgecombe County and the $13.9 billion Toyota battery plant in Greensboro, advocates warned that the OBBB clean energy provisions could cost tens of thousands of green jobs and raise electricity cost for families by more than $200 a year, given that North Carolina has seen over $24 billion in clean energy investments.

The OBBB contains provisions that will harm millions of North Carolinians and numerous sectors of our economy. While the effects of this bill were enough to lead Senator Tillis to flip (and now retire), every House Republican voted for this bill. Often, we view what goes on in Washington as detached from our lives here at home, but the effects of this bill will be felt at kitchen tables, in hospitals, and bank accounts all across the state. It’s on us to make sure that the lawmakers who voted for it, including every House Republican from North Carolina, feel what we feel, too.