Joe W. Bowers Jr. | California Black Media
Pres. Donald Trump’s “One Big Beautiful Bill,” signed into law on July 4, is already reshaping California’s 2025–26 state budget.
With $1.6 to $2 trillion in projected federal spending cuts over the next decade, the law slashes Medicaid, food assistance, housing, transportation, education, and clean energy programs — centerpieces of California’s social safety net programs and the state’s equity goals.
Gov. Gavin Newsom called the bill “a complete betrayal of Americans by the Trump administration,” warning that it “decimates middle-class opportunities — including health care and children’s access to college.”
Medi-Cal and Health Services
The law’s most immediate impact falls on Medi-Cal, California’s Medicaid program, which covers about
15 million residents — nearly one-third of all state residents. Black Californians are especially at risk, relying on Medi-Cal more often than other groups due to chronic health disparities and economic inequality. Currently, over 3 in 5 (61%) Black children and youth and almost half of all Black residents — rely on Medi-Cal for their health coverage.
The new law replaces Medicaid’s open-ended federal match with capped block grants. Since the federal government funds about 60% of Medi-Cal, analysts estimate California could conservatively lose $2.8 billion per year in federal funding over 10 years.
Anticipating federal cuts, California’s enacted 2025–26 budget increases General Fund spending on Medi-Cal to $39 billion — about $1.2 billion higher than the previous year. Still, officials warn that optional
benefits such as dental, vision, and CalAIM services may be reduced if federal support isn’t restored.
CalAIM — California Advancing and innovating Medi-Cal — provides Enhanced Care Management, medically tailored meals, transitional rent, sobering centers, and doula care to high-need groups like the unhoused and chronically ill.
Sen. Akilah Weber Pierson (D–San Diego), chair of the California Legislative Black Caucus (CLBC), warned: “It will force low-income seniors to choose between medicine and rent, leave children with chronic illnesses without consistent care, and strip people with disabilities of daily support.”
The Groundwork Collaborative, an economic think tank, estimates 3.5 million Californians could lose Medi-Cal coverage. Another 250,000 may lose Covered California plans if the Affordable Care Act (ACA) premium subsidies expire in 2025.
“Millions of Californians are about to lose their healthcare,” said Assemblymember Isaac Bryan (D–Ladera
Heights), CLBC vice chair. “Our seniors will lose safety nets, and the Black community will feel the brunt because we already live at the margins of healthcare, of education, of economic support in this country.”
The state has already frozen Medi-Cal enrollment for undocumented adults and plans to impose $30 monthly premiums for enrollees aged 19–59 starting in 2027. Optional benefits could be suspended if the funding gap grows.
Groundwork also warns that more than 25 hospitals and 15 nursing homes — mostly in rural and other underserved areas — are at risk of closing.
Food, Education, and Work Requirements
The One Big Beautiful Bill expands work requirements for CalFresh (SNAP). Beginning in 2026, adults under 65 must work, volunteer, or attend training 80 hours per month to keep benefits — extending requirements that previously applied only to adults under 50.
Medi-Cal expansion enrollees face similar conditions unless exempt. These changes pose barriers for low-income Californians who struggle to find consistent work.
Groundwork estimates that 3.1 million Californians could lose food assistance or see benefit reductions. “Food insecurity will rise as families skip meals to afford other essentials,” said Liz Pancotti, policy director at Groundwork.
Because CalFresh enrollment affects Local Control Funding Formula (LCFF) allocations to schools, a decline in participation could reduce funding for schools serving Black and low-income students.
The Education Trust (EdTrust) called the la “nothing short of the Great American Heist — a cruel, calculated effort to strip students and working families of education, healthcare, and economic mobility.”
Climate and Transportation Cuts
California had received federal Inflation Reduction Act (IRA) funding for clean energy and transit projects in underserved communities like South L.A., Richmond, and Oakland — including an $8 million urban forestry grant for Oakland. The repeal of these provisions threatens weatherization efforts, zero-emission bus deployment, and air-quality improvements.
The Center for American Progress warned the rollback could raise energy costs and worsen air quality in low-income neighborhoods. Transit agencies now face delayed projects and potential layoffs as funding evaporates.
State Response and Political Divide
“We must preserve essential services while keeping the state on solid footing. That will require difficult tradeoffs,” Senate President pro Tempore Mike McGuire (D–Healdsburg) said about the state budget.
Lawmakers are seeking federal waivers to preserve CalAIM services before the current authorization expires in December 2026.
While California’s Congressional Democrats opposed the bill, Republicans supported it. Rep. Vince Fong (R–Bakersfield) said the bill “delivers immediate and meaningful results for the Central Valley, provides much-needed tax relief for working families and small businesses.”
However, the Congressional Budget Office estimates the bill will add $3.4 trillion to the national debt over ten years. The Committee for a Responsible Federal Budget puts the figure at $4.1 trillion, while the Cato Institute estimates as much as $6 trillion.
“People are still going to get sick. They’re still going to have babies,” said Gbenga Ajilore, Chief Economist at the Center for Budget and Policy Priorities. “But now the cost of care will shift to hospitals and the state. That’s not good policy– it’s just moving the burden downstream.”
Supporters say the “One Big Beautiful Bill” curbs fraud in Medicaid and SNAP, but critics argue it targets recipients — not fraud — and pushes eligible people off needed programs.
Critics say the cuts are designed to fund tax breaks for the wealthy, not reduce the deficit. The law leaves California’s 2025-2026 budget fixes vulnerable. Without lasting federal aid, low-income Californians -including those in Black communities — will bear the brunt, facing cuts to health care, housing, and climate programs.
