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Making Connections: Federal Fallout & The Leadership North Carolinians Need

September 12, 2025
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En español: Hacer Conexiones: Consecuencias Federales y el Liderazgo que los Carolinenses Necesitan

At our quarterly Making Connections gathering, the NC Budget & Tax Center unpacks the impacts of the harmful Republican megabill passed this summer and signed into law by President Trump — and the important work underway to push back against efforts to divide us and pit our issues against each other.

You can review the recording of the webinar in English and Spanish here, and the slides here.

And check out these publications from the NC Budget & Tax Center that outline key findings we discussed:

There are several ways to engage and take action -- we hope you will take at least two and share these with your networks:

Question Follow-Ups

Here are some resources to dig deeper into the questions raised and comments shared during our session.  We hope these will help you to set the record straight on this bill and its impact in North Carolina.

  • What are the tax impacts of the harmful megabill passed by Congress?

The total impact of the tax changes in HR1 will deliver the greatest average tax cut to the richest 1 percent in NC, at more than $61,000. Overall, the vast majority of North Carolinians will be worse off through the deep cuts to health care and food assistance that are “paying for” tax breaks for the ultra-wealthy.

  • Why are so many going to lose Medicaid coverage? Is it because they aren’t working or can’t meet the work reporting requirement?

The first coverage losses that have been lifted up are related to the new work reporting requirement in Medicaid.  The additional red tape of reporting work hours is likely to lead to coverage losses and isn’t likely to boost employment.  You can read more here. 

92 percent of the adult enrollees in Medicaid are either working, caring for family members or in school, or have a disability that prevents them from working.

  • What are the implications of this bill for FEMA and Western NC?

The harmful megabill, HR1, does not make changes to FEMA, but the cuts to health care and food assistance are likely to have a disproportionate harm to Western NC as the region rebuilds.  That’s because food assistance is critical to stabilizing households who have lost work in the region, and access to health care providers could be impacted by the loss of Medicaid coverage and various funding freezes impacting health care providers.

Check out the latest labor market data from the region to see the scale of job losses.

New legislation was introduced after HR1 passed that would significantly change FEMA.  This bipartisan piece of legislation is supported by the National Low Income Housing Coalition, and you can read their summary here.

  • How will Medicare and Social Security be impacted by HR1? Aren’t these actions needed to save these programs from collapse?

HR1 does not directly cut these programs. However, because of a 2010 law referred to as PAYGO, when the deficit is increased by a certain amount it requires automatic cuts of up to 4 percent in Medicare as well as other programs.

HR1 increases the deficit over the period of 2025 to 2034 by $3.4 trillion which will lead to these automatic cuts to Medicare.

In addition, the bill prohibits efforts by states to contain costs in health care for Medicare enrollees and limits the ability of people with Medicare coverage to enroll in Medicare Savings Programs. For a couple on Medicare with a combined income of $21,000, out of pocket costs could increase by more than $8,300.

Social security was not impacted by HR1 but has been the target of other federal actions in recent months that have put the stability of the program at risk.  You can read more here.

Actions in HR1, among other recent federal actions on immigration and economic policies, put social security at further risk rather than provide greater stability.

  • What is happening now and what is the timeline for other changes?

This helpful timeline details various provisions of the bill and when they will go into effect.  Several provisions went into effect immediately but many more will roll out over the next few years.  This means that state policymakers have to consider now how to prepare for these changes and minimize the harm to North Carolinians.

See the Center on Budget & Policy Priorities timeline here: https://www.cbpp.org/research/federal-budget/implementing-the-harmful-republican-megabill-a-timeline

  • What hospitals at risk of closing? Why?

Sources, including this letter during the Congressional debate,  identified these hospitals at risk of closure because of service they provide to people who rely on Medicaid coverage to access health care.

  • UNC Rockingham Hospital in Eden
  • Person Memorial Hospital  in Roxboro
  • UNC Health Chatham in Siler City
  • MH Angel Medical Center  in Franklin
  • Blue Ridge Regional Hospital in Spruce Pine

With the increased red tape for accessing Medicaid through work reporting requirements and the limits on how the state can fund its share of the cost of Medicaid, the loss of Medicaid coverage will mean patients won’t have a way to pay for providers to care for them, and providers won’t have the funding needed to pay their bills.

  • The immigration system is broken and needs to be fixed. Doesn’t this bill do that?

No.  This bill doesn’t fix what’s wrong with the immigration system. In fact, it creates a system that is based on “pay to play” by increasing fees in immigration applications and filings, and that emphasizes deportation and detention with significant increases in funding for these activities. You can read more here.

  • The bill restricts access to public benefits only for undocumented immigrants.

False.  Lawfully residing immigrants are being excluded from programs, and strict prohibitions on undocumented immigrants accessing public programs have been in place for years. See slides for more details.