INTERNATIONAL
Problems galore in the Big and Beautiful Bill: A terminal decline
US President Donald Trump presenting the sweeping spending and tax legislation, known as the "One Big Beautiful Bill Act," after Trump signed it, at the White House in Washington, DC, US, July 4, 2025. - REUTERS/Filepic
THE “One Big Beautiful Bill” (OBBB), freshly signed into law by President Donald Trump, may glitter in its promise of tax cuts, energy revival, and defence strength, but behind the gilded surface lies a torrent of structural weaknesses that threaten to erode the very foundation of U.S. economic stability. Marketed as a grand legislative coup to reignite American greatness, the OBBB is, in reality, a highly regressive policy cocktail that sows deep seeds of fiscal fragility and social inequity.
AI Brief
A Big, Beautiful Deficit Bomb
At the heart of the OBBB lies a fiscal time bomb: USD3.3 trillion will be added to the U.S. deficit by 2034, a staggering burden in an era when interest rates are no longer pinned near zero. The Bill achieves this through sweeping tax cuts—especially for corporations and high-income earners—paired with significant welfare reductions. According to Yale Budget Lab, the bottom 20% of Americans stand to lose USD560 annually, while the top 1% could see gains exceeding USD32,000. This widening chasm is not just a moral hazard but a recipe for long-term political instability.
Moreover, the much-hyped Department of Government Efficiency (DOGE)—supposedly designed to trim government fat—has managed only a paltry USD190 billion in spending cuts, far below its stated target of USD2 trillion annually. That leaves future administrations boxed into a corner: either roll back Trump’s deficit-financed populism or risk further downgrades in America’s fiscal credibility.
Political Optics vs. Policy Substance
The OBBB reeks of short-termism. Its architects are clearly prioritizing electoral optics over economic substance. By pandering to key lobbies—big oil, defence contractors, and wealthy donors—Trump has created a bill that is politically seductive but economically dangerous. The Congressional Budget Office estimates that debt-to-GDP will hit 130%, with annual interest payments ballooning to USD1.9 trillion. This isn’t merely unsustainable; it is economically reckless.
The irony is thick. The bill purports to stimulate growth, yet by shifting wealth upward and gutting Medicaid eligibility, it risks undercutting the consumer base that drives two-thirds of U.S. GDP. What results is not trickle-down economics, but rather a trickle-up fiscal con.
Winners, Losers, and Missed Opportunities
Winners:
Traditional Energy: Fossil fuels are the undisputed beneficiaries. OBBB repeals methane fees, reduces royalty rates for coal, and pumps over USD1 billion into fossil infrastructure and nuclear modernization. Trump’s mantra to “unleash American energy” now has legislative teeth.
Defence and Homeland Security: With USD150 billion in new funding, the military-industrial complex thrives. Funds will support mass deportations, shipbuilding, missile defence, and the controversial “Golden Dome” system.
Losers:
Renewables: In a swift reversal of the Inflation Reduction Act, tax credits for wind, solar, EVs, and home energy upgrades are being phased out. America’s clean energy future has been mortgaged for a fossil-fuelled past.
Healthcare: Medicaid now comes with work requirements—80 hours a month—effectively disenfranchising millions. While demand in healthcare may remain due to an aging population, access will narrow and inequality will deepen.
Markets React — But With Caution
The equity markets initially responded with muted optimism. Consumer and corporate tax relief is, after all, a temporary stimulant. But much of the gain is already priced in. Equity valuations suggest little room for upside surprises, particularly in sectors outside defence and energy.
Credit markets, meanwhile, are flashing yellow. The USD3.3 trillion debt hike means more Treasury issuance, higher term premiums, and a steepening yield curve. The DBS Bank Chief Investment Officer warns against ultra-long bonds and recommends a barbell strategy—focusing on 2–3 year and 7–10 year durations. The smart money is moving into quality credit, particularly A/BBB-rated corporate debt.
Dollar Dilemma and Gold’s Golden Moment
The long-term implications for the U.S. dollar are sobering. While fiscal stimulus typically boosts the dollar, OBBB’s regressive design and lack of productivity-enhancing measures are limiting its growth effects. Instead, the ballooning deficit erodes global confidence in the greenback. The Chinese yuan (RMB), euro, and even Swiss franc stand to benefit as central banks diversify away from dollar reserves.
Gold is the other safe haven. As fiscal fears mount and U.S. Treasury swap spreads widen, gold’s inverse correlation with U.S. stability shines. Investors see in bullion a hedge against not just inflation or war, but policy incoherence.
Oil: More Supply, Lower Prices
While fossil fuel producers are celebrating, the global oil market isn’t. Expanded U.S. drilling and OPEC+ reversals mean more supply. That, coupled with weak demand growth, has kept oil prices soft. Brent is forecast to hover around USD68–69/bbl into early 2026, a far cry from the triple-digit prices seen during geopolitical spikes.
But perhaps the greatest long-term cost of the OBBB is opportunity lost. At a time when global competition in clean technology is intensifying, the U.S. has deliberately sidelined its renewables sector. This isn’t just bad climate policy—it’s bad industrial strategy.
Conclusion: Big, Beautiful, and Blundering
Trump’s “One Big Beautiful Bill” is many things: bold, populist, and superficially stimulative. But beauty, in this case, is skin-deep. Beneath its rhetorical flair lies a poorly structured policy prone to inflating deficits, rewarding the wealthy, harming the poor, weakening the dollar, and delaying the energy transition. Investors may find short-term gains in fossil fuels and defence stocks, but the long-term trajectory points toward fragility, not strength.
The OBBB may go down in history as the moment America chose political theatre over fiscal discipline, optics over outcomes. And in that choice, the global economy, and certainly the American middle class, may be the ultimate losers.
Phar Kim Beng is Director of the Institute of Internationalization and ASEAN Studies (IINTAS), Professor of ASEAN Studies in International Islamic University of Malaysia (IIUM) and a former Head Teaching Fellow at Harvard University.
John Yip is Adjunct Professor at INCEIF University
** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.
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AI Brief
- The bill adds $3.3 trillion to the U.S. deficit by 2034 through tax cuts for the wealthy and corporations, while cutting welfare programs.
- Fossil fuels and defense benefit most, while healthcare access shrinks and clean energy incentives are rolled back.
- The plan risks weakening the dollar, increasing debt costs, and missing global opportunities in renewable energy and industrial growth.
A Big, Beautiful Deficit Bomb
At the heart of the OBBB lies a fiscal time bomb: USD3.3 trillion will be added to the U.S. deficit by 2034, a staggering burden in an era when interest rates are no longer pinned near zero. The Bill achieves this through sweeping tax cuts—especially for corporations and high-income earners—paired with significant welfare reductions. According to Yale Budget Lab, the bottom 20% of Americans stand to lose USD560 annually, while the top 1% could see gains exceeding USD32,000. This widening chasm is not just a moral hazard but a recipe for long-term political instability.
Moreover, the much-hyped Department of Government Efficiency (DOGE)—supposedly designed to trim government fat—has managed only a paltry USD190 billion in spending cuts, far below its stated target of USD2 trillion annually. That leaves future administrations boxed into a corner: either roll back Trump’s deficit-financed populism or risk further downgrades in America’s fiscal credibility.
Political Optics vs. Policy Substance
The OBBB reeks of short-termism. Its architects are clearly prioritizing electoral optics over economic substance. By pandering to key lobbies—big oil, defence contractors, and wealthy donors—Trump has created a bill that is politically seductive but economically dangerous. The Congressional Budget Office estimates that debt-to-GDP will hit 130%, with annual interest payments ballooning to USD1.9 trillion. This isn’t merely unsustainable; it is economically reckless.
The irony is thick. The bill purports to stimulate growth, yet by shifting wealth upward and gutting Medicaid eligibility, it risks undercutting the consumer base that drives two-thirds of U.S. GDP. What results is not trickle-down economics, but rather a trickle-up fiscal con.
Winners, Losers, and Missed Opportunities
Winners:
Traditional Energy: Fossil fuels are the undisputed beneficiaries. OBBB repeals methane fees, reduces royalty rates for coal, and pumps over USD1 billion into fossil infrastructure and nuclear modernization. Trump’s mantra to “unleash American energy” now has legislative teeth.
Defence and Homeland Security: With USD150 billion in new funding, the military-industrial complex thrives. Funds will support mass deportations, shipbuilding, missile defence, and the controversial “Golden Dome” system.
Losers:
Renewables: In a swift reversal of the Inflation Reduction Act, tax credits for wind, solar, EVs, and home energy upgrades are being phased out. America’s clean energy future has been mortgaged for a fossil-fuelled past.
Healthcare: Medicaid now comes with work requirements—80 hours a month—effectively disenfranchising millions. While demand in healthcare may remain due to an aging population, access will narrow and inequality will deepen.
Markets React — But With Caution
The equity markets initially responded with muted optimism. Consumer and corporate tax relief is, after all, a temporary stimulant. But much of the gain is already priced in. Equity valuations suggest little room for upside surprises, particularly in sectors outside defence and energy.
Credit markets, meanwhile, are flashing yellow. The USD3.3 trillion debt hike means more Treasury issuance, higher term premiums, and a steepening yield curve. The DBS Bank Chief Investment Officer warns against ultra-long bonds and recommends a barbell strategy—focusing on 2–3 year and 7–10 year durations. The smart money is moving into quality credit, particularly A/BBB-rated corporate debt.
Dollar Dilemma and Gold’s Golden Moment
The long-term implications for the U.S. dollar are sobering. While fiscal stimulus typically boosts the dollar, OBBB’s regressive design and lack of productivity-enhancing measures are limiting its growth effects. Instead, the ballooning deficit erodes global confidence in the greenback. The Chinese yuan (RMB), euro, and even Swiss franc stand to benefit as central banks diversify away from dollar reserves.
Gold is the other safe haven. As fiscal fears mount and U.S. Treasury swap spreads widen, gold’s inverse correlation with U.S. stability shines. Investors see in bullion a hedge against not just inflation or war, but policy incoherence.
Oil: More Supply, Lower Prices
While fossil fuel producers are celebrating, the global oil market isn’t. Expanded U.S. drilling and OPEC+ reversals mean more supply. That, coupled with weak demand growth, has kept oil prices soft. Brent is forecast to hover around USD68–69/bbl into early 2026, a far cry from the triple-digit prices seen during geopolitical spikes.
But perhaps the greatest long-term cost of the OBBB is opportunity lost. At a time when global competition in clean technology is intensifying, the U.S. has deliberately sidelined its renewables sector. This isn’t just bad climate policy—it’s bad industrial strategy.
Conclusion: Big, Beautiful, and Blundering
Trump’s “One Big Beautiful Bill” is many things: bold, populist, and superficially stimulative. But beauty, in this case, is skin-deep. Beneath its rhetorical flair lies a poorly structured policy prone to inflating deficits, rewarding the wealthy, harming the poor, weakening the dollar, and delaying the energy transition. Investors may find short-term gains in fossil fuels and defence stocks, but the long-term trajectory points toward fragility, not strength.
The OBBB may go down in history as the moment America chose political theatre over fiscal discipline, optics over outcomes. And in that choice, the global economy, and certainly the American middle class, may be the ultimate losers.
Phar Kim Beng is Director of the Institute of Internationalization and ASEAN Studies (IINTAS), Professor of ASEAN Studies in International Islamic University of Malaysia (IIUM) and a former Head Teaching Fellow at Harvard University.
John Yip is Adjunct Professor at INCEIF University
** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.