Part 4: "Decoding the OBBBA" What Happens Next? The Porter Group Perspective

We've deconstructed the "Big" in the One Big Beautiful Bill Act, analyzing its provisions and impacts on individuals and organizations. In this final installment, we shift our focus from what is to what's next, offering The Porter Group’s perspective on the legislation's political and economic future.

The Three Axes of Future Policy

The OBBBA, while massive, is not the final word. Its structure creates three predictable areas of future political and economic tension:

1. Fiscal Sustainability and the Deficit: The OBBBA is projected to add trillions to the national debt over the next decade. The debate over how to pay for the permanent tax cuts or whether to let the safety net cuts stand will dominate every future budget cycle. Expect renewed pressure on Social Security, Medicare, and defense spending as Congress grapples with the fallout.

   
   

2. The 2028 "Cliff" and Subsequent Tax Reform: While the largest TCJA tax cuts were made permanent, the popular Tip Deduction, Overtime Deduction, and Senior Deduction are all temporary and set to expire at the end of 2028. This creates a new, smaller, but still politically potent "tax cliff" just before the next presidential election. The legislative scramble to extend these benefits will be an immediate future focus.

3. State-Level Response to Federal Cuts: As federal funding for Medicaid and SNAP tightens and eligibility requirements become stricter, state governments, which administer these programs, will be forced to make difficult choices. Do they raise state taxes to fund the services lost to federal cuts or do they allow the safety nets to shrink? We anticipate a surge in state level policy innovation and legal challenges to the new federal mandates.

4. 
   

The Porter Group's Advisory: Navigating the New Normal

The era of the OBBBA demands a long-term, adaptive strategy from all stakeholders:

• For Businesses: The clarity provided by the permanent tax provisions is a gift. Do not wait to execute capital planning! Maximize the benefits of 100% bonus depreciation and R&D expenses immediately! Focus on attracting and retaining labor that is benefiting from the new personal tax breaks.

• For Nonprofits: The mission just got harder. Fundraising strategies must pivot to focus on impact-driven philanthropy to offset potential reductions in high net worth and corporate giving caused by the new deduction floors. Operational budgets must be adjusted to account for higher client volume and need.

• For Individuals: The tax breaks are welcome, but the complexity is real. Tax planning should be revisited now to maximize the temporary deductions, understand the higher Child Tax Credit, and plan for the expiring clean energy credits.

  
  

The Porter Group's Final Word: The One Big Beautiful Bill Act is a landmark shift that codifies a distinct set of fiscal priorities for the foreseeable future. The winners have gained certainty and incentives; the most vulnerable face new challenges. Our role at The Porter Group is to help you navigate the complexity, maximize your benefits, and anticipate the inevitable political and economic repercussions that are already on the horizon.