Reconciliation process concludes as President Trump signs the One Big Beautiful Bill Act

On July 4 the “One Big Beautiful Bill Act”  became law through the reconciliation process, requiring only a simple majority in both chambers to make changes to mandatory spending. Note this is separate and unrelated to the FY 2026 appropriations process and to the ongoing withholding of FY 2025 afterschool and summer funds by the Administration.

The Senate passed their version of the bill, a modified version of the House bill (HR 1) on July 1 with a 50-50 vote and Vice President Vance serving as tie breaker. Three Republican Senators voted against the bill, Senators Collins (R-Maine), Paul (R-Ky.) and Tillis (R-N.C.). The House was able to pass the Senate bill in a similar fashion (218-214) on July 3, with all Democrats and two Republicans voting against the legislation and the remaining Republican members voting in favor.

The final process leading to the bill’s passage included several negotiations that modified some of the language in areas relevant to afterschool and family supports. Below is a summary of some of the relevant provisions in the law affecting families with children:

Child Tax Credit: The legislation will provide a nonrefundable tax credit of up to $2,200 per child, and a refundable tax credit of up to $1,400 per child, both indexed to inflation. The new language requires that the taxpayer (or one of two taxpayers on a joint return) and the child have Social Security numbers.

Child and Dependent Care Tax Credit: Taxpayers making use of the CDCTC will be able to claim up to 50% (up from 35%) of their child care expenditures, depending on their adjusted gross income.

Employer provided child care tax credit (45F): Employers will be able to claim a credit for 40% rather than 25% of their eligible expenditures on child care investments up to a cap of $500,000 (or $600,000 for small businesses).

Qualified Elementary and Secondary Education Scholarships: Taxpayers will be able to exclude up to $1700 as a dollar-for-dollar credit for investments toward “qualified education or secondary educational expenses.” The allowable expenditures include: “expenses for supplementary items and services (including extended day programs) which are required or provided by a public, private, or religious school.” Education Week has an additional summary on some of the policy and its implications.

Medicaid: The bill creates federally mandated work requirements for the first time in Medicaid history for people between 19 and 64, including those with children over the age of 14 in their home. The bill also adds new paperwork requirements, restrictions on who can access Medicaid and what for, and changes some cost-sharing policies with states. The work requirements will go fully into effect by December 31, 2026, while some of the state cost-sharing provisions will increase in 2028. Estimates suggest up to 11.8 million adults and children could be at risk of losing access.

SNAP: The bill imposes new work requirements for families with children over age 14 in need of food assistance through the federal SNAP program. It would also require some states to pick up a share of the program's costs for the first time by 2028. Estimates show up to 3.3 million families with children are expected to lose $25 or more in food benefits each month, a substantial support for families. Both the Medicaid and SNAP provisions could mean fewer families will qualify directly for free and reduced-price school meals, impacting summer and afterschool meals, which are made available based on the percentage of free and reduced-price meal participation in a particular community.

With the passage of the bill, the Senate may now turn its focus to deciding to approve or ignore the recissions package passed by the House with a July 18 deadline.  Millions in public broadcasting and international aid funding that was appropriated by Congress and signed into law, will be rescinded if the bill passes. The House and Senate will now also be moving toward the annual FY 2026 appropriations process. See more about these processes in our blog.

For friends of afterschool, the annual appropriations process is usually the most critical decision-making Congress does each year in determining funding levels for the 21^st Century Community Learning Center Program, AmeriCorps, Community Schools, and other key programs[1]. The next step in the FY 2026 appropriations process is for the House and Senate Appropriations subcommittees and full committees to write and mark up their FY 2026 spending bills, including the Labor, Health and Human Services, and Education spending bill. The House has released its for markups; the Education spending bill is on the calendar for the week of July 21. These committees will determine the funding level for programs like 21^st CCLC and decide whether to create the new block grant that the White House would like. Now is an optimal time to reach out to your Senators and Representative to let them know the value of local afterschool and summer learning programs. Since the President’s ‘skinny’ budget proposal came out on May 2, more than 16,100 advocates sent more than 48,500 emails/calls to Congress in support of 21^st CCLC via 3to6.co/congress. 

Importantly, this year, the field is also facing a major emergency in the Trump Administration’s devastasting withholding of already appropriated 21^st CCLC funds from the last FY 25 appropriations process. All programs, parents, students, and other friends of the field can communicate with government officials at all levels of government about how harmful the loss, or even delay, of these funds is for the 1.4 million children directly impacted, and the staff, families, employers, schools and communities that will be harmed if these funds are not released.