Trump's 'big beautiful bill' could boost NC economy – or hurt GOP prospects in 2026
As President Donald Trump signs the massive keystone bill containing his legislative agenda, experts in North Carolina agree it’s too soon to say how the complex measure could affect the economy and the political climate in North Carolina.
HR1, titled the “One Big Beautiful Bill Act,” makes hundreds of changes to federal spending and tax laws. Polling shows the bill is unpopular with voters across the political spectrum. However, that could change if the measure results in significant economic growth, as Trump’s economic advisors predict it will.
NC State economist Mike Walden says most media coverage of the bill has focused on cuts to services. Missing, he says, has been coverage of the tax cuts for businesses and individuals. He says Trump’s advisors are banking on those tax cuts to produce enough growth to offset the cuts to spending.
“If they can get economic growth going up a percentage point, even two percentage points, that can be amazing in terms of business development, in terms of jobs,” Walden said. “There could be a big boost in our state economy if the expectations that the administration is putting on the results of this plan in the business sector, if they pay off.”
The cuts to federal spending on food assistance, Medicaid, education and health spending will likely leave the state on the hook for at least a billion dollars at a time when state lawmakers are already battling over shrinking revenues.
Walden says a booming economy could turn those state revenue numbers around, but added that economists remain divided on how much growth the bill will create. And tariffs are, still, the big wildcard. They’re supposed to begin July 9 unless they’re delayed again.
“I’ve talked [to] a lot of business groups. That’s the number one issue they talk about,” Walden said. “If the tariffs are imposed, that could wipe out any, in my opinion, any benefits in terms of economic growth from the bill that was just passed.”
Political fallout
Western Carolina political scientist Chris Cooper says it’s also too soon to know how the new law might affect the upcoming midterm elections.
Cooper says the bill is much broader and more complicated than either Republicans or Democrats are portraying it.
“There are going to be parts of your life that probably are better from this bill, parts of your life that are worse for this bill,” Cooper said, “and that’s going to differ based on how much money you make, where you live, what kind of person you are.”
Cooper says the federal spending cuts will leave state lawmakers “in a pickle” as they decide whether to make additional tax cuts at the state level – a key sticking point in the current budget impasse.
Republican legislative leaders are also likely to face tough decisions about how much state money they’re willing to spend to cover the federal cuts to safety net services like food assistance and Medicaid.
“They are really, truly caught between a rock and a hard place on this, and I’m going to be curious to see, obviously, what this looks like in terms of state legislation,” Cooper said.
He said some of the deepest cuts will be delayed beyond the 2026 midterms, while economic growth could happen more immediately. If that happens, Cooper said, “it’s going to be a boon to Republicans.”
“But obviously, Senator Thom Tillis was one of a few Republicans that said, ‘Hey, this is actually bad for the economy, it’s going to be bad for people’s lives, and it’s going to be bad for us, meaning the Republican Party, in the midterms,’” Cooper added.