USA Policy in Transition: What HR 1 Means for Energy, Welfare, and the U.S. Budget

In 2021, the United States made a generational investment in infrastructure, climate, and connectivity through the Infrastructure Investment and Jobs Act (IIJA). This bipartisan legislation reflected a belief in the power of public spending to modernize the nation—allocating $1.2 trillion to projects ranging from clean energy and broadband to transit and water systems. 

Just four years later, the newly passed One Big Beautiful Bill Act (HR 1) charts a very different course. 

HR 1 isn’t an expansion of those investments—it’s a deliberate rollback. It seeks to dismantle many of the signature programs from the Biden era, reshaping federal priorities around deficit reduction, fossil fuel development, individual responsibility, and state-based governance. The shift is dramatic, not just in dollars, but in direction. 

This article explores what HR 1 means for three foundational pillars of U.S. policy: energy, welfare, and the federal budget. 

Energy: From Green Acceleration to Traditional Expansion 

One of the most striking reversals in HR 1 is its treatment of energy and climate. The bill repeals or rescinds over $1 trillion in clean energy and environmental programs enacted under the Inflation Reduction Act, including: 

• Tax credits for EVs, solar, wind, and hydrogen 
• Grants for clean heavy-duty vehicles and school bus electrification 
• The Greenhouse Gas Reduction Fund 
• Port and industrial emissions programs 

In place of these initiatives, HR 1 mandates a revival of domestic oil, gas, and coal development. It requires offshore lease sales in the Gulf of Mexico and Alaska, accelerates federal permitting for fossil fuel infrastructure, and cuts environmental review requirements to speed up extraction projects. 

Where the IIJA supported the clean energy transition, HR 1 doubles down on energy independence through traditional means, with climate objectives taking a backseat to economic and national security concerns. 

Welfare: A Tightening of Access and Oversight 

HR 1 delivers a structural transformation of the U.S. welfare system, particularly Medicaid and SNAP (food assistance). It introduces stricter eligibility requirements, cost-sharing mandates for states, and administrative limits that signal a significant reduction in federal entitlement spending. 

• Key changes include: 
• $2.7 trillion in Medicaid savings over 10 years 
• Enhanced work requirements and eligibility verification 
• State penalties for high payment error rates 
• A reduction of federal administrative cost-sharing from 50% to 25% 

In SNAP, the bill limits work requirement waivers to counties with unemployment rates above 10% (up from 8%), restricts utility deductions, and caps benefit formulas tied to the Thrifty Food Plan. These reforms are estimated to save $400 billion over a decade. 

The IIJA was silent on social programs. HR 1 puts welfare reform front and center—redefining assistance as conditional, limited, and state-managed. 

The Federal Budget: From Spending to Surplus Goals 

HR 1 is framed as a fiscal correction. In total, it’s projected to reduce the federal deficit by more than $6.7 trillion over 10 years. This is achieved through: 

• Repealing IRA energy provisions (~$1.1 trillion) 
• Restructuring Medicaid and SNAP (~$3.1 trillion in combined savings) 
• Restricting IRS funding and federal agency expansion 
• Repealing multiple grant programs and loan forgiveness schemes 

Yet, the bill also extends and expands tax relief: 

• Trump-era tax cuts are made permanent (~$3.5 trillion cost) 
• New tax exemptions are added for tips and overtime pay 
• Ideological incentives like MAGA Accounts and expanded HSAs reinforce cultural signaling alongside economic relief 

HR 1 reduces spending aggressively while offering targeted tax relief. 

The underlying fiscal approach is clear: shrink the federal role, lower taxes, and return policy control to individuals and states. 

Beyond the Budget: Immigration and Defense 

HR 1 also asserts a strong position on national security and immigration—areas the IIJA deliberately avoided. 

The bill allocates significant funding toward: 

• Border wall construction and tech deployment 
• ICE hiring, operations, and deportation logistics 
• New immigration processing fees 
• Denial of federal benefits to undocumented immigrants 

It also boosts military funding for cybersecurity, Indo-Pacific strategy, and modernization of air and naval capabilities. 

The result is a policy package that not only reduces spending but also reinforces sovereignty, law enforcement, and defense readiness as core federal priorities. 

What It All Means 

The One Big Beautiful Bill Act is more than a fiscal plan—it’s a philosophical realignment. It challenges the post-2020 consensus around federal investment and replaces it with a vision of limited government, energy realism, and work-based welfare. 

Where the IIJA sought to build the future, HR 1 aims to redefine the role of government. 

For businesses, policymakers, and civic leaders, the message is clear: priorities are shifting, and strategies must adapt. Whether it’s in energy, infrastructure, healthcare, or taxation, the framework for federal engagement has changed—and likely won’t swing back quickly. 

Let’s Talk About What’s Next 

As the implications of HR 1 unfold, one key question remains: 

What will this mean for implementation on the ground? 

From permitting pipelines to managing Medicaid, from broadband rollouts to border enforcement—the real test lies in execution, adaptation, and local impact. 

We’re in a period of policy transition. The outcome will depend not just on legislation, but on how organizations and communities respond.

Wed Jul 9, 2025