I did a similar thing. I'm not sure how I got it I think I went really slow with the larger bit and used a lot of cutting compound. Although with mine I had not yet welded the bumper together, so I just had to deal with a piece of 1" flat stock. I don't think I went all the way up to 1" in one shot (or at all).
You might also try a die grinder, although my experience using those to ream holes by hand is that you get a lot of chatter and the end result is not necessarily a round hole.
I think an annular cutter is something like a hole saw--it cuts around the outside diameter of the circle, but not through the middle.
did you think about using a smaller shackle? Good luck. I know this situation sucks.
edit. I've never used one but something like one of these reamers might work, specifically the "construction reamer". They are not cheap, though. Maybe you can find a machine shop with one and they can do it on your truck.
McMaster-Carr