President Donald Trump’s sweeping tax-cut and spending package cleared its final congressional hurdle on Thursday, as the Republican-led House of Representatives narrowly passed the bill, paving the way for the president to sign it into law.
Dubbed the “Big Beautiful Bill,” the $4 trillion One Big Beautiful Bill Act permanently extends most 2017 tax cuts, reshapes social safety nets, and redirects federal priorities toward border security, fossil fuels, and defense—while slashing benefits for millions of low-income Americans.
Key provisions include a higher child tax credit—$2,200 per child starting in 2025, temporarily raised to $2,500 through 2028—and new deductions: up to $25,000 for tip income, $12,500 for overtime, and $10,000 for U.S.-assembled car loan interest.
Seniors get a $4,000 deduction, phased out at higher incomes.
But those deductions may mean little to low earners, who often lack enough taxable income to benefit. “You need taxable income to benefit from deductions,” said Garrett Watson of the Tax Foundation.
Nearly 37% of tipped workers paid no income tax in 2022, Yale’s Budget Lab reported. In contrast, wealthier households stand to gain more due to higher tax brackets and itemized deductions.
On the spending side, Medicaid faces major cuts, with work requirements and stricter eligibility checks expected to strip coverage from up to 17 million Americans over the next decade. SNAP rules now demand more from recipients aged 18–64, shifting costs to states and reducing benefits in high-error regions.
Immigration and border enforcement receive a historic funding surge: $46.5 billion for wall construction, $45 billion for detention capacity, and a path to $100 billion in ICE funding by 2029. Non-citizens will face a 1% remittance tax and $100 asylum application fees.
Energy policy shifts sharply, ending nearly all clean energy credits from the Inflation Reduction Act, while boosting oil and gas incentives. Meanwhile, the bill raises the debt ceiling by $5 trillion and adds funding for rural hospitals, NASA, and the Coast Guard. It also removes suppressors from the National Firearms Act, ending a $200 tax.
Despite its scope, the bill passed with minimal Democratic support. Polls show 49% of Americans oppose the bill, while only 29% support it. The Committee for a Responsible Federal Budget estimates it could add up to $3.4 trillion to the deficit.
