What’s in Trump’s big bill that Congress passed
WASHINGTON—Republicans muscled President Donald Trump’s tax and spending cut bill through the House on Thursday, the final step necessary to get the bill to his desk by the GOP’s self-imposed deadline of July 4th.
At nearly 900 pages, the legislation is a sprawling collection of tax breaks, spending cuts and other Republican priorities, including new money for national defense and deportations.
Democrats united against the legislation, but were powerless to stop it as long as Republicans stayed united. The Senate passed the bill, with Vice President JD Vance casting the tiebreaking vote. The House passed an earlier iteration of the bill in May with just one vote to spare. It passed the final version 218-214.
Here’s the latest on what’s in the bill and when some of its provisions go into effect.
Republicans say the bill is crucial because there would be a massive tax increase after December when tax breaks from Trump’s first term expire. The legislation contains about $4.5 trillion in tax cuts.
The existing tax rates and brackets would become permanent under the bill, solidifying the tax cuts approved in Trump’s first term.
Deductions
It temporarily would add new tax deductions on tip, overtime and auto loans. There’s also a $6,000 deduction for older adults who earn no more than $75,000 a year, a nod to his pledge to end taxes on Social Security benefits.
It would boost the $2,000 child tax credit to $2,200. Millions of families at lower income levels would not get the full credit.
A cap on state and local deductions, called SALT, would quadruple to $40,000 for five years. It’s a provision important to New York and other high tax states, though the House wanted it to last for 10 years.
There are scores of business-related tax cuts, including allowing businesses to immediately write off 100 percent of the cost of equipment and research. Proponents say this will boost economic growth.
The wealthiest households would see a $12,000 increase from the legislation, and the bill would cost the poorest people $1,600 a year, mainly due to reductions in Medicaid and food aid, according to the nonpartisan Congressional Budget Office analysis of the House’s version.
The bill would provide some $350 billion for Trump’s border and national security agenda, including for the US-Mexico border wall and for 100,000 migrant detention facility beds, as he aims to fulfill his promise of the largest mass deportation operation in US history.
Deportation goals
Money would go for hiring 10,000 new Immigration and Customs Enforcement officers, with $10,000 signing bonuses and a surge of Border Patrol officers, as well. The goal is to deport some 1 million people per year.
To help pay for it, immigrants would face various new fees, including when seeking asylum protections.
For the Pentagon, the bill would provide billions for ship building, munitions systems, and quality of life measures for servicemen and women, as well as $25 billion for the development of the Golden Dome missile defense system. The Defense Department would have $1 billion for border security.
To help partly offset the lost tax revenue and new spending, Republicans aim to cut back on Medicaid and food assistance for people below the poverty line.
Republicans argue they are trying to rightsize the safety net programs for the population they were initially designed to serve, mainly pregnant women, persons with disabilities and children, and root out what they describe as waste, fraud and abuse.
Work requirements
The package includes new 80-hour-a-month work requirements for many adults receiving Medicaid and food stamps, including older people up to age 65. Parents of children 14 and older would have to meet the program’s work requirements.
There’s also a proposed new $35 copayment that can be charged to patients using Medicaid services.
More than 71 million people rely on Medicaid, which expanded under Obama’s Affordable Care Act, and 40 million use the Supplemental Nutrition Assistance Program. Most already work, according to analysts.
The Congressional Budget Office estimates that 11.8 million more Americans would become uninsured by 2034 if the bill became law and 3 million more would not qualify for food stamps, also known as SNAP benefits.
Republicans are looking to have states pick up some of the cost for SNAP benefits. Currently, the federal government funds all benefit costs. Under the bill, states beginning in 2028 will be required to contribute a set percentage of those costs if their payment error rate exceeds 6 percent. Payment errors include both underpayments and overpayments.
Tax breaks
But the Senate bill temporarily delays the start date of that cost-sharing for states with the highest SNAP error rates.
Republicans are proposing to dramatically roll back tax breaks designed to boost clean energy projects fueled by renewable sources such as energy and wind. The tax breaks were a central component of President Joe Biden’s 2022 landmark bill focused on addressing climate change and lowering health care costs.
Democratic Oregon Sen. Ron Wyden went so far as to call the GOP provisions a “death sentence for America’s wind and solar industries and an inevitable hike in utility bills.”
A tax break for people who buy new or used electric vehicles would expire on Sept. 30 of this year, instead of at the end of 2032 under current law.
Meanwhile, a tax credit for the production of critical materials will be expanded to include metallurgical coal used in steelmaking.
A number of extra provisions reflect other GOP priorities.
The bill creates a new children’s savings program, called Trump Accounts, with a potential $1,000 deposit from the Treasury.
