by Washington (AP) Republicans pushed a tax and spending cut measure through Congress this week, and President Donald Trump signed it into law on Friday by his own self-imposed deadline of July 4.
The proposal, which is roughly 900 pages long, is a comprehensive set of tax incentives, expenditure reductions, and other Republican goals, such as additional funding for deportations and national security.
Democrats banded together to oppose the law, but as long as Republicans remained unified, they were unable to stop it. Vice President JD Vance cast the tiebreaking vote, and the Senate approved the bill on Tuesday. An earlier version of the measure was passed by the House in May with a single vote remaining. On Thursday, 218–214, it approved the final version.
Here is the most recent information on the bill’s contents and the dates on which some of its provisions would take effect.
GOP bill includes reductions for businesses and new tax breaks
Republicans claim that the plan is essential because, once tax incentives from Trump’s first term expire in December, there would be a significant tax increase. Approximately $4.5 trillion in tax savings are included in the proposal.
The plan would firmly establish the tax cuts that were adopted during Trump’s first term by making the current tax rates and brackets permanent.
For a limited time, it would introduce additional tax deductions for auto loans, overtime, and tips. In keeping with his promise to eliminate taxes on Social Security benefits, there is also a $6,000 deduction for older persons who make no more than $75,000 year.
It would increase the child tax credit from $2,000 to $2,200. Millions of lower-income households would not receive the entire amount.
SALT, a five-year cap on state and local deductions, would treble to $40,000. Despite the House’s desire for a ten-year extension, this measure is crucial for high-tax states like New York.
Numerous tax breaks for enterprises are available, such as the ability to instantly deduct 100% of the cost of research and equipment. Advocates claim that this will accelerate economic expansion.
According to the impartial Congressional Budget Office estimate of the House version, the law would cost the poorest persons $1,600 year, primarily because of cuts to food aid and Medicaid, while the wealthiest households would enjoy an increase of $12,000.
GOP bill funds the border wall, deportations and a missile shield
In order to carry out his pledge to launch the biggest mass deportation operation in American history, the plan would allocate around $350 billion for Trump’s border and national security agenda, which includes building a wall along the U.S.-Mexico border and providing 100,000 beds in migrant detention facilities.
Ten thousand new Immigration and Customs Enforcement officers would be hired, along with a surge of Border Patrol officers and signing incentives of $10,000. Deporting almost a million people annually is the aim.
Immigrants would be subject to a number of additional levies, including when applying for asylum protections, to help cover the cost.
The bill would give the Pentagon $25 billion to develop the Golden Dome missile defense system and billions for shipbuilding, weapons systems, and quality of life initiatives for service members. For border protection, the Defense Department would receive $1 billion.
Medicaid, SNAP face deep cuts to fund bill s tax breaks and spending
Republicans want to reduce Medicaid and food assistance for those below the poverty line in order to partially offset the extra spending and lost tax revenue.
Republicans claim they are attempting to eliminate what they characterize as waste, fraud, and abuse while also resizing the safety net programs to better serve the demographics they were originally intended to assist, primarily children, the disabled, and pregnant women.
The package imposes additional labor requirements of 80 hours per month on many adults, including those over 65, who get food stamps and Medicaid. The job requirements of the program would need to be fulfilled by parents of children aged 14 and up.
Additionally, individuals who use Medicaid services may be assessed a new $35 co-payment.
40 million individuals use the Supplemental Nutrition Assistance Program, while over 71 million people depend on Medicaid, which was increased under Obama’s Affordable Care Act. Analysts say most already function.
If the measure were to become law, the Congressional Budget Office projects that 3 million more Americans would not be eligible for food stamps, generally known as SNAP benefits, and 11.8 million more Americans would be uninsured by 2034.
Republicans are trying to get states to pay a portion of the SNAP costs. All benefit costs are currently covered by the federal government. According to the measure, states that have a payment mistake rate more than 6% starting in 2028 will have to pay a certain amount of those expenses. Both overpayments and underpayments are examples of payment errors.
However, for states with the highest SNAP mistake rates, the Senate plan temporarily postpones the start date of such cost-sharing. According to data from the Department of Agriculture, Alaska has the highest mistake rate in the country, at around 25%. The exception had been lobbied sought by Alaska Senator Lisa Murkowski, a Republican. Her support was crucial to the bill’s passage in the Senate.
The big beautiful bill slashes clean energy tax credits
Republicans are attempting to significantly reduce tax incentives intended to support clean energy projects powered by wind and other renewable energy sources. President Joe Biden’s historic 2022 bill, which addressed climate change and reduced health care costs, included the tax breaks as a key element.
Senator Ron Wyden, a Democrat from Oregon, even went so far as to say that the GOP’s measures will kill America’s solar and wind sectors and inevitably result in higher energy costs.
Instead of ending at the end of 2032 as is currently the case, a tax discount for those who purchase new or used electric vehicles will terminate on September 30 of this year.
In the meantime, metallurgical coal used to make steel will be included in a tax credit for the production of vital commodities.
The bill creates Trump Accounts and funds a national hero garden
Other GOP priorities are reflected in several more sections.
The law establishes Trump Accounts, a new children’s savings program that might receive a $1,000 Treasury deposit.
In order to create Trump’s long-desired National Garden of American Heroes, the Senate contributed $40 million.
Both university endowments and remittances—the transfers of funds from Americans to foreign countries—are subject to new excise taxes. One percent of the transfer is taxed.
The $200 tax on short-barreled rifles, shotguns, and gun silencers was removed.
One clause prohibits Medicaid payments to family planning organizations that provide abortions, such as Planned Parenthood, for a period of one year.
For those affected by nuclear development and testing, another component extends the Radiation Exposure Compensation Act, a tenaciously fought measure by Missouri GOP Senator Josh Hawley.
The Artemis moon mission and Mars exploration would receive billions, and a pandemic response accountability committee would receive $88 million.
Furthermore, a clause would raise the country’s debt ceiling by $5 trillion to permit further borrowing to settle outstanding debts.
State AI regulations cut from bill after a GOP uproar
A plan to discourage states from regulating artificial intelligence was decisively rejected by the Senate. With a decisive 99-1 vote, the Senate agreed to lift the ban, as requested by Republican governors nationwide.
At the last minute, a clause was added that will give rural hospitals $10 billion a year for five years, or $50 billion overall. In order to appease recalcitrant Republican senators and a group of House Republicans who were concerned that lower Medicaid provider taxes would negatively impact rural hospitals, the Senate bill’s initial funding of $25 billion for the program was increased.
A new levy on wind and solar projects that use a specific amount of Chinese components was also removed from the altered law.
Final price tag: GOP bill could add $3.3 trillion to deficit
In total, the bill would raise federal deficits by almost $3.3 trillion between 2025 and 2034, according to the Congressional Budget Office.
Depending on how the math is done, it may or may not.
Since the present tax breaks are already part of the law, Senate Republicans are putting forth the novel idea of not recognizing them as new expenses. The chairman of the Senate Budget Committee has the power to establish the starting point for the preferred strategy, according to Republican senators.
According to the CBO, the bill would cut deficits by over half a trillion dollars over the next ten years under the alternative Senate GOP position.
Democrats claim that the full costs of the tax incentives are hidden by this magic math. In that sense, several nonpartisan organizations that are concerned about the nation’s financial future are supporting Democrats. Senate Republicans were using an accounting trick that would have even Enron officials blush, according to the Committee for a Responsible Federal Budget.
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