On July 3rd, 2025, the House passed a sweeping spending and tax bill that includes key components of President Donald J. Trump’s second-term agenda, just ahead of the July 4 deadline. The bill, nicknamed the “Big, Beautiful Bill”, was signed into law by President Trump on Friday afternoon.
The House approved the legislation in a narrow 218–214 vote, following the Senate’s 51–50 passage earlier in the week, with Vice President JD Vance casting the tie-breaking vote.
At the core of the bill is a permanent extension of major provisions from Trump’s 2017 Tax Cuts and Jobs Act, originally set to expire at the end of the year. The legislation locks in those tax cuts while significantly boosting funding for border security, defense, and energy development.
Key Provisions in the 887-Page Bill:
Taxes and Income
- Permanent extension of 2017 tax cuts for individuals and businesses.
- Increased standard deduction remains in place, preventing its scheduled expiration.
- “No tax on tips” provision: tipped workers can deduct up to $25,000 in tip income from federal taxes (still subject to state/local and payroll taxes).
- Overtime deduction: allows limited deduction for overtime earnings until 2028.
- State and Local Tax (SALT) cap raised from $10,000 to $40,000 for five years, before reverting.
- Child Tax Credit permanently raised to $2,200 per child (was set to drop to $1,000 in 2026).
Border Security and Immigration
- $46.5 billion allocated to complete the southern border wall and related infrastructure.
- $45 billion to expand immigration detention capacity.
- $30 billion for hiring and training ICE agents and border enforcement staff.
- New $100 application fee for asylum seekers, after a proposed $1,000 fee was ruled out by the Senate parliamentarian.
Healthcare and Medicaid
- Work requirements imposed on some able-bodied Medicaid recipients.
- Frequent eligibility checks mandated.
- Estimated 11.8 million Americans could lose Medicaid coverage over the next decade, according to the Congressional Budget Office (CBO).
- Cuts to provider taxes that help states fund Medicaid, reduced gradually from 6% to 3.5% by 2032.
- $50 billion Rural Hospital Stabilization Fund established in response to concerns about Medicaid cuts’ impact on rural healthcare.
Nutrition Assistance (SNAP)
- Cost-sharing introduced for some states: states with an error rate above 6% will cover 5–15% of benefit costs starting in 2028.
- Work requirement age increased: able-bodied adults without dependents must work to qualify until age 64 (up from 54).
- Flexibility for Alaska and Hawaii, which may be granted waivers if they demonstrate “good faith” compliance efforts.
Green Energy and Climate Programs
- Termination of most tax credits from the 2022 Inflation Reduction Act:
- Eliminates credits for new/used EVs, EV chargers, and energy-efficient home upgrades.
- Ends Greenhouse Gas Reduction Fund, halting new financing for community-based clean energy projects (existing contracts remain intact).
Debt Ceiling and Fiscal Impact
- Debt ceiling raised by $5 trillion, surpassing the $4 trillion increase proposed in earlier drafts.
- CBO estimates the bill would add $3.4 trillion to the national deficit over the next 10 years and result in millions losing health coverage—projections disputed by Republicans and the Trump administration.
- $1.5 trillion in spending cuts primarily target healthcare and social safety net programs.
Other Notable Provisions
- Trump Accounts: savings and investment accounts established for every American newborn.
- Elimination of federal funds for states providing Medicaid services to undocumented immigrants or gender transition treatments (provisions were struck down by the Senate parliamentarian).
- Military modernization and defense spending, including continued funding of the Golden Dome missile defense system.
The Senate used the budget reconciliation process to pass the bill with a simple majority, bypassing the standard 60-vote threshold. This limited the scope of policy changes but allowed Republicans to advance the president’s priorities without Democratic support.