Complete guide to the 'One Big, Beautiful Bill': What's included in Trump's mega-bill
Congress passed the legislation and it contains the president's top priorities, including taxes, border security, Medicaid, energy and more.
Johnson in the House/ Alex Wroblewski.
Donald Trump has his mega-bill ready to sign. After months of internal wrangling, public insults and even resignations, Congress passed the "One Big, Beautiful Bill." Already with Senate approval, Mike Johnson took it upon himself to line up nearly every House Republican to land the text directly on the president's desk.
Before catching a flight to Iowa, Trump thanked congressional leaders for advancing his first major legislation of this second term: "This is going to be something that's amazing... and I want to congratulate Mike Johnson, Tom Emmer, Steve Scalise and everybody else. They worked so hard... on the Senate side, I thought John Thune did a fantastic job."
"We've had a great record of success. My first term was very, very successful — we had the greatest economy in the history of our country. I think we're going to blow it away this term," he added.
In the Senate, the vote ended in a 50-50 tie (with three Republicans voting against), which caused Vice President JD Vance to break the tie in favor of the bill. The scenario was different in the House, where, after a marathon night for the bill to enter the floor, it was approved with 218 votes in favor and 212 against. Only two Republican congressmen opposed it.
Regarding the long-awaited signing, Trump informed reporters that the event will take place on Friday at 5 p.m. ET. Although the legislation is 887 pages long, these are the main points.
Taxes
- It renews many of the provisions of the Tax Cuts and Jobs Act (TCJA), signed by Trump in 2017. Without this renewal, it is estimated that there would be a $4 trillion increase in taxes over the next decade.
- The corporate tax remains at 21% (before 2017, it was 35%)
- The individual income tax rate reduction of the TCJA is maintained, preventing levies from going up.
- The 20% deduction on income from pass-through style businesses, such as LLCs and family businesses, is continued.
- Increases the tax credit for each child under the age of 17, from $2,000 to $2,200, on a permanent basis.
- Increases the standard deduction to $15,750 for singles and $31,500 for married couples. It is estimated that more than 90% of taxpayers use this deduction at tax time.
- Exempt tips and overtime from federal income tax. This applies only to those earning less than $150,000 per year, are capped at $25,000, and will be in effect through the end of 2028.
- A deduction of up to $10,000 per year in interest on loans to purchase U.S.-made vehicles. Will also expire after 2028.
- Increases the limit for the state and local tax (SALT) deduction from $10,000 per year to $40,000. In 2029, it will go back down to 10,000.
- Trump Accounts: creates a private investment account for each newborn child with $1,000. The family can invest every year in a tax-advantaged account to help the money grow.
- The Opportunity Zones, present in the 2017 TCJA, are renewed and expanded.
- Increases "Expensing" (an immediate deduction of certain business costs) for domestically produced machinery and technology.
Medicaid
- New work requirements. Applies to adults between the ages of 19 and 55, who are able-bodied and without dependents (i.e., no children or elderly caretakers). To continue receiving Medicaid benefits, they must complete at least 20 hours per week of formal work, volunteering, study, or job training.
- The use of provider taxes is limited.
- Medicaid funds are prohibited from being used for abortions or gender transition procedures, with precise clinical exceptions.
- More frequent eligibility reviews, such as income, residency and immigration status, among other things. They will be conducted at least every six months.
- Stricter asset filters for receiving Medicaid benefits. For example, those with estates worth more than $1 million could be excluded.
- Limits on the profit margin of middlemen (pharmacy benefit managers).
Border security
- $16 billion is earmarked to increase border security.
- Among other things, that money is distributed as follows: construction of the border wall plus other physical barriers, the addition of 2,000 new agents for Border Patrol, improvements in agent training, investment to improve surveillance systems, budget to expedite initial asylum and deportation hearings, more funds
Defense
- The legislation increases the defense budget by more than 4%, bringing it to $923 billion by FY 2026.
- Funding is increased for the Indo-Pacific Deterrence Initiative (IPDI).
- Additional funding for nuclear stockpile upgrade.
- Expansion of the defense artificial intelligence program.
- Development of hypersonic systems and anti-missile defense.
- Wage increase of 5.2% for members of the Armed Forces.
- Expansion of medical and housing benefits for military families
- Includes untied military aid to Israel.
- Assistance to Ukraine is maintained but with more transparency conditions.
Expansion of school choice
- A new federal tax credit is created, allowing families to deduct up to $10,000 annually on: private school tuition, books, tutoring and after-school programs. It is a refundable type of credit.
- Expansion of 529 savings accounts. While historically used for college expenses, they can cover private elementary and secondary schools, homeschooling, and programs such as STEM.
- Federal portable funds. Allows money to go directly to the student instead of the school, allowing families to use that money to send their child to a charter or private school.
- Education reform seeks to empower families to the detriment of unions.
Supplemental Nutrition Assistance Program (SNAP) reform
- Commonly known as food stamps, it is the nation's largest food assistance program, providing monthly benefits to low-income households. This requirement is expanded for adults up to age 64, where previously the age limit was 49.
- States are required to bear a portion of the program's costs, thus incentivizing them to administer SNAP in a more "efficient and effective" manner. For example, beginning in FY 2028, they will be required to assume up to 15% of the program's benefit costs. In turn, they will cover 75% of the administrative cost, up from 50% previously.
- Expansion of work requirements to (at least) 20 hours per week or participation in employment programs. Volunteerism and technical education are included as valid options, but with stricter verification.
- More frequent eligibility verifications for beneficiaries.
- Stricter restrictions for state waivers, such as number and prior years' accruals.
Energy
- Phase-out of renewable energy tax credits that were implemented with the Inflation Reduction Act (IRA) of 2022: solar or wind installations, electric vehicles (EVs), and charging stations. They will be phased out between December 31, 2025, and December 31, 2027.
- Derogation of taxes and penalties created by the IRA against methane, which directly impacted natural gas.
- Approval of permits for oil and gas exploration, extraction, transportation and refining projects is accelerated.
- Expenditure items earmarked for the development of ports and liquefied natural gas (LNG) export terminals are added.
- The legislation clarifies that the country's energy security depends on "steady and reliable" sources of energy.
- Incentives for the expansion of nuclear power.
Spending cuts
According to the latest estimates from the Congressional Budget Office (CBO), an agency criticized by the White House, the bill would reduce spending by approximately $920 billion over 10 years. However, it would not lower the public debt, but would slow its growth. It estimates it would add $3.3 - $4.1 trillion to the public deficit over the next 10 years.
For the Senate Budget Committee, this would lower the debt-to-GDP ratio by 1.5 to 2 percentage points over 10 years, depending on the level of economic growth.
LATEST
