What’s in the latest version of Trump’s big bill that passed the Senate
Republicans are getting closer to finalizing their tax and spending cut bill, with a potential House vote on Wednesday. The 887-page legislation includes tax breaks, spending cuts, increased national defense funding, and deportation measures. President Donald Trump urged Republicans to pass the bill promptly. Democrats oppose the legislation but lack the power to stop it if Republicans remain united. The Senate passed the bill with Vice President JD Vance’s tie-breaking vote, while the House previously approved an earlier version.
Tax cuts are the main focus, with Republicans claiming the bill is essential to prevent a tax increase after current breaks expire in December. The legislation includes approximately $4.5 trillion in tax cuts, making existing tax rates permanent. New temporary tax breaks include eliminating taxes on tips and overtime pay, deductions for some auto loan interest payments, a $6,000 deduction for older adults earning less than $75,000 annually, and an increase in the child tax credit to $2,200. Some lower-income families won’t receive the full credit. A cap on state and local tax (SALT) deductions would be raised to $40,000 for five years, which is important for high-tax states like New York. Numerous business-related tax cuts are included, such as allowing immediate write-offs for equipment and research costs. The nonpartisan Congressional Budget Office (CBO) analysis of the House’s version indicates the wealthiest households would see a $12,000 increase, the poorest would lose $1,600, and middle-income taxpayers would receive $500 to $1,500 in tax breaks.
The bill allocates $350 billion for Trump’s border and national security plans, including $46 billion for the US–Mexico border wall and $45 billion for detention facilities. Funding is provided for 10,000 new Immigration and Customs Enforcement (ICE) officers, along with bonuses and additional Border Patrol officers, aiming to deport approximately 1 million people per year. The Department of Homeland Security would receive $10 billion for grants to states aiding in immigration enforcement. Immigrants would face new fees, including for asylum applications. The Pentagon would receive billions for shipbuilding, munitions, and quality-of-life improvements for service members, $25 billion for missile defense, and $1 billion for border security.
To offset costs, Republicans propose cuts to Medicaid and food assistance. They claim these cuts are meant to “rightsize” safety net programs, focusing on pregnant women, the disabled, and children, while eliminating “waste, fraud, and abuse.” The package introduces 80-hour-a-month work requirements for many Medicaid and food stamp recipients, including those up to age 65. Parents of children 14 or older would also face work requirements. A $35 co-payment could be charged for Medicaid services. Over 71 million people rely on Medicaid and 40 million use the Supplemental Nutrition Assistance Program (SNAP), with most already working according to analysts. The CBO estimates 11.8 million more Americans would lose health insurance and 3 million would lose food stamps by 2034. States would share SNAP costs starting in 2028 if their payment error rate exceeds six percent, but the Senate bill delays this for states with the highest error rates, like Alaska.
Republicans aim to reduce clean energy tax breaks, impacting renewable energy projects. This has drawn criticism, with some calling it harmful to the wind and solar industries. Tax breaks for electric vehicles would expire sooner, while credits for critical materials production are expanded to include metallurgical coal. Other provisions include “Trump Accounts” with a potential $1,000 Treasury deposit, $40 million for the National Garden of American Heroes, an excise tax on university endowments, the elimination of a tax on gun silencers, restrictions on funding for Planned Parenthood, $88 million for a pandemic response committee, and expansion of the Radiation Exposure Compensation Act. Funding is also allocated for the Artemis moon mission and Mars exploration, and the debt limit would be raised by $5 trillion.
Last-minute changes included removing a proposed moratorium on state regulation of artificial intelligence and increasing funding for rural hospitals to $50 billion over five years. A tax on wind and solar projects with Chinese components was also removed. The CBO projects the bill would increase deficits by nearly $3.3 trillion over 10 years. However, Senate Republicans argue that by not counting existing tax breaks as a new cost, the bill would reduce deficits by almost half a trillion dollars. Democrats and some nonpartisan groups criticize this as an accounting gimmick.
