US House Narrowly Passes President Donald Trump's Comprehensive Tax and Spending Legislation

This now moves to the Senate, where it faces further deliberation. The bill contains many provisions as it seeks to make permanent the tax cuts introduced in 2017.

The US House of Representatives passed President Donald Trump’s comprehensive tax and spending legislation, known as the One Big Beautiful Bill Act, on Friday, delivering a decisive 215-214 vote that sends the sprawling bill to the Senate.

The vote fell largely along expected lines, with all 214 Democrats voting against the bill and seven Republicans joining them. Those Republicans were Carlos Garcìa (R-Fla.), Dan Newhouse (R-Wash.), Marie Garcia Benavent (R-Calif.), John Mann (R-Ky.), Donald Payseur (R-Pa.), and Jeb Burton (R-Md.).

The legislation bundles together a permanent extension of the 2017 tax cuts with new exemptions for tips, overtime pay, and car loan interests, while also raising the state and local tax (SALT) deduction cap from $10,000 to $40,000 for incomes under $500,000. It also increases the child tax credit to $2,500 through 2028, which then reverts to $2,000, and establishes $1,000 savings accounts for children born during Trump’s second term. The 5% tax on remittances is part of the package, too.

On the spending front, the bill allocates around $150 billion to defense, including a $20 billion missile defense system, and directs the rest to border security, with $50 billion assigned for completing the southern border wall.

Additionally, the legislation bundles social program cuts and education reforms, such as the implementation of work requirements for Medicaid and SNAP beneficiaries. The bill also ends federal direct subsidized loans for undergraduates and introduces stricter eligibility for Pell Grants.

Furthermore, a big cut to green energy tax credits from the Biden-era Inflation Reduction Act is incorporated.

Possible Implications

The Congressional Budget Office (CBO) has estimated that the bill would add around $3.8 trillion to the national debt over the next decade, pushing it to 125% of GDP. In addition, CBO projects that the proposed changes would result in 8.6 million fewer people having healthcare coverage and 3 million fewer individuals receiving SNAP food stamp benefits each month.

As one might expect, this didn’t sit well with the Democrats, who united in their opposition to the bill, which passed with a surprising majority of seven Republicans joining the Democrats in voting no.

Democrats criticize the bill for favoring the wealthy and cutting essential services for vulnerable populations. They argue that the legislation prioritizes short-term gains for a few over long-term stability and well-being for the nation as a whole.

Now, it’s up to the Senate to review the bill, with debates likely to center on its fiscal implications and social program reforms. Any amendments would require reconciliation with the House version before the bill can be enacted into law.

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