Top Qs
Timeline
Chat
Perspective

One Big Beautiful Bill Act

2025 legislation in the United States From Wikipedia, the free encyclopedia

One Big Beautiful Bill Act
Remove ads

The One Big Beautiful Bill Act (acronyms OBBBA; OBBB; BBB), or the Big Beautiful Bill (P.L. 119-21), is a U.S. federal statute passed by the 119th United States Congress containing tax and spending policies that form the core of President Donald Trump's second-term agenda. The bill was signed into law by President Trump on July 4, 2025.[1][2] Although the law is popularly referred to as the One Big Beautiful Bill Act, this official short title was removed from the bill during the Senate amendment process, and therefore the law officially has no short title.[3]

Quick Facts Long title, Acronyms (colloquial) ...

The OBBBA contains hundreds of provisions. It permanently extends the individual tax rates Trump signed into law in 2017, which were set to expire at the end of 2025. It raises the cap on the state and local tax deduction to $40,000 for taxpayers making less than $500,000, with the cap reverting to $10,000 after five years. The OBBBA includes several tax deductions for tips, overtime pay, auto loans, and creates Trump Accounts, allowing parents to create tax-deferred accounts for the benefit of their children, all set to expire in 2028. It includes a permanent $200 increase in the child tax credit, a 1% tax on remittances, and a tax hike on investment income from college endowments. In addition, it phases out some clean energy tax credits that were included in the Biden-era Inflation Reduction Act, and promotes fossil fuels over renewable energy. It increases a tax credit for advanced semiconductor manufacturing and repeals a tax on silencers.[4] It raises the debt ceiling by $5 trillion. It makes a significant 12% cut to Medicaid spending.[5] The OBBBA expands work requirements for SNAP benefits (formerly called "food stamps") recipients and makes states responsible for some costs relating to the food assistance program. The OBBBA includes $150 billion in new defense spending and another $150 billion for border enforcement and deportations. The law increases the funding for Immigration and Customs Enforcement (ICE) from $10 billion to more than $100 billion by 2029, making it the single most funded law enforcement agency in the federal government and more well funded than most countries' militaries.

The Congressional Budget Office (CBO) estimates the law will increase the budget deficit by $2.8 trillion by 2034 and cause 10.9 million Americans to lose health insurance coverage. Several think tanks, experts, and opponents criticized the bill over its regressive tax structure, described many of its policies as gimmicks, and argued the bill would create the largest upward transfer of wealth from the poor to the rich in American history, exacerbating inequality among the American population. It has also drawn controversy for rolling back clean energy incentives and increasing funding for immigration enforcement and deportations. According to multiple polls, a majority of Americans opposed the bill.

Remove ads

Background

Summarize
Perspective
Thumb
President Trump signing the One Big Beautiful Bill Act into law on the White House South Lawn on July 4, 2025

Following the 2024 United States elections, in which the Republican Party retained the House of Representatives and won the Senate, Republicans began negotiations on passing then-president-elect Donald Trump's domestic policies. In a meeting with Senate Republicans in December 2024, Senate majority leader John Thune outlined an approach involving initial legislation on border security, energy production, and the military while reserving tax policy.[6] Trump, in contrast, advocated for a singular bill to resolve an impending lapse in tax cuts implemented in the Tax Cuts and Jobs Act in 2017. However, this strategy faced risks from defecting members.[7]

In January 2025, Republicans met in Fort Lesley J. McNair. At the meeting, Speaker of the House Mike Johnson stated that Trump sought "one big, beautiful bill" to enact his policies.[8] To more easily pass the bill, Republicans chose to use the budget reconciliation process,[9] which allowed them to avoid the 60-vote Senate filibuster (which carried importance as they hold 53 seats out of 100 in the Senate). This requires the House and the Senate to pass identical instructions before passing the actual reconciliation bill.[10]

Before being signed into law, the Senate approved the bill 51–50 on July 1, 2025, with Vice President JD Vance casting a tiebreaking vote in support. It passed the House of Representatives, 218–214, on July 3, 2025. It passed over universal Democratic opposition in both houses.

Remove ads

Provisions

Summarize
Perspective

The One Big Beautiful Bill Act[11][12] includes hundreds of provisions, is estimated to add roughly $3 trillion to the national debt[13][14] and is projected to cut approximately $4.46 trillion in tax revenue over a 10-year period.[15][16] The bill:

Extends 2017 tax cuts

Permanently extends the individual tax rates Trump signed into law in 2017, which were set to expire at the end of 2025.[17][18]

Cap for State and Local Taxes (SALT)

Increases the cap on the state and local tax deduction to $40,000 for taxpayers making less than $500,000, with the cap reverting to $10,000 after 5 years, at an estimated cost of $142 billion. Republican representatives Elise Stefanik, Mike Lawler, Nick LaLota, and Andrew Garbarino of New York, Representative Young Kim of California, and Representative Tom Kean Jr. of New Jersey cut this deal with House Speaker Mike Johnson in exchange for their votes;[citation needed]

Tax deduction for qualified overtime income

Creates a new tax deduction of up to $12,500 (or $25,000 if married filing jointly) of qualified overtime pay, effective January 1, 2025.[19]

Qualified overtime pay is compensation that an employer is required to pay an employee under the Fair Labor Standards Act, Section 7 because the employee worked more than 40 hours during the same workweek. The employee may take a tax deduction only for the extra half-time pay above their usual hourly rate they are paid for working more than 40 hours during the same workweek, not all the pay they receive for working those hours.[19] Overtime paid that is either paid voluntarily by an employer, is paid based on contractual agreements, or is only required by state or local laws is not eligible for the tax deduction.[20][21] Overtime pay continues to be subject to social security tax and Medicare tax.[22]

Individuals whose modified adjusted gross income is more than $150,000 (or $300,000 if married filing jointly) are not eligible to take the tax deduction.[19][a]

Individuals may take a tax deduction for the amount of qualified overtime compensation that appears on their Form W-2, which employers will be required to include on it.[22] Employers may use a reasonable method to approximate the amount to put on a Form W-2 for 2025. The Internal Revenue Service will release new procedures for federal tax withholding effective 2026.[23]

Tax deduction for qualified tip income

Creates new tax deductions for tips workers making less than $150,000, capped to $25,000 each, with the tax deduction set to expire in 2028.[24]

Tax deductible for interest for cars assembled in the U.S.

Allows car buyers to deduct up to $10,000 per year in auto loan interest for cars assembled in the United States and purchased between 2025 and 2028. The deduction phases out for individuals making over $100,000 or couples making over $200,000.[25]

Tax credit for seniors

Permanently eliminates the personal exemption, which had been temporarily eliminated by the Tax Cuts and Jobs Act of 2017. It offers a temporary tax deduction, set to expire in 2028, of up to $6,000 for seniors. The deduction phases out for individuals with modified adjusted gross income (MAGI) exceeding $75,000 ($150,000 for married couples).[17] According to the Council of Economic Advisors, this would result in 88% of seniors being able to claim enough deductions to clear their Social Security tax burden, up from 64% under prior law;[26]

Child Tax Credit

Increases the maximum amount of the child tax credit from $2,000 to $2,200 per child, and indexes the amount of the credit to inflation.[17][27] The refundable portion of the credit is also indexed to inflation, but is not increased, meaning that tax credit beneficiaries would not see a net increase in the credit, when adjusted for inflation.[27]

Pro-Alaska changes

In order to gain the support for Alaskan senators, the bill includes an increased tax deduction for whaling boat captains and a waiver process for an exemption for planned SNAP cuts for Alaska along with Hawaii.[28][29]

College endowments

Increases taxes on investment income from college endowments, estimated to raise $761 million over 10 years. Colleges with more than 3,000 students and an endowment per student ratio of $500,000 would be taxed starting at 1.4%, with the tax rate increasing to 8% for the wealthiest colleges. The original House bill proposed a tax of up to 21% with no exemptions based on size. An exemption for religious colleges was removed for violating the Byrd Rule.[30]

Trump Accounts and contribution pilot program

Includes the creation of Trump Accounts, a tax-advantaged savings account, under which the federal government deposits $1,000 to the account for a child born between 2025 and 2028,[31] and then parents may contribute up to $5,000 per year, with the money growing tax-deferred, with uses for higher education, job training, or a down payment on a home.[32][b]

Phase-out of green tax credits

Phases out tax credits passed in the Biden-era Inflation Reduction Act. Credits will continue for wind and solar projects which either start construction by June 2026 or which go online by December 2027.[34][c] Electric vehicle tax credits would be phased out by September 2025, and EV charging tax credits would be phased out by June 2026.[36][37] Fees on methane emissions that polluters have to pay the government would be postponed for 10 years, while tax credits for biofuels would be extended an additional four years to 2031.[13]

Private exploitation of public lands

Requires the leasing of at least 50% of public lands that private companies desire to lease for drilling, mining or logging. Cuts the royalties (the share of revenue) that the petroleum industry has had to pay for oil and gas extracted from public lands--costing taxpayers around $6 billion over a decade. Cuts the fee per acre that oil and gas companies have had to pay for initiating leasing of public lands. Reinstates "noncompetitive leasing" of public lands for drilling, mining or logging that allows companies to purchase at a cheap price public lands that were not sold at auction.[38]

Over the next decade, requires four lease sales to oil and gas companies of lands inside Arctic National Wildlife Refuge, and six lease sales in the National Petroleum Reserve-Alaska along Alaska's northern coast.[39]

Debt ceiling

Raises the United States debt ceiling by $5 trillion.[9]

Medicare drug negotiation

Reverses aspects of Medicare's price negotiation program, allowing more drugs to be exempt and increasing costs for consumers. The Congressional Budget Offices estimated $5 billion in lost savings for the government over ten years.[40]

Military defense features

The defense portion of the bill allocates an additional $150 billion in defense spending. This figure includes:

Border security

The bill includes $170 billion for spending on border security, creating the capacity to deport up to one million people each year.[43]

The bill increases the funding for Immigration and Customs Enforcement from $10 billion to more than $100 billion by 2029, making it the single most heavily funded law enforcement agency in the federal government.[44][45] These funds include:

Asylum fees, etc.

The bill establishes a $100 annual fee to apply for asylum, down from $1,000 in the House bill, a $550 fee to apply for employment authorization for asylum seekers and migrants on humanitarian parole or temporary protected status, and a $500 fee to apply for temporary protected status.[50] It also increases the fees for non-immigrant visas to $250.[13]

Medicaid cuts and potential cuts

  • Establishes a $50 billion Rural Hospital Fund, up from $25 billion, to support health care providers in rural areas, providing a safety net against Medicaid cuts;[13]

The bill cuts over $1.2 trillion in federal spending,[13] primarily from Medicaid[17] and nutrition funding SNAP.[51] The bill:

  • Requires states to charge enrollees in Medicaid expansion states with family incomes between 100 and 138 percent of the federal poverty level up to $35 for each health care service, if they qualify for Medicaid based on income alone.[52]
  • Adds work requirements for Medicaid recipients for the first time, with individuals ages 19 to 64 required to work at least 80 hours per month. Some exemptions exist for adults with dependent children ages 14 and under and those with medical conditions;[53]
  • Cuts the Medicaid provider tax, which helps states fund their Medicaid costs, from 6% to 3.5% by 2031;[13]
  • Requires states to check eligibility of people on Medicaid expansion every six months instead of annually;[13]
  • Prevents expansion states from using state contributions to pay Medicaid providers higher prices than Medicare would pay;[13]
  • Requires minimum staffing ratios for nursing homes;[13]
  • Requires a five-year waiting period for green card holders before applying to Medicaid, and reduces retroactive Medicaid payments from three months to one month;[13]
  • Limits premium tax credits for immigrants;[13]
  • Reduces Medicaid payments to states with errors and other improper payments;[13] and
  • Prohibits Medicaid from being used for funding Planned Parenthood and similar organizations for one year;[13][54] On July 7, 2025, Planned Parenthood sued the Trump Administration over the provision and the following day, a federal judge issued a temporary injunction on the provision.[55]

SNAP (Supplemental Nutrition Assistance Program)

  • Requires SNAP (federal food assistance) beneficiaries ages 18–64 to work at least 80 hours per month, compared to 18–54 under current law;[56]
  • Requires states with an error rate above 6% to contribute to up to 15% of SNAP benefit costs. Alaska and Hawaii received special exemptions after lobbying from Senators Lisa Murkowski and Dan Sullivan;[56]
  • Repeals the National Education and Obesity Prevention Grant Program;[13]
  • Reduces federal nutrition funding by $186 billion between 2025 and 2034.[51] Increases the share of state costs to administer the SNAP program from 50% to 75%;[57] and
  • Restricts future updates to the Thrifty Food Plan used to calculate SNAP benefit levels,[57]

Student loans

Miscellaneous

The bill contains the following additional provisions:[13]

Remove ads

Legislative history

Summarize
Perspective

Budget framework negotiations

Initially, on February 21, 2025, the Senate approved S. Con. Res. 7 by 52–48, intended to be the first of two reconciliation instruction bills. The resolution allowed for a future reconciliation bill containing $175 billion for immigration and border enforcement, $150 billion for the military and would not extend the 2017 Trump tax cuts. Senator Rand Paul of Kentucky was the only Republican to oppose the resolution.[70] The Senate intended to allow the House to pass reconciliation instructions first; however, at the time of the bill's passage, the House faced opposition to its one-bill approach from fiscally conservative members.[71]

On February 25, 2025, the House of Representatives approved H. Con. Res 14 by a 217–215 vote. The resolution would allow Republicans to pass a budget containing tax cuts while reducing federal spending. The resolution would also allow Congress to raise the debt limit by $4 trillion. The resolution was briefly pulled due to opposition from fiscally conservative Republicans Thomas Massie of Kentucky, Tim Burchett of Tennessee, Warren Davidson of Ohio, and Victoria Spartz of Indiana. However, leadership convinced all but Massie to support the resolution, and the vote happened as scheduled.[72] Initially, some moderate Republicans also expressed opposition over the possibility that the resolution would necessitate cuts to Medicare and Medicaid. Massie was the only House Republican to vote against the resolution.[73]

In the early hours of April 5, 2025, the Senate approved an amended version of H. Con. Res 14 by a 51–48 vote. Unlike the House budget resolution, the Senate budget resolution calls for $4 billion in spending cuts; this amount is significantly lower than the $1.5 trillion in cuts called for by the House. The Senate resolution also calls for a $5 trillion raise in the debt limit ($1 trillion more than the House resolution). The House and the Senate resolutions would each extend Trump's 2017 tax cuts.[74] Republican Senators Susan Collins of Maine and Rand Paul of Kentucky joined all Democratic senators in opposing the resolution. After the vote, Reuters reported that non-partisan analysts believe that the resolution, if enacted as currently written, would add $5.7 trillion to the national debt of the United States over the next 10 years. Republicans argue that the extension of the 2017 tax cuts, which expire at the year's end, should not be counted as new debt, which means that only $1.5 trillion would be added to the national debt over the next 10 years.[75]

The House had to pass the Senate's amended resolution to continue the reconciliation process. House Republican leadership intended to vote on the resolution on April 9. However, the resolution was pulled due to opposition from 12 fiscally conservative Republicans.[76] The resolution passed the following morning in a 215–214 vote after the Senate pledged also to seek at least $1.5 trillion in cuts. Fiscally conservative Republicans Thomas Massie and Victoria Spartz were the only members of their party to vote against the resolution.[77]

First House passage

Following markups by various House committees on their relevant portions of the bill, the House Budget Committee met on May 16, 2025, to combine the various markups into a single reconciliation bill. But some fiscally conservative Republicans opposed the bill over a desire for greater spending cuts, and the bill was rejected in a 21–16 vote, with Representatives Chip Roy of Texas, Ralph Norman of South Carolina, Andrew Clyde of Georgia, and Josh Brecheen of Oklahoma joining all Democratic committee members to vote against it. Republican Lloyd Smucker of Pennsylvania changed his vote from yes to no so that he would be allowed to bring a motion to reconsider the bill at a later time.[78] But on May 18, the Budget Committee voted to advance the bill in a 17–16 vote. Roy, Norman, Clyde, and Brecheen changed their votes to present after House Republican leadership agreed to make Medicaid work requirements—previously scheduled to begin in 2029—kick in sooner and decrease future subsidies for clean energy. Despite this, the four Republicans said they would not support the bill's final passage unless more changes were made.[79] Republicans did not secure these votes until May 21, when the bill was amended.[80][81]

On the morning of May 22, the United States House of Representatives passed OBBBA by a vote of 215–214–1, mostly along party lines.[82][83] Fiscally conservative Republicans Thomas Massie and Warren Davidson broke from their party to vote against the bill, while Freedom Caucus Chair Andy Harris of Maryland voted present. Republicans David Schweikert of Arizona and Andrew Garbarino of New York did not vote on the measure. House Democrats unanimously opposed OBBBA.[84]

On June 10, Republicans announced that they would amend OBBBA through a procedural rule.[85] By using a procedural rule to amend the bill, Republicans voting against amendments would also be voting against consideration of other, unrelated bills. The rule passed, 213–207, with Massie the only present Republican to vote against the rule.[86]

Democratic reaction

The narrow passage of OBBBA led to internal backlash and division in the Democratic Party. Three elderly Democratic representatives (Raúl Grijalva of Arizona, age 77; Sylvester Turner of Texas, age 70; and Gerry Connolly of Virginia, age 75) died in the first five months of 2025. If any of the three had been alive when the vote was taken, the result of the vote could have been different. Thus, the vote "quickly reignited an intraparty debate about gerontocracy and aging politicians clinging to power".[87][88]

Senate passage

House sending the Bill to the Senate on May 22, 2025

Following the House passage of OBBBA, the bill moved to the Senate for consideration.[89]

The Republican-led Senate amended the bill.[90] Fiscally conservative Republican Senators (nicknamed "deficit hawks") such as Ron Johnson of Wisconsin, Rick Scott of Florida, Mike Lee of Utah, and Rand Paul of Kentucky, pushed for deeper spending cuts.[90][91] Moderate Republicans such as Susan Collins of Maine, Lisa Murkowski of Alaska, and Jerry Moran of Kansas, along with populist Josh Hawley of Missouri, expressed concerns about Medicaid cuts.[90][92] Other moderates such as John Curtis of Utah and Thom Tillis of North Carolina, along with Murkowski and Moran, expressed concerns over the end of green energy tax credits.[90] Defense hawks such as Mike Rounds of South Dakota were opposed to spectrum auction provisions in the bill.[90]

Democrats in the Senate sought to use the Byrd Rule, which prevents reconciliation from being used to pass "extraneous" measures in bills which increase federal spending in the Senate, in order to strip certain provisions from the bill. Democrats argued that the extension of Trump's 2017 tax cuts, a proposed 10-year ban on state level AI regulations, language that limits the power of federal court to enforce contempt of court citations, a provision to end a tax on the manufacturing of gun silencers, a provision to defund Planned Parenthood, a provision banning Medicaid from funding gender-affirming care for people of all ages and a provision to streamline permits for fossil fuel projects, violated the Byrd Rule.[93][94][95]

Senate Majority Leader John Thune set a goal of passing the Senate's version of OBBBA by July 4, 2025.[96]

On June 20, 2025, the Senate Parliamentarian, Elizabeth MacDonough, ruled that several provisions from the Senate committees on Banking, Environment and Public Works, and Armed Services violated the Byrd Rule and could not be included in a 50-vote reconciliation bill. The bill will no longer be able to include a funding cap on the Consumer Financial Protection Bureau, $1.4 billion in pay cuts to Federal Reserve staff, a $293 million cut in funding for the Office of Financial Research, the elimination of the Public Company Accounting Oversight Board, a repeal of portions of the Inflation Reduction Act, a repeal of the Environmental Protection Agency's "multipollutant emissions standards" for certain vehicles built after the 2026 model year, and a provision to cut funding for the Department of Defense if spending requests are not made on time.[97] By June 24, the Parliamentarian also ruled against a provision that would make it harder for a plaintiff to sue in order to impose injunctions or restraining orders against the federal government, a provision allowing states to conduct enforcement at the United States border, a provision forcing the United States Postal Service to sell electric vehicles, the REINS Act, a provision to allow developers to bypass environmental review by paying a fee, and a provision forcing states to pay at least 5% of SNAP costs.[98][99] By June 27, the Parliamentarian had ruled against a provision to remove taxes on gun silencers and against a provision to expand Pell grants for short term training programs for workforces.[100][101]

On June 28, the Senate voted on a procedural motion to begin debate on the bill. Initially, fiscal conservatives Ron Johnson and Rand Paul, along with moderate Thom Tillis, voted against the motion, while fiscal conservatives Rick Scott, Mike Lee, and Cynthia Lummis, as well as moderate Lisa Murkowski, withheld their votes. After hours of negotiations, which resulted in Alaska specific provisions for Murkowski and Republican leadership support for an amendment vote that would result in increased Medicaid cuts targeted at the fiscal conservatives, Johnson, Scott, Lee, Lummis and Murkowski voted for the motion.[102] The passage of the motion to proceed began the "vote-a-rama" process, in which senators can propose an unlimited number of amendments to the bill. However, before it could begin, Democrats required the clerks of the Senate to read the entire 940 page bill in order to highlight Medicaid cuts.[103] The vote-a-rama began two days later, on June 30, in the early morning.[104] One of the few successful amendment votes, passing 99–1, removed the proposed AI law moratorium.[105] The vote-a-rama set a record for the most amendment votes in Senate history.[106]

JD Vance casting the tiebreaking vote

After an over 24-hour vote-a-rama, the bill passed the Senate on July 1, 2025, in a mostly party-line 51–50 vote.[107] All Senate Democrats voted against the bill, and Republicans Rand Paul, Thom Tillis, and Susan Collins of Maine broke from their party to vote against the bill as well.[108] Faced with a tie vote, Republican Vice President JD Vance cast a tie-breaking vote in favor of the bill.[107]

Second House passage

The House of Representatives needed to pass the Senate version of the OBBBA for the bill to reach the President's desk. On July 1, 2025, President Trump and Senate Majority Leader Thune expressed confidence that the bill would pass in the House.[109] However, House Republican moderates such as David Valadao and Young Kim of California, and Jeff Van Drew of New Jersey, who are against Medicaid cuts, Nick LaLota of New York, who is against SALT changes, and fiscal conservatives such as Chip Roy and Keith Self of Texas, who oppose federal deficit increases, had expressed opposition by June 30 to the bill in its then-current form.[110]

The House Rules Committee voted 7–6 on July 1, 2025, to advance the bill to the floor; however, fiscal conservative Republicans Chip Roy and Ralph Norman voted against advancing the bill. Usually, the members of the majority party on the Rules Committee always vote to advance the bill to the floor.[111]

A procedural vote on July 2, 2025, while negotiations were ongoing off the House floor, was the longest vote in House history.[112]

In the early morning of July 3, 2025, the House approved the final procedural rule vote 219–213. The vote, which began on the evening of July 2, was initially opposed by five Republicans: moderate Brian Fitzpatrick of Pennsylvania and fiscal conservatives Victoria Spartz of Indiana, Andrew Clyde of Georgia, Keith Self of Texas, and Thomas Massie of Kentucky. Eight other fiscal conservative Republicans, including Tim Burchett of Tennessee and Chip Roy of Texas, withheld their votes. However, after hours of negotiations with President Trump and Speaker Johnson, all but Fitzpatrick flipped their votes to advance the rule.[113]

Starting at 4:52 a.m., House minority leader Hakeem Jeffries delivered a lengthy speech using the "magic minute" to delay the passage of the bill, eventually breaking the 8 hour and 32 minute record set by Kevin McCarthy in 2021.[114]

On July 3, the House of Representatives passed the Senate version of the OBBBA in a final mostly party-line vote of 218–214.[115] Republican moderate Brian Fitzpatrick and fiscal conservative Thomas Massie, along with all Democrats, voted against the bill.[116][117]

Remove ads

Removed provisions

Summarize
Perspective

The following provisions were at one point included in the bill, but were removed:

Additionally, many provisions in the House bill were removed to comply with the Byrd rule in the Senate. These included:

Remove ads

Impact

Summarize
Perspective

National debt

The Congressional Budget Office (CBO) initially estimated that the OBBBA would add $2.4 trillion to the national debt of the United States by 2034.[e] The CBO later raised the estimated increase in the budget deficit to $2.8 trillion which was disputed by multiple Republican Party members, including House Speaker Mike Johnson and President Donald Trump.[137]

Risk to the social safety net

CBO estimates OBBBA would cause 10.9 million Americans to lose health insurance coverage.[f] The bill's cuts to Medicaid were the largest in the program's history and put rural hospitals at risk of closure with one clinic attributing their announced closure to the bill.[138][139] The loss of coverage for millions of Americans is expected to strain the finances of hospitals, nursing homes, and community health centers, which will be left to absorb more of the cost of treating the uninsured.[140] The Center for a Responsible Federal Budget estimates that the bill will accelerate the estimated insolvency of Social Security and Medicare by one year.[141] Experts have argued that the bill would create the largest upward transfer of wealth from the poor to the rich in American history due to large-scale benefit cuts paired with tax breaks for high-income earners and corporations.[142][143]

Clean energy roll-back

The bill was described by The New York Times as derailing renewable energy production and research in the United States, and possibly ceding the clean energy race to China.[144] Its policies favor fossil fuel companies over renewable energy such as solar, wind, and EV manufacturing, and are expected to lead to large clean energy job losses, factory closures, and deter investment in clean technologies.[145][146] Specifically, the bill phases out most clean-energy tax incentives introduced under the Biden-area Inflation Reduction Act such as credits for low-carbon electricity (wind, solar), electric vehicle rebates, and domestic manufacturing of batteries and solar panels.[147]

Expanded immigration enforcement

The U.S. government has allocated unprecedented funding to ICE for detention facilities, deportation operations, and additional funds to hire new agents.[148] The bill allocates ICE with more funding than any federal law enforcement agency in U.S. history and more than the federal prison system.[149] The expanded ICE funding is expected to lead to mass detentions and deportations, restricted access to asylum, and anticipated economic and humanitarian consequences.[150]

Education access

The bill adds new accountability rules for colleges and expanded grant eligibility to short-term training programs, eliminates subsidized graduate loans, sets an annual limit on unsubsidized graduate loan amounts,[151] and restructures income-driven repayment plans that could raise monthly payments and delay loan forgiveness.[152][153] In K–12 education, it established a federal tax credit for donations to private school scholarship funds.[154] Critics warned the bill could reduce college access for low-income and working students, divert public funds to private schools, and increase pressure on under-resourced school systems.[155][154]

Remove ads

Reception

Summarize
Perspective

Public perception

Multiple polls were conducted in June 2025 with general skepticism and disapproval from Americans.[156]

  • According to a Pew Research poll, 49% of Americans oppose the bill, 29% are in favor of the bill, and 21% are unsure.[157]
  • According to an IPSOS-Washington Post poll, 42% of Americans oppose the bill, 23% are in favor of the bill, and 23% are unsure.[158]
  • According to a Fox News poll, 59% of Americans oppose the bill, 29% are in favor.[156][159]
  • According to KFF, 64% of Americans oppose the bill, 35% are in favor.[156][160]

NPR noted that the bill's passage fulfilled several of Trump's campaign promises, but also violated his promise not to touch Medicaid benefits.[161] CNN described its passage as made possible despite intraparty opposition as an example of "Trump's iron grip on his own party" and an "omnipresent" effort to get Republicans on board despite its unpopularity with the American public.[162]

Support

According to the White House's website, whitehouse.gov, more than 200 organizations have stated their support for the OBBBA, including AT&T, Comcast, American Airlines, Delta Air Lines, the National Retail Federation, and the National Taxpayers Union.[163][164]

Trump has claimed that the bill is the "single most popular bill ever signed", a claim that CNN disputed.[165]

Opposition

Upward wealth transfer

The Atlantic,[166] CNBC,[167] The New York Times,[168] and Vox[143] argued that the bill would create the largest upward transfer of wealth from the poor to the rich in American history, with Fortune[169] and CNN[170] nicknaming it the "Reverse Robin Hood Bill". Senate Minority Leader Chuck Schumer (D-NY) mockingly called the bill the "We're All Going to Die Act",[171] alluding to comments made by Republican Senator Joni Ernst (R-IA) at a town hall.[172]

Adverse effects on public health

Public health and policy researchers at Yale University and the University of Pennsylvania sent a letter to Senate leaders warning that cuts to health programs in the bill would lead to over 51,000 preventable deaths annually.[173][174]

Greater ICE enforcement and deportations

Many Democratic and legal organizations have shared warnings about the expansion of immigration enforcement.[175][149] Rep. Alexandria Ocasio-Cortez shared, "I don’t think anyone is prepared for what they just did w/ ICE. This is not a simple budget increase. It is an explosion – making ICE bigger than the FBI, US Bureau of Prisons, DEA, and others combined. It is setting up to make what’s happening now look like child’s play. And people are disappearing."[175]

Dismantling clean energy initiatives

The nonpartisan think tank Energy Innovation found that the bill's efforts to dismantle clean energy incentives would cost more than 830,000 jobs across the country.[176] Cutting clean energy incentives would also raise energy costs for households,[177][178] with wholesale power prices rising by roughly 50 percent by 2035 due to the loss of new generation capacity.

Fiscal instability

The tax cuts included in the bill are predicted to greatly increase the federal debt in proportion to the GDP of the U.S. economy. Among other destabilizing effects, this may increase the cost of government borrowing as bond buyers demand a higher interest rate on new debt.[179][180] Moody's, which rates bonds, was the final of the three credit rating agencies to downgrade U.S. debt from AAA, citing efforts to pass the bill.[181]

On June 28, the Committee for a Responsible Federal Budget (CRFB) said of the Senate version of the bill:[182]

Although we have not produced a full estimate of the bill, it appears to add roughly $4 trillion to the debt through 2034, including interest – which is roughly $1 trillion higher than the House-passed version of the bill. That cost could rise above $5 trillion if temporary provisions were made permanent.

Unfavorable public opinion

Polling indicates that a majority of Americans opposed its previous provisions to ban state regulation of artificial intelligence.[183][184] The provision was seen as irresponsible by researchers who believe that artificial superintelligence is imminent.[185][186][187] Others feared that it would have prevented regulation of AI-generated child pornography and deepfakes, made certain privacy laws obsolete, and further centralized power in the federal government.[188][189] Representative Marjorie Taylor Greene (R-GA) stated that she would have voted against the bill if it had returned to the House with the restrictions on AI legislation.[190]

==== Elon Musk" Former close ally Elon Musk, then-de facto head of the Department of Government Efficiency (DOGE), denounced the bill as a massive spending bill;[191][192][193] he later called it a "disgusting abomination."[194][195] Some Republican senators have come out in support of Musk's opinion.[196] Republican opposition to the bill has been associated with the libertarian faction of the party.[197] As Rand Paul backed Musk's criticism of the bill, others have criticized Paul's Senate Homeland Security and Governmental Affairs Committee proposals for requiring new federal employees to be required to pay a higher FERS contribution rate if they opt for Title 5 benefits while "at will" employees would pay a lower FERS contribution rate. The concern is that the increase in the number of at-will federal employees could allow the president to eliminate a large number of employees for any reason.[198] The bill is credited with starting a public feud between Musk and Trump.[199]

John Hatton, staff vice president for policy and programs at National Active and Retired Federal Employees Association (NARFE), warned about the following:[200]

It would tax retirement benefits, creating a 5% pay cut for somebody under the system, while also undermining the merit-based civil service by having an additional 5% cut if you decide to retain those merit-based civil service protections. Those protections don’t exist for the purpose of the employee — they exist to protect against politically based firings of federal employees.

American Federation of Government Employees (AFGE) National President Everett Kelley stated that:[201]

This so-called reconciliation bill is in fact a big retaliation bill—retaliation against AFGE and other unions for successfully standing up for our members and fighting this administration’s illegal attempts to obliterate our federal agencies and the patriotic civil servants who run our federal programs. These provisions represent a direct assault on federal employees and their labor unions and will make it that much harder for federal agencies to recruit and retain the qualified employees they desperately need to serve the American public.

The 2001 recipient of the Nobel Memorial Prize in Economic Sciences, Joseph Stiglitz, was asked about the OBBBA in an interview with Swiss Radio and Television (SRF) as to how he would describe the legislation, to which he had replied:[202]

Outrageous. It exacerbates inequality and social division – one of the main problems of the USA. It deprives vulnerable groups of access to health care. Life expectancy is already declining, and the health differences between rich and poor are enormous. This law exacerbates this.


The nonpartisan Tax Foundation had mixed opinions of the bill, saying it made "some smart cuts", in particular praising the extension of the Tax Cuts and Jobs Act of 2017 which it argued would provide stability for households. It also expressed support for its impacts on counting international business income. It criticized the political nature of the bill, calling it filled with carve-outs and political gimmicks that increased the complexity of the tax code. It also criticized the bill's non-equal application of taxation on citizens.[203]

The Economist described the bill's policies and passage as an example of "America's creeping dysfunction", criticizing its impact on increasing the deficit and describing its tax cuts as "gimmicks". It also criticized Trump's handling of the economy more broadly, saying the bill "illustrates the long-term damage Mr Trump is doing to the foundations of America's economy" and describing its passage as exacerbating the effects of Trump's attacks on the Federal Reserve, defunding of scientific research, high tariff policy, and erosion to the rule of law. It described these cumulative effects as threatening America's economic stability and making it a riskier place to invest.[204]

The New York Times criticized Trump and his Republican allies' promotion of the bill, finding they made multiple false and misleading statements about the bill's impacts with inaccurate claims.[205] It also described it as filled with "a series of novel, populist and temporary cuts that Mr. Trump cooked up during the 2024 campaign to try to win the support of key constituencies" and that it was ultimately an "apotheosis of a traditionally conservative, supply-side philosophy". It described it as "generating little additional economic growth and still returning the largest savings to the rich". It interviewed several conservative tax experts and former Republican aides who described it as "incoherent" and clinging to a traditional Republican economic agenda, only partially offering more temporary benefits to the working class paid for by cutting Medicaid and federal food assistance and refusing to raise taxes on the rich.[206]

Remove ads

Common misconceptions

Summarize
Perspective

Taxes on social security

On July 3, Social Security Administration sent an email suggesting that federal income taxes on Social Security benefits would be eliminated under the bill, but tax experts stated the message was misleading.[207] The law introduces a temporary $6,000 tax deduction for persons aged 65 and older with a certain income, which can reduce federal tax liability from that otherwise owed, but the law does not directly eliminate the taxes on Social Security benefits, which remain in effect under 26 U.S.C. § 86.[207] All revenue from the taxation of Social Security benefits is earmarked for reinvestment into the Social Security Trust Fund, so the deduction would accelerate the insolvency of the Social Security benefits system by limiting this revenue stream.[208]

Taxes on tips

The No Tax on Tips provisions only reduce federal income tax liability and do not affect tax liability for purposes of the Federal Insurance Contributions Act, which funds Social Security and Medicare, or any other federal, state, or local tax law.[209] The new provision is expected to benefit roughly two thirds of tipped workers.[209][210] Workers would still need to report tips as taxable income, but the deduction can reduce the federal tax liability otherwise owed.[211]

Medicaid and illegal immigrants

The bill prompted claims that illegal immigrants receive Medicaid.[212] Illegal immigrants are already ineligible for full Medicaid benefits under the Personal Responsibility and Work Opportunity Act, so many illegal immigrants access state-funded health programs instead.[213] According to a CBO analysis, the bill's provisions could lead some states to cut back those state-funded health programs, potentially causing an estimated 1.4 million people to lose state-level health coverage, including illegal immigrants.[214][215]

Medicaid and unemployment

When commenting on the bill's impact on the economy, United States Secretary of Agriculture Brooke Rollins stated that 34 million able-bodied adults on Medicaid should be working.[216] According to the Government Accountability Office, roughly 70% of Medicaid recipients already work at least 35 hours per week but still qualify due to low wage.[217] Overall, it is estimated by the New York Times that only around 3% of Medicaid recipients are both able to work and long-term unemployed.[218]

Remove ads

See also

Notes

  1. Modified adjusted gross income is the sum of adjusted gross income and all gross income excluded as foreign earned income, foreign housing allowance, Guam-source income, American Samoa-source income, Northern Mariana Islands-source income, or Puerto Rico-source income.
  2. The bill considers the Trump Accounts to be individual retirement accounts with the exception of guidance by the Treasury Secretary or the Trump Account section of the bill itself.[33]
  3. The Senate version of the bill added a slower timeline than the House version of the bill.[35]
  4. Metallurgical coal is mostly used for applications such as steel production. About 77% of U.S. production of this type of coal is exported for the production of steel overseas;[61]
  5. Attributed to multiple sources:[131][132][133][134][135][136]
  6. Attributed to multiple sources:[131][132][133][134][135][136]

References

Loading related searches...

Wikiwand - on

Seamless Wikipedia browsing. On steroids.

Remove ads
Remove ads