Trump's "One Big Beautiful Bill"

President Donald Trump signed the "One Big Beautiful Bill" (OBBB) into law on July 4, 2025, following its narrow passage in the U.S. Congress. This nearly 900-page budget reconciliation bill represents a sweeping legislative victory for the Trump administration, enacting significant changes across various sectors of the American economy and federal policy.

Here's a summary of its key provisions:

1. Tax Reforms & Incentives:

• Permanent Tax Cuts: Makes permanent many of the individual income tax rates and brackets from the 2017 Tax Cuts and Jobs Act (TCJA) that were set to expire.
• SALT Cap Increase: Temporarily raises the cap on the State and Local Tax (SALT) deduction to $40,000 for taxpayers earning less than $500,000, from the previous $10,000. This increase is set to revert to $10,000 after 2029.
• No Tax on Tips & Overtime: Creates new tax deductions, effectively making most tips (up to $25,000 annually) and overtime pay (up to $12,500 annually) non-taxable at the federal level for workers earning below certain thresholds. These provisions are temporary, expiring in 2028.
• Child Tax Credit Increase: Increases the maximum Child Tax Credit from $2,000 to $2,200 per child and indexes it to inflation.
• Senior Tax Deduction: Offers a temporary tax deduction of up to $6,000 for seniors, which phases out for higher earners. This is expected to result in 88% of seniors paying no tax on their Social Security income.
• Business Tax Relief: Permanently extends the 20% deduction for pass-through business income and restores 100% immediate expensing (bonus depreciation) for qualified business property and R&D expenses.
• "Trump Accounts": Establishes a new savings vehicle where the U.S. government deposits $1,000 upon the birth of a child (born between 2025-2028), with parents able to contribute up to $5,000 annually, growing tax-deferred for higher education, job training, or a home down payment.
• Car Loan Interest Deduction: Allows buyers to deduct up to $10,000 per year in auto loan interest for U.S.-assembled cars purchased between 2025-2028, with phase-outs for higher incomes.
• College Endowment Tax: Increases taxes on investment income from college endowments for wealthier institutions.

2. Immigration & Border Security:

• Massive Funding: Allocates substantial funding (reportedly $350 billion) for border enforcement and deportations.
• Border Wall & Detention: Includes funds for finishing the US-Mexico border wall and expanding migrant detention facility beds (reportedly to 100,000).
• Increased Staffing: Funds the hiring of 10,000 new Immigration and Customs Enforcement (ICE) officers and boosts Border Patrol staffing.
• Remittance Tax: Imposes a new 1% excise tax on certain outbound international cash remittance transfers from the U.S.
• Asylum Fees: Introduces a $100 fee for asylum seekers.

3. Social Safety Nets & Healthcare:

• Medicaid Cuts: Imposes new 80-hour-per-month work requirements for many able-bodied adults (ages 19-64) without dependents to maintain Medicaid coverage. It also increases state responsibility for some costs and requires more frequent eligibility checks, potentially leading to millions losing coverage.
• SNAP Cuts: Expands work requirements for Supplemental Nutrition Assistance Program (SNAP) benefits (food stamps) to include adults up to age 64 and shifts more cost-sharing responsibility to states.
• Rural Health Funding: Establishes a $50 billion "Rural Health Transformation Program" over five years (2026-2030) to improve healthcare access and outcomes in rural areas.
• Medicare Drug Negotiation: Reverses aspects of Medicare's drug price negotiation program, potentially increasing costs for consumers.

4. Energy & Environment:

• Rollback of Green Energy Credits: Accelerates the phase-out or outright repeals many clean energy tax credits and programs established under the previous administration's Inflation Reduction Act (IRA), including those for electric vehicles and residential energy products.
• Fossil Fuel Promotion: Repeals the methane emissions tax and supports unlocking oil and gas development on federal lands.

5. Defense & National Security:

• Increased Defense Spending: Provides significant new defense spending (reportedly $150 billion).
• Golden Dome System: Allocates $25 billion for the development of the "Golden Dome" missile defense system, envisioned as similar to Israel's Iron Dome.

6. Education:

• Federal Private School Choice: Establishes the first nationwide, federally funded private school choice initiative, allowing eligible families to access scholarships for private and home education through a tax credit model. This program is set to be fully rolled out in 2027.

7. Fiscal Implications:

• Debt Ceiling Increase: Raises the U.S. debt ceiling by $5 trillion.
• Projected Deficit Impact: The bill is projected by the Congressional Budget Office (CBO) to increase the federal deficit by nearly $3.3 trillion over the next decade (2025-2034).

The "One Big Beautiful Bill" represents a bold and comprehensive legislative agenda, reflecting President Trump's core policy priorities from his election campaign. Its passage is expected to have far-reaching effects on the U.S. economy, social programs, and national security for years to come.