The "Big Beautiful Bill" (officially the One Big Beautiful Bill Act, or OBBBA), signed into law on July 4, 2025, is a comprehensive U.S. federal statute containing hundreds of provisions related to taxes, spending, and social programs. It reflects the core agenda of President Trump's second term. Here are the key elements included in the bill:
- Tax Provisions:
- Permanently extends the individual tax rates from the 2017 Tax Cuts and Jobs Act.
- Raises the cap on state and local tax deductions to $40,000 for taxpayers making under $500,000, reverting to $10,000 after five years.
- Introduces deductions related to tips, overtime pay, auto loan interest (for U.S.-assembled cars), and creates "Trump Accounts" for tax-deferred savings for children until 2028.
- Increases the child tax credit by $200 (from $2,000 to $2,200 per child) and indexes it to inflation.
- Implements a 1% tax on remittances and hikes investment income tax from college endowments.
- Phases out some clean energy tax credits from prior laws and promotes fossil fuels while incentivizing advanced semiconductor manufacturing.
- Raises the small business tax deduction from 20% to 23% and restores 100% immediate expensing for business investments.
- Spending and Deficit:
- Raises the federal debt ceiling by $5 trillion.
- Adds $150 billion in new defense spending and $150 billion for border enforcement and deportations.
- Dramatically increases Immigration and Customs Enforcement (ICE) funding from $10 billion to over $100 billion by 2029.
- Social Programs:
- Cuts Medicaid spending by about 12%, with multiple new restrictions such as work requirements (80 hours/month) for recipients aged 19-64, increased fees for certain Medicaid services, more frequent eligibility checks, and a five-year waiting period for green card holders.
- Expands work requirements for SNAP (food stamps) recipients and shifts some costs to states.
- Enhances the Rural Hospital Fund to help rural health providers.
- Prohibits Medicaid funds from supporting Planned Parenthood for one year (a provision challenged in court).
- Provides a $6,000 tax deduction for seniors, phased out at higher incomes.
- Includes tax relief for hourly workers by eliminating taxes on tips and overtime pay.
- Impact:
- Estimated to add roughly $3 trillion to the national debt over 10 years.
- Cuts about $4.46 trillion in tax revenue over the same period.
- Expected to deliver the largest tax cut in history for the middle and working class, with typical families seeing significant increases in take-home pay.
- Some controversy around cuts to Medicaid and social support programs.
The bill is a sweeping economic and social policy package with large implications for tax policy, federal spending, social welfare programs, and enforcement funding. If you'd like, I can provide more details on specific parts of the bill. Would you like more information on taxes, Medicaid changes, or other sections?
