Today, House Republicans approved Donald Trump’s sweeping bill concerning taxes and immigration, sending it to the Senate. The party aims for this legislation to “transform” federal operations and the economy, while also enhancing efforts to deport immigrants and bolster military funding.
The measure, referred to as “A Big Beautiful Bill,” extends trillions in tax cuts from Trump’s earlier term and introduces new initiatives, such as eliminating taxes on tips and overtime, alongside hundreds of billions earmarked for increased public spending.
However, the financial implications are substantial. The Congressional Budget Office (CBO) recently estimated that this bill could increase the national debt by $2.4 trillion over the next decade, which currently exceeds $36 trillion.
To manage these expenses, the proposal suggests over $1 trillion in cuts to social safety net programs. It might also necessitate an additional $500 billion reduction in Medicare, unless Congress alters future deficit limits. The CBO anticipates that up to 8.7 million individuals may lose Medicaid coverage, and another 7.6 million could find themselves uninsured within the same timeframe.
The final vote occurred just before 7 a.m. Thursday, wrapping up a marathon session lasting over 24 hours. Republicans aimed to pass the bill before July, using food, coffee, and energy drinks to keep weary lawmakers alert. Major revisions are anticipated in the Senate, where internal party conflicts might spark amendments, reigniting ideological debates within the GOP.
Trump has endorsed the bill, with many proposals stemming from his campaign events—such as the zero tax on tips, inspired by a conversation with a waitress. The retraction of the tax on Social Security benefits was excluded, replaced instead with an added $4,000 deduction for seniors.
When the bill faced jeopardy due to internal party disputes, Trump intervened personally, speaking at Republican gatherings, making calls to hesitant members, and holding meetings at his Florida resort to promote unity.
Just yesterday (Wednesday), the White House warned that any GOP refusal of the bill would be considered “ultimate treason.” Later that afternoon, Trump summoned the most hardline congressional members to the White House, instructing them to enforce discipline. Hours later, the dissenters were appeased.
Republicans contend that approving these tax breaks will lead to significant economic growth in the U.S. “With this bill, your life will improve dramatically because you will have more money in your pocket,” claimed House Majority Leader Steve Scalise at a conservative event on Tuesday.
However, many economists express concerns about market uncertainty due to Trump’s tariffs, which have disrupted supply chains and could trigger further inflation.
The fiscal ramifications of this bill have alarmed investors. On Wednesday, as the deal approached and additional cuts were scrapped, bond yields increased, indicating rising anxiety about U.S. economic stability. Republicans are attempting to pass the bill via budget reconciliation to avoid potential roadblocks in the Senate. However, this method has strict guidelines that might jeopardize the bill’s ultimate approval.
Ask Me Anything
Explore Related Questions
