Hey there! Let's dive into the latest update on the "One Big Beautiful Bill" (H.R. 1 – the One Big Beautiful Bill Act of 2025). This budget reconciliation package has been making waves in the US legislative system, and we're here to give you the lowdown.
*What it is and Where it Stands*
The One Big Beautiful Bill is a sweeping package that combines tax cuts, spending changes, and a debt-ceiling increase. It passed the House on May 22, 2025, with a narrow vote of 215–214–1 and was later approved by the Senate on July 1, 2025, with a 51–50 vote, thanks to Vice President JD Vance's tie-breaker. Now, it's headed back to the House for final approval before being signed into law by the President.¹ ²
*Key Provisions*
- *Taxes & Credits*:
- Extends 2017 TCJA tax cuts permanently, including lower brackets and a higher standard deduction
- Raises SALT deduction cap from $10k to $40k, phased out for higher incomes
- Introduces no taxes on tips, overtime, and vehicle interest, plus a $4k senior standard deduction bonus
- Expands Child Tax Credit and extends paid leave credits, 529 savings, and "Trump Investment Accounts"
- *Spending & Programs*:
- Cuts Medicaid, introducing work requirements and reducing provider taxes, potentially dropping millions from coverage
- Reduces food assistance (SNAP), student aid, and ACA marketplace supports, impacting millions
- Reverses green energy tax repayment credits and loosens clean-energy incentives
- Allocates $175 billion to border/immigration and $150 billion to defense, including a missile defense shield
- *Fiscal Impact & Projections*:
- Estimated to add $3-3.8 trillion to the federal deficit over ten years
- Potential debt impact could reach $5 trillion if temporary parts are made permanent
- Moody's downgraded US debt from AAA due to fiscal concerns
*Pros & Cons*
- *Pros*:
- Major tax relief for middle-class workers, seniors, and small businesses
- Permanence and stability for businesses through full expensing for domestic investment
- *Cons*:
- Cuts to Medicaid, SNAP, and ACA could strip 3-9 million Americans of coverage
- Potential increase in income inequality, dubbed "Reverse Robin Hood" by opponents
- Clean-energy rollbacks threaten ~830,000 jobs and raise future energy costs
- Estimated ~51,000 excess deaths due to health cuts, according to Yale/UPenn researchers
*What's Next*
1. The bill returns to the House for a final vote, expected before the July 4 holiday.
2. If approved, it heads to the President's desk to be signed into law.
The One Big Beautiful Bill is a complex, partisan reconciliation package with both supporters and critics. While it delivers permanent tax breaks and senior relief, it also slashes major social programs, expands the deficit, and rolls back green energy incentives. The outcome will depend on the final vote and the President's decision.
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