One Big Beautiful Bill Act: A bill of over 1,000 pages (!) promising tax cuts, investments, spending reductions, and a massive political debate.
THE BILL
The bill passed the House of Representatives by the narrowest possible margin: 215–214. All Democrats and two Republicans voted against it.
So, what exactly is it? It’s a mega-bill that extends the 2017 tax cuts, reduces social programs like Medicaid and SNAP, increases spending on defense and deportations, and introduces new tax breaks and investment tools for families and seniors.
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Medicaid is a government healthcare program that provides free or low-cost medical services to low-income individuals and families in the U.S.
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SNAP (Supplemental Nutrition Assistance Program) is the program formerly known as "food stamps." It provides monthly benefits to low-income households to help them buy food.
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SALT (State and Local Taxes). The SALT deduction allows taxpayers to deduct certain local taxes from their federal tax bill. Raising the SALT cap means higher-income taxpayers in high-tax states can deduct more from their taxable income.
In terms of tax changes, the bill permanently raises the Child Tax Credit from $1,000 to $2,000, and temporarily up to $2,500. The SALT deduction cap increases from $10,000 to $40,000 for 2025. Tips and overtime pay won’t be taxed until 2028 for individuals earning under $160,000. Seniors over 65 with incomes up to $75,000 will receive an additional $4,000 tax deduction. People who pay interest on vehicles made in the U.S. can deduct up to $10,000 a year from their taxable income.
On the investment side, the bill introduces Trump Accounts—special accounts for children seeded with $1,000 from the government, invested in index funds, and usable for education, a first home, or starting a business. Health Savings Accounts (HSAs) also become more attractive, with higher contribution limits and expanded uses—including for gym memberships and personal training.
CUTS
But to fund all this, there are also deep cuts. Medicaid and SNAP will be reduced by over $1 trillion in total. It’s estimated that 14 million people will lose their health coverage, and 3 million households will lose access to food assistance.
The political cost is already enormous, and Democrats say they will use this bill as a weapon against Republicans in the upcoming elections.
From an economic standpoint, the bill costs $5.2 trillion and adds $600 billion to the deficit just in the next year. And let’s not forget: Moody’s has already downgraded the U.S. credit rating, sparking fears of higher inflation and increased borrowing costs.
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