New Delhi: Donald Trump’s “big, beautiful” tax and spending bill, set to be signed into law, strengthens the immigration crackdown in the US, makes permanent the 2017 tax cuts and delivers new tax breaks that the US president promised during his 2024 poll campaign, among other things.
The bill cleared the final hurdle Thursday with the US House of Representatives passing it, thereby handing Trump the first major legislative victory of his second term.
A result of weeks of discussions and marathon debates, the bill will now be directed to the president himself, who is expected to sign it into law Friday, the US Independence Day holiday, at 5 pm local time.
The over 900-page bill was passed with 218-214 votes and represents a dramatic realignment of the federal government’s role in American life, shifting resources away from the social safety net and clean energy investments and towards trillions of dollars in new spending on tax cuts, immigration enforcement, and national defence. Two Republicans voted against the bill.
At its core, the legislation builds on Trump’s 2017 Tax Cuts and Jobs Act, which lowered taxes for corporations and most income groups. While Trump argues the policy fuels economic growth, critics say it disproportionately benefits the wealthy.
Most of the provisions of the 2017 Act are set to expire in December. But the new bill seeks to make the tax cuts permanent and raise standard deductions by $1,000 for individuals and $2,000 for couples temporarily until 2028.
To offset the cost, Republicans have suggested tighter rules for Medicaid, a programme that benefits millions of low-income and differently-abled Americans. The major changes include new work requirements for childless adults without disabilities, who would need to work at least 80 hours per month beginning December 2026.
The bill also makes Medicaid re-enrolment stricter, asking beneficiaries to reapply every six months and provide additional evidence of income and residency.
Besides, it proposes reducing provider taxes—used by states to pay for Medicaid—to 3.5 percent from 6 percent by 2032. In response to criticism from rural-state lawmakers, the Senate postponed the reductions and added a $50 billion rural hospital fund.
The Congressional Budget Office reckons that these actions may leave close to 12 million Americans without health insurance by the end of the next decade, mostly because of tougher requirements and cumbersome paperwork.
The new bill also includes $14 billion for deportation operations, $45 billion for new immigration detention centres, and additional billions of dollars to hire 10,000 more agents by 2029. Border wall and other fortifications will receive an additional $50 billion in funding.
The legislation aims to gradually eliminate tax breaks that the Congress established during Joe Biden’s administration to incentivise firms and consumers to adopt sustainable energy technologies, such as electric cars. Subsidies for Americans looking to convert their houses to cleaner or more energy-efficient appliances will also expire this year, along with credits for cleaner autos.
Finally, the bill raises the federal debt ceiling by $5 trillion, increasing the government’s borrowing limit.
The Congressional Budget Office forecasts that the measure could add $3.3 trillion to federal deficits over the next 10 years, leaving millions without health insurance. The White House has opposed the figure.
Democrats have slammed the measure as “one big, ugly bill” that cuts anti-poverty programmes to subsidise tax breaks for the wealthiest.
Hakeem Jeffries, Democratic House minority leader, made a last-ditch effort to prevent the bill from being passed by delivering the longest House address in history, lasting eight hours and 44 minutes.
“This is extraordinary. This assault on everyday Americans, assault on children, veterans, seniors, people with disabilities. It’s incredible to me, all of this in this one, big, ugly bill,” Jeffries said.
Trump was highly involved in selling the measure to sceptical lawmakers, including inviting them to the White House for talks all day Wednesday. He also spoke out on social media, asking that lawmakers finish the job.
“Largest Tax Cuts in History and a Booming Economy vs. Biggest Tax Increase in History, and a Failed Economy. What are the Republicans waiting for??? What are you trying to prove??? MAGA IS NOT HAPPY, AND IT’S COSTING YOU VOTES!!!” Trump wrote on Truth Social Thursday.
Earlier this week, the bill narrowly passed the Senate, with Vice-President J.D. Vance casting the decisive tie-breaking vote.
(Edited by Nida Fatima Siddiqui)