Congressional Republicans passed the One Big Beautiful Bill Act, a massive spending bill focused on permanently extending tax cuts enacted during Trump’s first term and creating new deductions. While these measures aim to provide relief to the working class and families, they come with a catch – the deductions are only available through 2028, coinciding with the end of Trump’s term in office. The bill, which is expected to add $3.4tn to the deficit through 2034, includes provisions such as increasing the child tax credit, offering “Trump accounts” for parents to save for their children’s future, and providing a $4,000 deduction for older taxpayers.
However, the bill also contains cuts to social safety net programs, such as Medicaid and the Supplemental Nutrition Assistance Program (Snap), which could impact millions of Americans. The new work requirements for these programs could lead to millions losing their health insurance coverage and risking their benefits. Despite the bill’s promises, the Congressional Budget Office estimates that the wealthiest taxpayers will benefit the most, while the poorest taxpayers may see a decrease in resources due to downsized benefit programs.
The bill’s temporary nature and the delayed start of spending cuts raise concerns about future fiscal challenges, potentially leading to a “fiscal cliff” for future Congresses and presidents. Cancelling the spending cuts and maintaining the deductions would come at a high cost, with forecasts suggesting it could exceed the government’s expenditures during the Covid pandemic. The bill now awaits consideration in the US Senate, where further changes are expected to be made.
