On Friday, former President Donald Trump enacted the ambitious One Big Beautiful Bill, marking a significant achievement in his legislative agenda. This new law extends existing tax cuts while introducing phased reductions to Medicaid. The signing ceremony took place at the White House, coinciding with the celebration of U.S. Independence Day, a symbolic deadline previously set by Trump and his team to have this legislation finalized.
The U.S. Congress narrowly passed this extensive bill on Tuesday, a key component of Trump's legislative goals as both a former president and current Republican candidate. With strong support from the Republican majority in the House of Representatives, the bill has now reached the president's desk for official enactment.
Key Elements of the One Big Beautiful Bill
The One Big Beautiful Bill (BBB) is a sweeping and often controversial piece of legislation, encapsulating many of Trump's campaign promises and signaling a major overhaul in U.S. fiscal, social, and national security policies.
Among the prominent measures are permanent extensions of the 2017 tax cuts from Trump's first term, tax exemptions for tips and overtime for workers earning under $150,000 annually, and the introduction of "Trump Accounts"—savings accounts with tax benefits for education, housing, or job training. The bill further increases the child tax credit to $2,500 until 2028, permits deductions of up to $10,000 in interest on U.S.-made car loans, and raises the state and local tax (SALT) deduction cap to $40,000 for those earning under $500,000 each year.
The bill allocates over $150 billion for military funding and directs $170 billion towards border security initiatives, which include resources for the construction of a wall, new technology, and personnel.
Impact on Social Programs
In terms of social program adjustments, the OBBB enacts over $1.2 billion in federal spending cuts, primarily targeting Medicaid. It also establishes work requirements for medical assistance eligibility, reduces subsidies for the Supplemental Nutrition Assistance Program (SNAP), and gradually eliminates tax incentives for renewable energy sources.
Frequently Asked Questions about the One Big Beautiful Bill
What are the main features of the One Big Beautiful Bill?
The bill extends 2017 tax cuts, introduces "Trump Accounts," increases child tax credits, and raises SALT deduction caps. It also allocates significant funds to military and border security while cutting spending on social programs like Medicaid and SNAP.
How does the bill impact Medicaid?
The bill reduces federal spending on Medicaid by over $1.2 billion and introduces work requirements for recipients to qualify for assistance.
What changes does the bill make to tax policies?
The bill makes tax cuts from 2017 permanent, offers tax exemptions for tips and overtime for certain workers, and allows new deductions for car loan interest and state and local taxes.