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House passes Trump’s sweeping tax-cut bill, sends it to Senate House passes Trump’s sweeping tax-cut bill and sends it to Senate
(about 3 hours later)
Measure would tighten eligibility for health and food programs for the poor and could add $3.8tn to US debtMeasure would tighten eligibility for health and food programs for the poor and could add $3.8tn to US debt
The Republican-controlled US House of Representatives narrowly passed a sweeping tax and spending bill that would enact much of President Donald Trump’s policy agenda on Thursday and saddle the country with trillions of dollars in debt. Analysis: Promises of an American ‘golden age’ – that conveniently ends with Trump’s presidency
The bill would fulfill many of Trump’s populist campaign pledges, delivering new tax breaks on tips and car loans and boosting spending on the military and border enforcement. It will add about $3.8tn to the federal government’s $36.2tn in debt over the next decade, according to the nonpartisan Congressional Budget Office (CBO). Republicans in the House of Representatives won passage on Thursday of a major bill to enact Donald Trump’s tax and spending priorities while adding trillions of dollars to the US debt and potentially prevent millions of Americans from accessing federal safety net benefits.
What Trump called the “one big, beautiful bill” passed in a 215-214 vote, with all of the chamber’s Democrats and two Republicans voting against it. A third Republican voted “present”. The One Big Beautiful Bill Act was approved in the early morning hours along party lines by the slim Republican majority, with 215 votes in favor and 214 against. Its passage ended weeks of negotiations that drew into question the GOP’s ability to find agreement on Trump’s top legislative priority in a chamber they control by just three seats.
The package must also win approval in the Republican-controlled Senate before Trump can sign it into law. The vote came after a marathon push that kept lawmakers debating the bill through two successive nights. “I give glory to God. I mean, there’s a lot of prayer that brought this together, I’m just going to be very blunt about it. There was a few moments over the last week when it looked like the thing might fall apart,” the House speaker, Mike Johnson, said after the bill’s passage.
The 1,000-page legislation would extend corporate and individual tax cuts passed in 2017 during Trump’s first term in office, cancel many green-energy incentives passed by Democratic former president Joe Biden, and tighten eligibility for health and food programs for the poor. It also would fund Trump’s crackdown on immigration, adding tens of thousands of border guards and creating the capacity to deport up to 1 million people each year. Trump cheered the vote and encouraged the Senate to pass the measure quickly. “This is arguably the most significant piece of Legislation that will ever be signed in the History of our Country!” he wrote on Truth Social. “Now, it’s time for our friends in the United States Senate to get to work, and send this Bill to my desk AS SOON AS POSSIBLE! There is no time to waste.”
The bill passed despite growing concerns over the US debt, which has reached 124% of GDP, prompted a downgrade of the US’s top-notch credit rating by Moody’s last week. The bill will make good on several of Trump’s campaign promises, including extending tax cuts for individuals and corporations, and sunsetting clean energy incentives enacted under Joe Biden. It also relieves taxes on tips, overtime and car loan interest, offers parents $1,000 if they open “Trump accounts” for their children and expands a deduction for older taxpayers – though only for as long as Trump remains in office.
The US government has recorded budget deficits every year of this century, as Republican and Democratic administrations alike have failed to bring spending in alignment with revenue. The bill also pays for construction of a wall along the border with Mexico, and new staff and facilities for mass deportations of undocumented immigrants.
Interest payments accounted for one out of every eight dollars spent by the US government last year, more than the amount spent on the military, according to the CBO. That share is due to grow to one out of every six dollars over the next 10 years as an ageing population pushes up the government’s health and pension costs, even if Trump’s budget bill is not taken into account. To offset its costs, the GOP has approved funding cuts and new work requirements for Medicaid, which provides healthcare for poor and disabled Americans, and the Supplemental Nutrition Assistance Program, also known as Snap. Analysts fear these changes will bar millions from these benefits.
Investors, unnerved by the US’s fiscal standing and Trump’s erratic tariff moves, are increasingly selling the dollar and other US assets that make up the bedrock of the global financial system. Even with the cuts, the measure is expected to cost $3.8tn over the next 10 years, according to the nonpartisan Congressional Budget Office. Its passage in the House comes less than a week after credit ratings agency Moody’s stripped the US of its top-notch triple-A rating and warned of its large national debt and federal budget deficit.
“We’re not rearranging deck chairs on the Titanic tonight. We’re putting coal in the boiler and setting a course for the iceberg,” said Representative Thomas Massie of Kentucky, one of the two Republicans to vote against the bill. House Democratic leaders have decried the bill as a “tax scam” that “is deeply unpopular, which is why Republicans made every effort to advance it during the dead of night”.
Debt ceiling deadline “This fight is just beginning, and House Democrats will continue to use every tool at our disposal to ensure that the GOP Tax Scam is buried deep in the ground, never to rise again,” the minority leader, Hakeem Jeffries, the whip, Katherine Clark, and the caucus chair, Pete Aguilar, said.
Republican supporters of the bill had argued that failure to pass it would have raised taxes for many American households. They also plan to use the bill to raise the federal government’s debt ceiling, a step Congress must take by summer or risk triggering a devastating default. Their options are limited. The party is in the minority in both chambers, and Republicans are following the budget reconciliation procedure to prevent it from facing a filibuster in the Senate.
“The success of the country depends on it,” Representative Stephanie Bice, an Oklahoma Republican, said on Wednesday. “These are pro-growth objectives that the president’s very in favor of, and so we’re moving forward.” The biggest obstacle the bill faces are disputes among Republicans themselves. In the days leading up to the vote, Johnson had to reach agreements with lawmakers representing Democratic-led states who demanded a bigger deduction for state and local taxes (Salt). He also had to woo moderates wary of cutting too deeply to safety net programs and rightwing lawmakers demanding more cost savings.
With a narrow 220-212 majority, the House speaker, Mike Johnson, could not afford to lose more than a handful of votes from his side. The speaker appears to have bridged those divides, aided by a visit to the Capitol from Trump on Tuesday. Moderates backed down after some cuts were nixed, while lawmakers who held out over Salt won an enlarged tax break. Johnson also managed to corral most fiscal conservatives, with Kentucky’s Thomas Massie and Ohio’s Warren Davidson the sole no votes on the bill, both of whom cited its impact on the deficit.
Republicans on the party’s right flank had pushed for deeper spending cuts to lessen the budget impact, but they met resistance from centrists who worried they would fall too heavily on the 71 million low-income Americans enrolled in the Medicaid health program. “This bill is a debt bomb ticking,” Massie said as the bill was debated. “We’re not rearranging deck chairs on the Titanic tonight. We’re putting coal in the boiler and setting a course for the iceberg.”
Johnson made changes to address conservatives’ concerns, pulling forward a new work requirements for Medicaid recipients to take effect at the end of 2026, two years earlier than before. That would kick several million people off the program, according to the CBO. The bill also would penalize states that expand Medicaid in the future. The legislation now heads to the Senate, where Republicans say they would like to have it on Trump’s desk by 4 July, the Independence Day holiday.
Johnson also expanded a deduction break for state and local tax payments, which was a priority for a handful of centrist Republicans who represent high-tax states like New York and California.
Democrats blasted the bill as a disproportionately benefiting the wealthy while cutting benefits for working Americans. The CBO found it would reduce income for the poorest 10% of US households and boost income for the top 10%.
“This bill is a scam, a tax scam designed to steal from you, the American people, and give to Trump’s millionaire and billionaire friends,” Democratic Representative Jim McGovern of Massachusetts said.
The Senate, where Republicans hold a 53-47 majority, is not expected to take the bill up until early June. Top Senate Republicans have said that chamber may make significant changes to the bill before passing it.