In a rare Sunday night vote, House Republicans narrowly advanced the One Big Beautiful Bill Act, a sweeping 1,116-page legislative package aimed at enshrining former President Donald Trump’s second-term tax and spending priorities. While the bill cleared the House Budget Committee in a 17–16 vote—with four conservative Republicans voting “present” to allow continued negotiations—it remains on uncertain ground as it approaches a full House vote ahead of the Memorial Day deadline.
Tax cuts extended, new breaks added
At the heart of the legislation is a permanent extension of the 2017 Trump-era tax cuts, preserving lower income tax rates and an expanded standard deduction that would otherwise expire after 2025. The bill also temporarily introduces new provisions, including:
- No taxes on tips, overtime pay, and car loan interest (2025–2028)
- A $1,000 government contribution for newborns into MAGA savings accounts, with family and nonprofit contributions of up to $5,000 annually
- An expanded child tax credit, increased to US$2,500 per child for 2025–2028 and indexed thereafter
- Enhanced deductions for seniors and expanded eligibility for health savings accounts
The bill also permanently enhances the qualified business income deduction, raising it from 20% to 23%, and removes certain deductions such as those for moving expenses and bicycle commuting reimbursements.
Business and rural incentives
Corporations would benefit from permanent full expensing of new factories, extended deductions for research costs, and new tax credits tied to rural investments. The bill renews and refines the Opportunity Zone program, with enhanced incentives for rural areas and stricter criteria for urban tracts.
It also introduces a partial exclusion of interest on agricultural loans, repeals the indoor tanning excise tax, and raises the information reporting threshold for contractor payments from US$600 to US$2,000.
Targeted eliminations of Biden-era clean energy credits
A major flashpoint is the bill’s repeal of dozens of clean energy tax credits introduced under the Biden administration, including those for electric vehicles, solar panels, and hydrogen production. Republicans argue these are costly and inefficient, while Democrats warn the rollbacks undermine climate goals.
Medicaid, food stamps, and “workfare”
The bill proposes sweeping changes to Medicaid and SNAP (food assistance), including:
- Work requirements for able-bodied adults using Medicaid
- Cost-sharing mandates on states for SNAP benefits
- An increase in SNAP work requirements to cover adults aged 18–64
Democrats have decried these changes as punitive. “There is nothing wrong with us bringing the government in balance,” said Rep. Jim Clyburn, “but not on the backs of working people.”
Sticking points in Congress
Despite advancing out of committee, the bill is under heavy fire from both ends of the Republican caucus:
- Hard-right members of the House Freedom Caucus, including Rep. Chip Roy and Rep. Ralph Norman, say the bill’s Medicaid work requirements take effect too late (2029) and spending cuts don’t go far enough. They’re pushing to accelerate cuts and eliminate undocumented immigrant access to federal health benefits.
- Moderate Republicans, particularly from high-tax states like New York and California, are demanding a much larger state and local tax (SALT) deduction. While the bill raises the cap from US$10,000 to US$30,000, some lawmakers are pushing for a US$62,000 individual cap and US$124,000 for couples.
- Concerns over the national debt are mounting. The nonpartisan Committee for a Responsible Federal Budget estimates the package would add US$3.3–5.2 trillion to the national debt over the next decade, depending on whether temporary measures are extended.
Next steps and Senate outlook
House Speaker Mike Johnson remains optimistic, stating: “I’m absolutely convinced we’re going to get this in final form and pass it.” However, with Republicans holding only a narrow majority in the House, even three defections could doom the bill.
If it does pass, the Senate will present another challenge. GOP senators are already signalling tweaks, especially around Medicaid cuts and SALT deductions—changes that could further splinter House support.
The White House, meanwhile, is urging swift passage. “This bill reflects the America-first agenda voters endorsed,” said Press Secretary Karoline Leavitt.
