When the U.S. Senate approved a different version of President Donald Trump’s “big, beautiful bill” than the one the U.S. House sent over, there was some question of what kind of pushback House members might have against Senate changes.
Turns out there was very little. After a couple of marathon sessions, the House approved the bill largely along party lines (two Republicans voted against it) and Trump signed it into law on the Fourth of July.
Since then, the focus has been on what’s actually in the bill. For instance:
The bill, which the nonpartisan Congressional Budget Office said will add some $3.8 trillion to the U.S. federal deficit from 2026 to 2034, unlocks tax cuts and increases funding for national security, partly paid for by the biggest cut to the federal social safety net in decades, according to a report from CNN.
What’s in the law
Key provisions of the legislation include:
- Making permanent the 2017 tax cuts from Trump’s first term. While it will cut taxes on average, it’s a move that will benefit high-income households the most, according to an analysis from USA Today.
- The law permanently increases the child tax credit and creates “MAGA” savings accounts for children under eight.
- The law adds some $170 billion for immigration enforcement, including nearly $52 billion to build a wall on the southern border and another $45 billion to build detention centers for Immigration and Customs Enforcement.
- The legislation cuts nearly $1 trillion from Medicaid. The CBO esimates changes to Medicaid could cause as many as 7.6 million Americans to lose health insurance over the next 10 years.
- The law also cuts $267 billion in federal spending for Supplemental Nutrition Assistance Program, known as SNAP or food stamps, according to the CBO. It would impose work requirements on those age 55 to 64 who benefit from the program, which provides food assistance to about 42 million Americans.
- The law signed by Trump also includes provision for no taxes on tips or overtime, but there are limits. The first $25,000 of tips are tax-deductible through 2028 with a $150,000 income limit.
Similarly, no overtime wages would be taxed, but only the first $12,500 of extra overtime pay is tax-deductible through 2028 with $150,000 income limit.
- Extends current law to continue to allow student loans discharged due to death or disability to perhaps qualify to be excluded from gross income. The new law continues that potential exemption.
- Allows distributions from 529 accounts – a savings plan for education expenses – to be used for expenses in connection with enrollment or attendance at an elementary or secondary school (the law doesn’t cover private or religious schools).
- The law raises the cap on State and Local Tax Deductions (SALT) to $40,000. It includes a 1% raise each year, but only until 2029. After that, the cap drops back to $10,000.
According to an analysis by Forbes, businesses get a few breaks in the new law, including:
- Pass-Through Entities. Owners of pass-through companies and sole proprietors are currently taxed at their individual tax rates, less a 20% deduction (to lower the rate) for business-related income, subject to certain wage limits and exceptions. This provision, referred to as the Section 199A deduction, was set to expire at the end of 2025. The new law makes it permanent.
- The Pass-Through Entity Tax (PTET) Deduction remains largely as it was before according to Forbes.
Senator Elissa Slotkin, a Democrat from Michigan, decried the measure as a way for Republicans to give “the wealthiest among us … a tax break.”
“No matter which way you slice it – health care, energy, housing – the President just rammed through a bill that will make Michiganders pay in every part of their lives,” Slotkin said in a statement. “History will not be kind to this bill.”
U.S. Rep. John James, a Republican from Michigan who has announced a bid for governor, said the legislation “delivers on the promises … made in 2024.”
“We’re cutting taxes on tips and overtime, protecting Social Security, rebuilding American manufacturing and putting an end to handouts for illegal immigrants and able-bodied adults who won’t work,” James said in a statement. “This bill secures our border, strengthens our economy and keeps our word to the American people.”
