Signed and sealed, President Donald Trump's ‘Big Beautiful Bill' explained: Whose taxes are cut, who gets funding
Tax cuts in the bill
Since the legislation contains $4.5 trillion in tax cuts, Republicans say that the bill is significant as there would be a massive increase in taxes after December when tax breaks from Trump's first term expire. With this legislation, the existing tax rates approved in Trump's first term will become permanent.
The bill also boosts the child tax credit from $2,000 to $2,200, aligning with the "pro-life" stance of the Trump administration. It also introduces a deduction for older adults who earn no more than $75,000 a year, aiming to end taxes on Social Security benefits. Along with this, there are scores of business-related tax cuts aimed at boosting economic growth.
Also read: Trump signs his landmark 'Big Beautiful Bill' amid July 4 pomp, fireworks at White House
Funding national defense and deportation
The bill has provisions for funding the US's national security with around $350 billion. It also provides for 100,000 migrant detention facility beds, which will fuel Trump's promise of building the largest mass deportation centre in US.
Funds will also be provided for hiring Immigration and Customs officers. To help pay for these funds, immigrants will be faced with new fees when seeking asylum and protection.
Pentagon will also be provided billions for ammunition and quality-of-life measures for people working in defense services. Additionally, $25 billion would go towards the development of the Golden Dome missile defense system.
Also read: How Trump's 'Big Beautiful Bill' affects Indians: From sending money to making investments, and crossing borders
Cutback on Medicaid assistance for poor
To help offset the lost tax revenue and balance the new spending, the bill aims to cut the Medicaid and food assistance for people below the poverty line.
According to the Republicans, the safety net programs will serve the population they were designed for, instead of waste, fraud and abuse. For this, there is a proposed new $35 co-payment that can be charged to patients using Medicaid services. As per the Congressional Budget Office, if the bill is imposed, an estimated 11.8 million more Americans will become uninsured by 2034.
Slashes clean energy tax credits
Republicans are proposing to roll back the tax breaks earlier designed to boost clean energy projects. The tax breaks imposed during President Joe Biden focused on addressing climate change and lowering healthcare costs.
According to the bill, tax breaks for people who buy new or used electric vehicles would expire on September 30 of this year, instead of at the end of the year 2032 under current law.
Overall, according to the predictions of the Congressional Budget Office, the bill would increase federal deficits over the next 10 years by nearly $3.3 trillion from 2025 to 2034.
(With inputs from AP)
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