Trump's July 4 fireworks: One Big, Beautiful Bill signed - Here's what it means

Time of India

21 hours ago

US President Donald Trump (AP)
US President Donald Trump on Friday signed into law a major spending and tax bill, which includes key parts of his second-term agenda. The legislation, dubbed the "big, beautiful bill" by Trump, was passed by the US House of Representatives on Thursday just before the July 4 deadline.
The House passed the bill on Thursday with a narrow 218-214 vote, following its approval in the Senate on Tuesday, where it passed by a 51-50 margin. Vice President JD Vance cast the tie-breaking vote.
'Our Country is going to explode with Massive Growth, even more than it already has since I was Re-Elected,' Trump posted on Truth Social shortly after Vice President JD Vance cast the tiebreaking vote to send the bill back to the House.
At the heart of the "big, beautiful bill" is an extension of President Trump's 2017 Tax Cuts and Jobs Act, which was set to expire at the end of the year. The new legislation makes most of those tax cuts permanent and puts the spotlight on big-ticket agendas items, such increased funding for border security and food assistance programs, and major reductions in federal Medicaid spending.
The bill is partly funded through major cuts to healthcare and nutrition programmes, including Medicaid and the Supplemental Nutrition Assistance Program (SNAP).
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According to the congressional budget office, the bill could add $3.4 trillion to the federal deficit over the next decade and result in millions losing health insurance. However, Republicans and the White House have rejected those projections.
Here are some key provisions included in the Republicans' massive bill.
Slashing the Medicaid
The bill makes big changes to Medicaid, the health program for low-income and disabled Americans.
It adds work requirements for some adults and more frequent checks to stay eligible. The Congressional Budget Office says around 11.8 million people could lose coverage over the next 10 years.
Some proposals, like cutting Medicaid funding for undocumented immigrants and banning coverage for gender transition services, were removed after a Senate rules check.
Republicans also want to reduce a special tax states use to help fund Medicaid, but they delayed those cuts after pushback.
To address concerns about rural healthcare, the bill includes $50 billion to support rural hospitals.
Immigration and homeland security measures
The bill sets aside over $46.5 billion for building the border wall and related costs, and $45 billion to expand immigration detention facilities. It also provides about $30 billion for hiring and training staff for US Immigration and Customs Enforcement (ICE).
It includes a new $100 fee for asylum seekers, after a higher $1,000 fee proposed in the original House bill was removed following a Senate rules review.
Limits on food stamp benefits
The bill shifts some of the costs of SNAP (food stamps) to certain states. Right now, the federal government fully pays for the program.
Starting in 2028, states with error rates below 6% will keep full federal funding for SNAP benefits. But states with error rates above 6% will have to pay 5% to 15% of the costs, with some flexibility in how this is calculated.
The bill also changes the work requirements for able-bodied adults to qualify for SNAP.
Currently, adults aged 18 to 54 must meet work rules. The new rules raise the age to 64, with some exceptions for parents.
Alaska and Hawaii may get waivers from work requirements if they show they are trying to comply in good faith.
Raising the state and local tax (SALT) deduction
The bill raises the cap on the state and local tax deduction from $10,000 to $40,000, but only for five years, after which it will go back to $10,000. This was a key issue in the House, where some Republicans from high-tax states pushed for the increase.
Before the 2017 tax law, taxpayers could fully deduct state and local taxes from their federal taxes. Critics say this mainly helped wealthy homeowners in high-tax states like New York and California. However, supporters of the higher cap argue that the $10,000 limit now affects many middle-class homeowners dealing with rising property taxes.
Tackling the debt ceiling
The bill raises the debt ceiling by $5 trillion, more than the $4 trillion in the original House bill. Congress must address the debt limit by mid-July, as warned by treasury secretary Scott Bessent, who said the US might struggle to pay bills by August when Congress is on break. Including the debt ceiling in this bill allows Republicans to pass it with a simple majority through budget reconciliation, avoiding the usual 60-vote Senate requirement.