Trump's 'One Big, Beautiful Bill': What it does - Medicaid cuts, green funds rollback, reshapes tax system

Time of India

3 days ago

US President Donald Trump (File photo)
Republicans' massive new bill — called the 'One Big, Beautiful Bill' by US President Donald Trump — has officially passed Congress and is heading to his desk to be signed into law, likely on July 4.
A narrow victory in the House after heavy GOP push
The bill brings major changes to taxes, healthcare, immigration, and more. It passed the House by a narrow 218–214 vote after hours of debate and negotiation. Trump personally pushed for the bill, meeting lawmakers and posting encouragement online. It marks a huge win for him and GOP leaders, who used their full control of government after the 2024 elections to pass it quickly.
Permanent tax cuts and SALT deduction hike
The bill makes Trump's 2017 tax cuts permanent and adds new tax breaks for overtime pay and tipped workers.
It also increases the cap on state and local tax deductions (known as SALT) from $10,000 to $40,000 for five years. However, these tax cuts are expected to increase the federal deficit by $3.4 trillion over the next 10 years.
Big cuts to Medicaid
According to CBS News, the bill makes deep cuts to Medicaid, the government health program for low-income and disabled Americans. Nearly 12 million people could lose coverage due to new work requirements and more frequent eligibility checks.
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The bill also blocks Medicaid from covering gender transition treatments and providing care to undocumented immigrants in some states. To reduce state spending on Medicaid, the bill slowly lowers the amount states can raise through 'provider taxes.' In response to concerns from GOP senators, the bill adds a $50 billion fund to help rural hospitals affected by these cuts.
Food stamp program faces new restrictions
Food assistance also takes a hit. The Supplemental Nutrition Assistance Program (SNAP), or food stamps, will now require states to cover part of the costs if they have high error rates.
The work requirement age will also be raised from 54 to 64 for able-bodied adults. Some states like Alaska and Hawaii can apply for waivers.
Tougher immigration and border security meeting
On immigration, the bill provides over $46 billion for building the border wall, $45 billion to expand immigrant detention, and $30 billion to boost staffing and training at Immigration and Customs Enforcement. It also introduces a $100 fee for asylum seekers — down from $1,000, which was rejected by the Senate parliamentarian.
Green programs funds rollback
Another part of the bill targets clean energy. It ends tax credits for electric vehicles, home energy upgrades, and other green programs that were created under former President Biden's Inflation Reduction Act. It also shuts down the Greenhouse Gas Reduction Fund, though existing contracts will stay in place.
The bill raises the debt ceiling by $5 trillion to avoid a government default later this year. Treasury Secretary Scott Bessent had warned that the US could run out of money by August unless Congress acted.
There's also a change to the child tax credit. Instead of dropping from $2,000 to $1,000 in 2026, the credit will permanently increase to $2,200 — lower than what was proposed earlier.
Tax breaks for tipped workers
Meanwhile, tipped workers will be able to deduct up to $25,000 in tip income from federal taxes, though this benefit phases out for higher-income earners.
Trump celebrated the bill on social media and plans to promote it during a July 4 event in Des Moines, Iowa. Democrats, who voted unanimously against it, say the bill harms vulnerable Americans and helps the wealthy. They see it as a key issue to campaign on for the 2026 elections.