GOP Senate Pushes Through $3.3 Trillion Tax And Spending Overhaul
Vice President J.D. Vance cast the tie-breaking vote in a 50-50 split just before dawn, ending hours of high-stakes debate over a bill Republicans have branded the American Prosperity, Security, and Taxpayer Relief Act—but which Trump has repeatedly promoted as the "Big Beautiful Bill."
The legislation now heads to the House, where GOP leaders are aiming for final passage ahead of the July 4 recess. Inside the Bill: Tax Relief, Program Cuts, and Border Security
At the heart of the measure are permanent extensions to the 2017 tax cuts, a lower corporate tax rate of 17%, and fresh incentives for companies investing in U.S.-based manufacturing, artificial intelligence and advanced technology infrastructure.
To help offset the price tag, the bill slashes federal outlays on health care and social programs, including Medicaid, food assistance and student loan subsidies. Work requirements for recipients of federal aid would also expand under the plan.
Other major components include: $80 billion in new border security funding , earmarked for construction, surveillance, and expanded immigration enforcement.
, earmarked for construction, surveillance, and expanded immigration enforcement. A rollback of climate-related tax credits, including incentives for electric vehicles and clean energy projects.
A freeze on new federal hires and cuts to agency discretionary budgets. Reactions: Applause, Warnings and Dissent
Republicans hailed the bill as a "return to common-sense economics," arguing it would reinvigorate U.S. industry and rein in bloated federal programs. Senate Minority Leader Mitch McConnell called the legislation "a long-overdue course correction for a government that spends too much and delivers too little."
But Democrats and advocacy groups condemned the package, describing it as a handout to corporations at the expense of vulnerable families. Senate Majority Leader Chuck Schumer said the cuts would "gut the middle class in exchange for boardroom bonuses."
Even within GOP ranks, dissent emerged. Sen. Susan Collins (R-Maine) opposed the bill over cuts to health programs in rural states, while Sen. Rand Paul (R-Ky.) raised alarms about long-term deficit growth. Markets Cautious, Fed Eyes Inflation Risks
Investor sentiment was mixed Tuesday morning, as markets weighed the prospect of aggressive tax cuts against the risk of renewed inflation. The U.S. dollar slid to a multi-year low, while Treasury yields rose slightly in early trading.
Federal Reserve Chair Jerome Powell issued a brief statement warning that "unbalanced fiscal momentum" could complicate the central bank's ability to ease interest rates later this year.
On Wall Street, clean energy firms slipped on fears of subsidy losses, while cloud and AI-related stocks saw gains in anticipation of corporate tax relief and tech-focused incentives. Experts Divided on Economic Impact
Economists remain split on the bill's long-term implications.
"This is not just a tax cut—it's a reordering of federal priorities," said Angela Tse, a policy analyst at the Brookings Institution. "While it may boost near-term corporate activity, the social cost could be substantial."
Others argue the bill could deliver real gains for U.S. competitiveness, especially in the face of global economic shifts.
"If implemented effectively, it could position the U.S. as a dominant force in the next wave of innovation," said Mark Leighton, a senior economist at Deloitte.
However, early scoring from the Committee for a Responsible Federal Budget estimated that the legislation would add nearly $900 billion to the deficit over the next 10 years, even after accounting for reduced spending. A Political Stakes Game Ahead of 2025 Elections
With Trump expected to formally accept the Republican nomination in August, the "Big Beautiful Bill" has become a signature part of his pitch to voters: tough on immigration, friendly to business, and tough on what he calls "wasteful welfare."
Democrats have vowed to make the bill a central issue in swing states, targeting its effects on health care access, public education, and clean energy jobs.
House Republicans plan to bring the bill to a vote by Friday, hoping to avoid any internal splintering and give Trump a legislative win as campaign season intensifies.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Int'l Business Times
4 hours ago
- Int'l Business Times
Ukraine Left Scrambling After US Says Halting Some Arms Shipments
Ukraine appealed to the United States for clarity on Wednesday after it was caught off-guard by a White House announcement that Washington was halting some arms shipments to the war-battered country. The Ukrainian defence ministry, which is deeply dependent on US arms, said it had not been prior notified about the reduction in aid announced one day earlier. Moscow revelled in the decision, saying that it could bring the end of the war closer. Any slowdown in US support could harm Kyiv's ability to fend off escalating Russian aerial bombardments or frontline gains. Kyiv has long feared halts to US aid after Donald Trump returned to the White House in January, having criticised the tens of billions of dollars in support and weapons sent by his predecessor, Joe Biden. Ukrainian President Volodymyr Zelensky said in an evening address that Kyiv and Washington were clarifying details on supplies. "Continued American support for Ukraine, for our defence, for our people is in our common interest," he said. Washington's announcement prompted fear among Kyiv residents and warnings from experts that Ukrainian cities would be much more vulnerable to Russian air attacks. The US-made Patriot is now "a critical weapon which is impossible to get from Europe" and which Ukraine cannot substitute for now, said researcher Mykhailo Samus, director of the New Geopolitics Research Network, a Kyiv think tank. "Russian missiles will destroy Ukrainian cities" if Kyiv loses the ability to use Patriots, Samus told AFP. "It will be even more scary, even more painful, and even more civilians will suffer" if weapons supplies are reduced, Kyiv resident Yevgenia Prysiazhna told AFP, pointing to an increase in overnight drone and missile attacks on Ukraine. "I really hope that this is a temporary decision," the communications manager said. The foreign ministry summoned John Ginkel, the deputy chief of mission at the US embassy in Kyiv, in a rare diplomatic move that is usually reserved for foes and rivals, not vital allies, such is the uncertainty about what the cuts would mean for Kyiv. Politico and other US media reported that missiles for Patriot air defence systems, precision artillery and Hellfire missiles are among the items being held back. The White House had said that it was halting some key weapons shipments promised by the previous US administration, without elaborating. Under Biden, Washington spearheaded Western support for Ukraine, with Congress having approved more than $100 billion in aid, including $43 billion in weaponry. Trump instead has pushed the two sides into peace talks, including in phone calls with Russian President Vladimir Putin -- who rejected pleas for a ceasefire and demanded that Ukraine cede more territory if it wants Moscow to halt its invasion, which was launched in 2022. The US president has refused to announce new aid packages and Kyiv has been corralling Washington's European allies to step up their support. Kyiv remains "seriously dependent" on US arms supplies, a high-ranking source in the Ukrainian military told AFP. "Europe is doing its best, but it will be difficult for us without American ammunition," the source added. A May report by the Center for Strategic and International Studies (CSIS) said that Europe "had only made limited progress" in strengthening its defence industries. But it said that "continued US aid remains extremely important for Ukraine's long-term effectiveness on the battlefield." In Moscow, the Kremlin said that reducing weapons deliveries to Kyiv would help end the conflict. "The fewer the number of weapons that are delivered to Ukraine, the closer the end of the special military operation," Kremlin spokesman Dmitry Peskov told reporters in response to a question by AFP, using Russia's term for its more than three-year-long offensive. The White House told AFP in an email that the decision to reduce shipments was taken following a "review of our nation's military support and assistance to other countries". Kyiv said that it was caught off-guard by the move. The defence ministry said that the country had "not received any official notifications" on the issue. Russia ramped up attacks on Ukraine in June, launching nearly twice as many missiles and more than 30 percent more drones than in May, according to an AFP analysis of Ukrainian air force data. Kyiv was in June subjected to at least four fatal attacks that left more than 40 people dead. Its residents are worried that a cessation of US aid would leave the capital even more vulnerable. "We had gotten used to seeing America as a country of values, a country that defends democracy," Igor Stambol, a Kyiv resident, told AFP. "But there is hope that they will remember their values," the 36-year-old added. Moscow revelled in the decision, saying it could bring the end of the war closer AFP
Int'l Business Times
5 hours ago
- Int'l Business Times
AOC Tears Into 'Scam' Promise of 'No Tax on Tips' as Someone 'Who Has Lived Off of Tips': 'This Bill is a Deal With the Devil'
Rep. Alexandria Ocasio-Cortez (D-NY) railed against Republicans' signature "big, beautiful bill" on the House floor Wednesday, warning that its promise to end taxes on tips is a "scam" that won't protect low-income Americans from sweeping benefit cuts. "As one of the only people in this body who has lived off of tips, I want to tell you a little about the scam of that fine print," Ocasio-Cortez said. "The cap on that is $25,000." Britain and the EU have struck a deal to re-fashion a post-Brexit trade agreement with Northern Ireland that has become a significant political problem AFP Ocasio-Cortez contrasted the limited savings offered to tip workers with the expenses passed on to working families through tax increases for individuals making less than $50,000 and cuts to food assistance, Medicaid and other health coverage expansions. "You do the math," she said. "Is that worth it to you? Losing all your healthcare, not able to feed your babies, not being able to put a diaper on their bottom, in exchange for what?" "This bill is a deal with the devil," she emphasized, accusing Republicans of ballooning the national debt, gutting safety nets and giving tax breaks to billionaires. "We cannot stand for it and we will not support it. You should be ashamed." Currently, tips are treated as regular income on W-2 tax forms. President Donald Trump campaigned on the promise to end taxes on tips, an appealing prospect to the roughly 4 million workers who receive tips. However, about 40% of tipped workers are already exempt from federal income tax because they make less than the standard deduction, according to the Tax Policy Center. While eligible workers would receive an average cut of $1,700 each year, higher-income workers are posed to benefit the most. "The top 20% would receive an average tax cut of $5,768 ,while those in the bottom 20% would only get $74 on average," according to a Economic Policy Institute report that argues raising the minimum wage would have a greater impact on workers than the No Tax on Tips provision. The Senate narrowly passed the bill 51–50 on Tuesday, including the No Tax on Tips provision. Vice President JD Vance cast the tie-breaking vote that sent the bill back to the House with the goal of finalizing the legislation to present to Trump by July 4. Originally published on Latin Times
DW
5 hours ago
- DW
How will Trump's 'Big Beautiful Bill' impact Americans? – DW – 07/02/2025
The battle for President Donald Trump's "Big Beautiful Bill" appears to be nearing an end. But Trump's signature tax and spending policy isn't popular, even within his own party. Donald Trump's "One Big Beautiful Bill Act" has passed the US Senate and now only needs to be sent to his desk by the Republican-controlled House to be signed into law. It means the US president, who has long pressured Republicans to pass the bill, is now on the brink of an important legislative milestone and political victory. Much of his second term has so far been marked by executive orders, which are presidential instructions with the force of laws but which don't need the approval of Congress. But having this major spending and tax bill passed by Congress will finance a huge chunk of his presidential campaign promises. "I think, politically, this is a winner for Donald Trump, he can point to some sort of legislative success for his agenda," said Steven Webster, a political scientist at Indiana University in Bloomington. Trump has demanded the House pass the bill for him to sign by July 4 — suggesting his desire for an Independence Day themed victory lap — but there are still hurdles to overcome within his own party. "Some people dislike the bill because of the cuts to part of the American health care and safety net system," said Peter Loge, a political analyst at George Washington University in Washington, D.C. "Some people don't like the legislation because it adds a tremendous amount to the US debt. It's incredibly expensive." The big bill is a big attempt to check off Trump's long list of campaign promises. It includes a mix of individual and business tax cuts, massive cash injections to immigration controls, increased military spending and a ramping up of fossil fuel incentives. There are also changes to health and social program eligibility and a winding down of some of the climate transition initiatives introduced by former President Joe Biden. The winners, unsurprisingly, are policy realms that have been the foundation of Trump's "America First" mantra. A total of $178 billion (about €150 billion) in spending will go to programs intended to restrict immigration, including resuming the construction of Trump's Mexico border wall, as well as to staff and resource border police, immigration prosecutions, detention and criminal investigations. Around $153 billion will be spent on defense: shipbuilding, missile defense, nuclear weapons and supporting military assistance of the border. And after promising to "drill, baby, drill" during his campaign and in his victory speech — a call for fossil fuel extraction to be ramped up — the bill would simultaneously incentivize gas exploration and exports, while ending concessions and incentives for electric vehicles, clean energy and emissions reduction programs. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video There also tax cuts of about $4.5 trillion (€3.8 trillion) for individuals and business, which include Trump's pledges to stop taxing tips and overtime. "Nothing in this bill should be surprising," Loge said, "It promises to spend a lot of money capturing immigration concerns in the US... it would spent a huge amount of money strengthening our immigration system and finding and deporting people who are here without proper authorization. That's by-and-large popular among many people." In both houses, Republican leaders have been forced to balance the demands of holdouts — those unhappy with the measures contained within the bill. Debt is a major concern for fiscal conservatives. Nonpartisan analysts project about $3.4 trillion (€2.3 trillion) will be added to the US national debt over the next decade because of the bill. The debt limit has been raised by $5 trillion. The debt disquiet inside the Capitol has been echoed outside, most notably from one-time Trump ally Elon Musk. Prior to the Senate passing the bill, the world's richest person and the top donor to Trump's presidential campaign threatened to run candidates against Republicans who supported the measures during upcoming primary contests, and went as far to suggest he'd start his own "America Party" in opposition. "I think the party is likely to struggle to explain how adding three-and-a-half trillion dollars to the national debt is in line with their stated goal of getting the nation's fiscal house in order," said Webster. The bill is also unpopular with the public. According to a Quinnipiac University poll from mid-June, 53% of Americans support the bill and 27% don't (the rest didn't offer an opinion). Only two-thirds of Republican voters are in favor. Analysts DW spoke with said that when the content of the bill tends to be explained to voters, including Republicans, support declines. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Changes to health and social programs likely play a major role. New eligibility rules, particularly for the Medicaid scheme which extends health care coverage to low-income people, and the SNAP food aid program could see millions of people lose health insurance coverage by 2034, according to the independent Congressional Budget Office. In all, more than $1 trillion have been cut from health measures. "It's about 17 million that would lose coverage," said Elisabeth Wright Burak, a senior fellow at the Georgetown University Center for Children and Families, a nonpartisan research center. "Even if there are some sort of tax or other benefits, if you're losing your health insurance coverage, or you're losing your nutrition assistance, that's a hit to your [personal] bottom line." That could also hit important parts of Trump's MAGA base — including working Americans who have flipped their support to him during the last decade. While many of the health program changes have been made because of what Trump has called large scale "fraud and abuse" within the US public health infrastructure, many experts have argued the claimed attempt to cut fat from health care initiatives is hacking into muscle. "There's not a lot of fat in Medicaid," said Wright Burak. "Certainly there are things that could be improved, but most of that money is already going to health care services." Trump is expected to take a major hand in final negotiations with the Republican House representatives. According to The Associated Press, he has already met with moderate Republicans and is set to do the same with the conservative caucus.
