Unpacking Trump’s ‘Big Beautiful Bill’: What You Need to Know
Trump’s ‘Big Beautiful Bill’ includes lower taxes, harsher immigration controls, healthcare cuts, and a clean energy rollback. US President Donald Trump’s comprehensive tax and spending package—the One Big Beautiful Bill Act—successfully passed the Senate after Vice President JD Vance cast the deciding vote to break the tie.
Trump supporters have promoted it as a pro-growth and pro-worker blueprint, the nearly 900-page legislation has substantial implications for the federal tax policy, social programmes, border enforcement, and the national debt in the United States.
Here’s a detailed overview of what the bill includes—and the changes it would bring if enacted into law.
> Permanent tax reductions and additional deductions
The bill primarily focuses on a lasting extension of the 2017 Tax Cuts and Jobs Act, originally scheduled to conclude at the end of this year. The legislation secures reduced income tax rates, broadens the standard deduction, and prolongs several business-friendly provisions.
1. No tax on tips: Establishes a federal income tax exemption for tip income, capped at $25,000 annually. The benefit gradually decreases for individuals with earnings exceeding $150,000.
2. Standard deduction: Permanently increases the standard deduction, almost doubling the amount that filers can subtract from their taxable income.
3. Child tax credit: Raised from $2,000 to $2,200 per child. Now it requires just one parent to possess a Social Security number.
4. Social security income deduction: $6,000 income deduction for retirees earning under $75,000, along with a temporary $4,000 senior deduction (2025–28).
According to House estimates, these provisions represent over $4.5 trillion in tax reductions over the next decade.
To balance the tax cuts, the bill suggests over $1.2 trillion in spending cuts, primarily focusing on Medicaid and the Supplemental Nutrition Assistance Program (SNAP).
> Medicaid reforms
1. Work mandate: Beginning December 2026, able-bodied, childless adults are required to work or volunteer a minimum of 80 hours each month to be eligible.
2. Stricter work rules: Parents with children aged 15 and older would be mandated to meet the 80-hour monthly threshold.
3. Increased frequency of checks: Recipients are required to confirm their income and residency every six months.
4. Provider tax cap: Lowers the cap on provider taxes (utilized by states to finance Medicaid) to 3.5 percent from 6 percent by 2032.
5. Hospital fund: Rural hospitals will receive a $50 billion stabilization fund in light of funding cuts.
The Congressional Budget Office estimates that more than 11 million individuals may lose access to Medicaid if the bill is enacted.
> SNAP modifications
1. State cost-sharing: States exhibiting error rates exceeding 6 percent will be required to contribute 5–15 percent of SNAP costs beginning in 2028.
2. Expanded work requirements: Increases the age limit for work-eligible, able-bodied adults without dependents from 54 to 64.
3. State flexibility: States such as Alaska and Hawaii may obtain waivers if they show ‘good faith’ efforts to comply.
> Immigration and border security
The bill allocates $350 billion for border security and immigration enforcement, underscoring Trump’s primary domestic focus.
1. Wall construction: Designates $46.5 billion for the construction and upkeep of the wall along the southern border.
2. Detention capacity: Increases detention facilities, with $45 billion allocated for this initiative.
3. ICE staffing: Allocates $30 billion for the recruitment, training, and equipment of US Immigration and Customs Enforcement (ICE).
4. Asylum application fee: Implements a $100 fee for individuals seeking asylum. A previous House proposal to establish the fee at $1,000 was withdrawn following a Senate ruling.
> SALT deduction increase
The state and local tax deduction, known as SALT, is currently limited to a maximum of $10,000 according to existing legislation. The Senate bill raises this cap to $40,000, but it is applicable for just five years. Subsequently, the cap reverts to its former level.
This provision was included to address the concerns of Republicans from high-tax states, especially in the House, as reported by CBS News.
> Clean energy rollback
The legislation gradually eliminates the clean energy tax credits from the Biden administration, though at a slower pace than what the House had suggested. This has been a contentious issue for tech billionaire Elon Musk, who has indicated he may establish a new party if the bill is passed.
Companies initiating wind or solar projects in 2025 will continue to receive the full 100 percent of the current credit. Projects initiated in 2026 are allocated 60 per cent, while those starting in 2027 receive 20 per cent. Credits will cease completely in 2028. Projects that have supply chains connected to ‘foreign entities of concern’, including China, do not qualify for these credits according to both the House and Senate bills.
> Debt ceiling raised
The bill increases the debt ceiling by $5 trillion, surpassing the $4 trillion increase proposed in the House version. This provision aims to prevent a possible standoff regarding government borrowing later this year, as Treasury officials have cautioned that the US may exhaust its funds by August. Fiscal conservatives have expressed disapproval of this provision, labeling it a betrayal of Republican commitments to control spending.
> AI regulation clause has been removed
The initial bill contained a provision that would have barred states from regulating artificial intelligence (AI) upon receiving federal tech funding. A bipartisan Senate amendment eliminated that language due to increasing concerns regarding AI oversight at the state level.
This represents Trump’s most ambitious domestic policy initiative during his second term. The bill, presented as supportive of growth and the middle class, redirects federal priorities towards tax relief and immigration enforcement, sacrificing social safety nets and clean energy incentives in the process. Nonetheless, the projected deficit impact of $3.7 trillion has ignited criticism, even from within the Republican party.
