On Tuesday, the United States Senate narrowly approved a sweeping and controversial tax and spending bill that includes significant tax cuts, boosts to military and immigration enforcement budgets, and deep reductions in social welfare programs like Medicaid and food aid. Commonly referred to as the “Big and Beautiful Bill,” the legislation now moves to the House of Representatives for final approval.
What Changes Does the US Tax and Spending Bill Bring?
With the Senate passing this major fiscal package, the US financial and economic landscape is poised for noticeable changes.
1. Extended Tax Cuts and New Incentives
A central part of the bill is the extension of the 2017 Trump-era tax cuts, which continue to favor higher-income groups. The legislation also introduces new tax breaks for income earned from tips and overtime, valid until 2028.
Reports indicate that the wealthiest 1% of Americans will benefit the most from these tax cuts.
2. Increased Military and Immigration Enforcement Spending
The new bill significantly raises the US military budget and allocates more funds for immigration control efforts. This includes additional resources for expanding the border wall and hiring more personnel to enforce immigration laws.
3. Deep Cuts to Social Programs
One of the most controversial elements is the $930 billion reduction in funding for Medicaid and food assistance programs for low-income families.
According to the Congressional Budget Office (CBO), nearly 12 million people could lose their health insurance coverage under this plan.
4. Repeal of Clean Energy Incentives
The legislation also rolls back many clean energy incentives introduced during the Biden administration. This move aims to bolster traditional industries like oil and gas.
5. Impact on National Debt
The bill is expected to add around $3.3 trillion to the US national debt, according to CBO estimates. Additionally, the federal debt ceiling will be raised by $5 trillion to prevent a government default.
Opposition and Challenges in the House of Representatives
While the Senate has passed the bill, its journey in the House of Representatives faces serious hurdles.
Internal Republican Divisions
Some House Republicans, especially members of the Freedom Caucus (hardline conservatives), are demanding deeper spending cuts. Meanwhile, moderate Republicans express concerns over the bill’s impact on healthcare and social services in their districts.
Criticism from Democrats and Public Figures
House Democrats remain united in their opposition, calling the bill the largest assault on healthcare and nutrition services for low-income Americans in history.
Notably, Elon Musk, a former Trump supporter, has also criticized the bill, warning about its potential negative economic consequences and increased government spending.
Conclusion
The US tax and spending bill now awaits a critical vote in the House of Representatives. If passed, it will head to President Trump for signing. This legislation could reshape the US economy in the coming years—offering tax relief for high earners and boosting defense spending, while cutting back on healthcare and social programs for low-income citizens.
The final outcome of this major political process is expected in the coming days, just ahead of the July 4 Independence Day holiday.
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