What’s In The Massive Tax Bill Passed By The House

The House narrowly passed President Trump’s “big, beautiful” tax and spending bill with some last-minute amendments yesterday. The 1,000+ page legislation provides significant tax breaks for mostly high-income families, seniors, and businesses, while adding roughly $4 trillion to the US debt and cutting green energy credits, Medicaid, and food stamps.

The details:

• The bill would temporarily bump up standard deductions, increasing individuals’ by $1,000 (to $16,000) while raising joint filers’ by $2,000 (to $32,000).
• There’s also a temporary $500 increase in the child tax credit, and all newborns would be given $1,000 in “Trump accounts.”
• The estate tax exemption would go up to $15 million, and seniors would get a $4,000 increase to their standard deduction.

Slashing Medicaid and SNAP. The package would cut Medicaid spending by ~$700 billion, which would likely cause 7.6 million Americans to lose their current healthcare. The bill would also strip $267 billion in benefits from SNAP, aka the food stamp program, which provides assistance to low-income Americans.

Green energy tax credits are gone. The $7,500 credit for a new EV and other federal initiatives incentivizing clean energy are no more. Solar stocks plummeted yesterday after the House approved the bill.

Student loan changes. The bill would cut $330 billion by eliminating some repayment options, including former President Biden’s SAVE Plan, which offers smaller payments than other plans. Many borrowers are already leaving the program while its fate is uncertain.

The Senate still has to approve. While Republicans in Congress cheered the bill they never thought would meet Speaker Mike Johnson’s Memorial Day deadline, it might be an uphill battle to meet the new goal: getting this thing to the president’s desk by July 4, as he requested. Republican Senator Josh Hawley has been rallying other Republican lawmakers to resist the planned Medicaid cuts. Plus, a last-minute provision increasing SALT caps—a tax break for primarily wealthier residents of high-tax states—could be on the chopping block, as some senators were rattled by Moody’s downgrade of the US’ creditworthiness based in part on unchecked spending.—MM