Big, Beautiful Bill Would Add $3.8 Trillion to the $36.9 Trillion U.S. Debt
The House passed a significant budget bill in the wee hours of the morning that would add $3.8 trillion to the U.S. debt of $36.89 trillion. The chamber voted 217-212 on final passage at 2:30 a.m.
“The House has passed generational, truly nation-shaping legislation,” House Speaker Mike Johnson said.
Trump’s party, the Republicans, control both chambers of Congress. They have a 220-212 majority in the lower chamber. Next, the Senate will take up the measure. It is divided on a 53-47 margin.
‘Big and Beautiful’ Basics
Called “The Big, Beautiful Bill,” H.R. 1 is 1,100 pages long. A summary of it is available through Congress.gov here. For details to changes to federal spending, see the CBO.
On the revenue side, it would provide $3.77 trillion in tax cuts over the next 10 years. It make Trump’s 2017 business tax cuts permanent. Though 2028, it would provide tax breaks for tips, overtime pay, and interest on car loans. It would increase the standard tax deduction by $1,000 for individuals and $2,000 for joint filers. It would temporarily increase the child tax credit. It would raise the estate tax exemption rises to $15 million. To secure passage, leaders added a few changes an increase in the state and local tax deduction.
Spending: Cuts to Medicaid and Food Aid, Increases on Security
It would reduce government spending on food aid through the Supplemental Nutrition and Assistance Program by about $267 billion over 10 years. It would add work requirements for Medicaid, repeal clean energy tax cuts enacted by the Biden Administration. The 10-year reductions in federal spending through the Energy Department would be $900 billion. The Education Department would be cut by $349 billion over the same period.
Meanwhile, it would provide more money for Armed Services, the Judiciary, largely border and immigration control, and Defense. Homeland Security would receive $69 billion more money this year. Reuters reports it would “adding tens of thousands of border guards and creating the capacity to deport up to 1 million people each year.”
Babies and Guns
The Associated Press reports the bill would provide incentives for making babies. The “federal government will contribute $1,000 for babies born between Jan. 1, 2024 and Dec. 31, 2028.” The accounts for kids would be called “Trump Accounts.”
Also, in a reward to the NRA would eliminate a $200 tax on gun silencers. The AP says that tax on gun silencers has existed since Congress passed the National Firearms Act in 1934.
Debt and Deficits
It is a legislative victory for President Donald Trump, who proposed many of the changes. However, it comes as global investors are reassessing their views of the U.S. economy. On Wednesday, markets witnessed a selloff in the U.S. long-term debt market that made interest rates rise. Today, the 20- and 30-year Treasurys traded at 5.136 percent and 5.128 percent.
