The tax cut and spending package proposed by US President Donald Trump has successfully navigated its last obstacle in Congress, with the Republican-majority House of Representatives narrowly voting in favor of the bill, sending it to the president for his signature.
The 218-214 outcome marks a notable success for Trump, providing funding for his immigration enforcement efforts, making the 2017 tax cuts permanent, and delivering new tax incentives he promised during his re-election campaign.
Additionally, this legislation reduces health and food safety net programs and eliminates numerous green energy incentives.
The White House confirmed that President Trump plans to sign the bill on Friday.
Despite apprehensions about the 869-page bill’s financial implications and its effects on healthcare programs, Republicans predominantly supported it, with merely two of the party’s 220 House members voting against it.
The Senate had already passed the bill by the tightest of margins.
Republicans claim that the legislation will decrease taxes for Americans of all income levels and boost economic growth.
Representative Virginia Foxx of North Carolina characterized the bill as offering “historic tax relief for working families, significant investments to secure our nation’s borders, capturing generational savings, and curbing waste, fraud, and abuse in government programs to improve efficiency.”
A sign placed in the House of Representatives following the bill’s passage.
Every Democrat in Congress opposed the bill, labeling it a windfall for the wealthy that would leave millions without insurance.
“The primary focus of this bill, justifying all the cuts that will negatively impact everyday Americans, is to provide massive tax breaks for billionaires,” stated Democratic Leader Hakeem Jeffries during an eight-hour and 46-minute speech, the longest in the history of the House of Representatives.
Throughout the process, President Trump applied pressure, persuading and warning politicians to deliver the legislation by the eve of the Independence Day holiday.
“FOR REPUBLICANS, THIS SHOULD BE AN EASY ‘YES’ VOTE. RIDICULOUS!!!” he expressed on social media.
Republicans expedited the process, working through the previous weekend and conducting all-night debates in both the House and Senate.
The Senate passed the bill on Tuesday with a 51-50 vote, with Vice President JD Vance casting the pivotal vote.
The Congressional Budget Office (CBO) reported that the bill would reduce tax revenues by $4.5 trillion (€38 trillion) over a decade, alongside cutting spending by $1.1 trillion (€936 billion).
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The majority of spending cuts originate from Medicaid, which provides health coverage to 71 million low-income Americans.
The bill seeks to tighten enrollment criteria, impose a work requirement, and restrict a funding mechanism utilized by states to increase federal payments—changes that are projected to leave nearly 12 million individuals without insurance, according to the CBO.
To address concerns about the impact on rural health providers, Republicans allocated $50 billion (€59 billion).
Non-partisan analysts concluded that the wealthiest Americans would reap the most significant advantages from the bill, while lower-income individuals would effectively experience income reductions as the safety-net cuts would outweigh their tax benefits.
Analysts noted that the increased debt burden imposed by the bill would essentially transfer wealth from younger to older generations.
In May, the ratings agency Moody’s downgraded US debt, citing the rising debt levels, with some foreign investors indicating that the bill makes US Treasury bonds less appealing.
Conversely, it averts tax hikes set to impact most Americans at the end of the year, when President Trump’s 2017 tax reductions were scheduled to expire.
Those tax cuts are now made permanent, with additional tax benefits for parents and businesses.
The legislation also introduces new tax incentives for tipped income, overtime pay, seniors, and auto loans, honoring Trump’s campaign pledges.
The bill’s final version features more substantial tax reductions and harsher healthcare cuts than the initial draft passed by the House in May.
During Senate discussions, Republicans removed a clause that would have prohibited state-level regulations on artificial intelligence and a “retaliatory tax” on foreign investments that had alarmed Wall Street.
