On July 3, House Republicans passed President Donald Trump’s “One Big Beautiful Bill”, a multi-trillion dollar spending package that extends the tax cuts he enacted during his first term and puts billions of dollars toward national security and deportations.
These plans are largely funded by a $1.2 trillion cutback to Medicaid and food aid benefits, and a major rollback of clean energy tax credits. Trump previously said he would not cut Medicaid.
The Congressional Budget Office, a nonpartisan bookkeeper for Congress, estimated that the bill will add $3.3 trillion to the national deficit over the next 10 years, and leave 11.8 million Americans without health insurance.
The bill passed on a vote of 218-214, with two Republicans and all Democrats opposed.
Here are some of the major changes to come.
Tax Breaks, Mostly for the Highest Earners
Trump’s bill extends the $4.5 trillion in tax breaks from his Tax Cuts and Jobs Act (TCJA) of 2017, which was set to expire at the end of this year. The TCJA lowered taxes for most U.S. households, with the largest cuts for the highest-income families.
Tax experts found that over 45% of the benefits of extending the TCJA go toward households in the top 5%, who earn more than $450,000 a year.
The Congressional Budget Office estimated that the wealthiest households will save an average of $12,000 a year, while the poorest households will pay an additional $1,600, mostly due to reductions in Medicaid and food aid.
The bill adds various new tax breaks for businesses, temporary deductions on tips, overtime, and auto loans, and a $6,000 deduction for older adults who earn less than $75,000 a year.
It also increases the child tax credit from $2,000 to $2,200, though millions of lower-income households will not be able to get the full amount. Families that earn less than $2,500 and do not owe federal income taxes are not eligible for the child tax credit.
Work Requirements for Medicaid and Food Stamps
Trump’s bill cuts about $1 trillion from Medicaid, the largest cut to the program in U.S. history.
The bill requires childless adults without disabilities to document 80 hours of monthly work to qualify for benefits, adds a new $35 co-pay, and requires states to conduct eligibility redeterminations every six months instead of 12.
All adults aged 18 to 64 will need to show proof of work to qualify for the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps. The program is now restricted to U.S. citizens and lawful permanent residents.
The Congressional Budget Office predicted that these work requirements will result in nearly 12 million Americans losing their health coverage by the end of the decade, and 3 million SNAP recipients losing their benefits.
More ICE and Military Spending
Trump’s bill allocates $350 billion for border and national security. It increases the U.S. military budget by $150 billion, used for shipbuilding efforts and for Trump’s “Golden Dome” space-based missile defense project.
ICE will receive $100 billion to double migrant detention capacity and hire 10,000 new officers, making it the nation’s largest law enforcement agency. Immigrants will help fund these efforts by paying new or increased fees when applying for asylum.
Rollback on Clean Energy
Trump’s bill phases out several clean energy tax credits implemented by former President Joe Biden’s Inflation Reduction Act of 2022, and funds tax breaks for the coal and oil sectors instead.
It ends a $7,500 tax credit for consumers who buy or lease electric vehicles, and $4,000 for used ones, as well as various tax breaks for consumers who make their homes more energy efficient.
These changes could drive up household energy costs by $165 a year and lead to 8 million fewer EV car sales this decade, analyses from Princeton University found.
Caps on Student Loans, and Fewer Payment Options
Trump’s bill scraps several repayment plans for student loans and restricts how much money students can borrow, with a lifetime cap of $257,500. It also eliminates the unemployment and economic hardship deferments, which allow borrowers to pause their payments during periods of financial difficulty.
Borrowers can now only enroll in a standard or income-based repayment plan, which analysts say could increase costs by $2,929 per year and keep people in debt for longer.
The bill also eliminates grad PLUS loans, which allowed graduate students to borrow the entire cost of their attendance not covered by other financial aid. Graduate students are now capped at $20,500 per year in federal loans, and $100,000 lifetime.
Students of professional degrees, like medical or law school, can borrow up to $50,000 per year and $200,000 lifetime. Parent borrowing through the Parent PLUS loan program is capped at $20,000 per year per student and $65,000 lifetime.
Planned Parenthood Defunded
Planned Parenthood, the country’s largest provider of reproductive health care, has been stripped of its Medicaid funds under Trump’s new bill.
Over one million Medicaid patients a year rely on Planned Parenthood for services like birth control, STI tests, and cancer screenings.
The organization sued the Trump administration on July 7 to prevent what they say will shutter 200 of its 600 clinics.