Republicans in the US House of Representatives approved a bill proposed by President Donald Trump early this morning, which includes tax cuts, spending cuts, and funding for border security.
House committees worked for months on the bill, which underwent late changes to curry favor with those who opposed some of its provisions. The bill is more than 1.000 pages long and has been called "One Big, Beautiful Act," a name given by Trump himself.
Republicans want to permanently implement cuts to personal income and inheritance taxes passed during Trump's first term, plus implement promises he made during the 2024 election campaign to not tax tips, overtime, and interest on some auto loans.
To partially offset the lost revenue, Republicans are proposing to repeal or speed up the repeal of clean energy tax credits enacted during Joseph Biden's presidency, which would help reduce the total cost of the tax component to about $3,8 billion.
There is also a temporary increase of $500 to the child tax credit, bringing it to $2.500 for 2025 to 2028. It then reverts to $2.000 and will increase to account for inflation. The inheritance tax exemption increases to $15 million and will adjust for inflation.
One of the thorniest issues in party negotiations was how much to increase the state and local tax deduction, which is now capped at $10.000. The bill raises the cap to $40.000 for incomes up to $500.000, with a gradual reduction in the cap for those with higher incomes.
Republicans would cut food assistance spending by about $267 billion over 10 years. Republicans are also expanding eligibility for food assistance. Under current law, working-age adults without dependents must be eligible to work until age 54, which would be changed to age 64 under the bill.
The centerpiece of the package is nearly $700 billion in spending cuts to the Medicare program. To qualify for Medicaid, there would be new "community engagement requirements" of at least 80 hours per month of work, education, or service for working-age adults without dependents.
The new requirements would take effect on December 31, 2026. People would also have to confirm their eligibility for the program twice a year, instead of just once.
Republicans want to save money with new work requirements. But Democrats warn that millions of Americans will lose health insurance. A preliminary estimate says the proposals would reduce the number of people with health insurance by 8,6 million over the next decade.
Republicans also want to block Medicaid funds from going to Planned Parenthood, which provides abortion services. Democrats say cutting off funding for the organization would make it harder for millions of patients to get cancer screenings and contraception.
The bill would provide $46,5 billion to revive construction of Trump's wall along the U.S.-Mexico border, and additional funding for the deportation program.
It includes $3.000 billion to hire an additional 5.000 Border Patrol agents and 2,1 new Customs and Border Patrol agents, as well as $10.000 billion in signing and retention bonuses. There is also funding for an additional XNUMX Immigration and Customs Enforcement officers and investigators.
It also provides nearly $150 billion in new funding for the Department of Defense and Homeland Security, which would provide $25 billion for Trump's so-called "Gold Dome for America," a long-anticipated missile defense shield.
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