Congress Has Passed Trump’s Big Beautiful Bill—What’s in It?

The president’s signature policy bill implements tax cuts, reforms Medicaid and food programs, and boosts spending for the border and defense.

The U.S. Capitol building on July 1, 2025. Madalina Kilroy/The Epoch Times

Congress passed the One Big Beautiful Bill Act on July 3.

The mammoth bill, which is more than 940 pages, was the result of weeks of intraparty and bicameral negotiations among House and Senate Republicans. 

Once signed by the president, the legislation will implement sweeping changes to U.S. policy and funding over a 10-year period in order to carry out President Donald Trump’s second-term agenda. 

That includes making the 2017 tax cuts permanent; tax breaks on tips, overtime, and Social Security income; completing the border wall; $150 billion in defense spending; and repealing so-called green energy tax credits. 

Here are the main components of the bill.

2017 Tax Cuts Extended

The centerpiece of the legislation is its extension of the tax cuts initially included in the Tax Cuts and Jobs Act of 2017 during Trump’s first term in office.

That law slashed marginal tax rates across the board, with most brackets seeing around a 2 percent to 4 percent cut. If these cuts aren’t extended, tax rates will return to their pre-2017 levels at the end of fiscal 2025 on Sept. 30—an eventuality that Republicans are anxious to avoid.

Child Tax Credit Boosted

The bill would boost the child tax credit from $2,000 to $2,200, and make the credit permanent.

Taxes on Overtime, Car Loans, Tips Reduced

The bill would implement some of Trump’s core campaign promises on tax policy, reducing taxes on tips, overtime pay, and car loans.

Taxpayers would be allowed to deduct the first $25,000 in income earned from tips; up to $12,500 in income from overtime pay for single filers or up to $25,000 for joint filers; and up to $10,000 of car loan interest on American-made vehicles.

$6,000 Social Security Deduction for Seniors

Instead of Trump’s “no taxes on Social Security,” the bill would allow seniors to deduct $6,000 of their Social Security income, with that amount decreasing once income passes $75,000 for single filers or $150,000 for joint filers.

Single filers who make $175,000 or more, or joint filers with an income of over $250,000, will not be eligible for the deduction.

Funding Immigration and Border Security

The legislation would dedicate $150 billion toward immigration enforcement in line with some of the core promises Trump made on the campaign trail.

That includes nearly $30 billion for Immigration and Customs Enforcement, the agency largely responsible for carrying out Trump’s mass deportation operation, alongside $13.5 billion in grants for state and local governments who assist with the effort. The bill allocates $45 billion for the detention of illegal immigrants.

Another $46.5 billion is dedicated to the construction of a wall along the U.S.–Mexico border.

The funding will cover expenditures through the end of fiscal 2029.

Defense

The bill would appropriate $157 billion toward defense, with $29 billion going toward enhancing U.S. maritime capabilities and shipbuilding, $25 billion slated for munitions, and $25 billion dedicated to the “Golden Dome“ missile defense project.

The funding will cover expenditures through the end of fiscal 2029.

Clean Energy Tax Credit Cuts

Several clean energy tax credits included in the Inflation Reduction Act are being cut, beginning as early as 2025.

The electric vehicle tax credit would end on Sept. 30. Other clean energy projects, including hydrogen, wind, and solar, would need to be online by either Dec. 31, 2027, or Jan. 1, 2028, depending on the type of project, to retain their tax credits.

Medicaid and Rural Hospitals

The bill would seek to reduce Medicaid spending by imposing an 80-hour monthly work requirement for able-bodied adults to receive benefits.

It also reduces the “provider tax”—the rate at which states tax hospitals and doctors to pay for their Medicaid programs—from 6 percent to 3.5 percent in states that expanded Medicaid under the Affordable Care Act. Ten states that didn’t expand their programs will see no changes.

To offset fears that these changes would harm rural hospitals, the bill allocates $50 billion to support such facilities.

The bill would block abortion clinics from receiving Medicaid funding for one year.

SNAP Cuts

The bill would, for the first time, require states to contribute to the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps. The amount would vary based on a state’s payment error rate, but would fall between 5 percent and 15 percent.

However, Alaska and Hawaii can apply for a waiver from this provision if they are making a good-faith effort to reduce their error rates.

It would also increase states’ share of administrative costs to 75 percent, up from the current 50 percent rate.

$5 Trillion Debt Ceiling Increase

The bill would increase the U.S. debt ceiling by $5 trillion. This provision is one of the most pressing items in the bill as the Treasury approaches a default sometime in the coming months.

Paul and House conservatives have been outspoken in their opposition to such a steep increase in the debt limit.

$40,000 SALT Cap

One of the most divisive issues in crafting the bill has been the state and local tax (SALT) deduction, which was capped at $10,000 in the Tax Cuts and Jobs Act of 2017. The Senate bill will increase that cap to $40,000 annually, increasing by 1 percent for five years instead of the 10 years initially sought by its supporters as a compromise. Beginning in 2030, the cap will return to $10,000.

SALT allows tax payers to deduct a portion of their state and local taxes from their federal taxable income. The program is controversial with conservatives, who view it as favoring blue state taxpayers over those in comparably low-tax red states.

However, House moderates like Rep. Mike Lawler (R-N.Y.) have made an increased SALT cap a redline to win their vote.

Education Policies Tweaked

The bill would make several tweaks to federal education policy.

It would reduce Pell Grant eligibility for high-income students and students with a full ride. It proposes two federal student loan repayment plans, including one traditional repayment plan and one income-based repayment plan.

Additionally, it would tax college and university endowments at a variable rate—either 1.4 percent, 4 percent, or 8 percent—based on the institutions’ wealth.

What Was Cut

The Senate’s nonpartisan referee, parliamentarian Elizabeth MacDonough, ruled that many provisions in earlier Senate committee drafts of the legislation were ineligible for passage under the filibuster-proof reconciliation process. Had they not been cut, Republicans would need 60 votes to pass the bill.

Those provisions included one empowering states to enforce immigration law, multiple provisions related to the federal workforce, and a provision financially rewarding cost-cutting measures by government agencies.

Sen. Mike Lee’s (R-Utah) proposal to sell off federal lands, which caused a firestorm of controversy online, was also left out.

Another proposal to cut the $200 excise tax, and regulations on silencers and certain types of firearms, was also ruled ineligible for the reconciliation process.

During an amendment vote in the Senate, senators voted 99-1 to remove a 10-year ban on states from regulating artificial intelligence.

Republicans also removed a measure, dubbed a “revenge tax,” that would have let Trump impose taxes on foreign companies from nations that tax U.S. firms. Treasury Secretary Scott Bessent said that after negotiations, the provision was no longer necessary.

MacDonough also rejected a pay cut for Federal Reserve employees and a repeal of programs authorized by the Biden-era Inflation Reduction Act, among other rulings that would have to pass through the chamber as regular bills.