What’s in Trump’s Massive Tax and Spending Bill That Just Passed Congress

WASHINGTON (AP) — In a major legislative win for Republicans, Congress has passed a sweeping tax and spending bill backed by former President Donald Trump. The nearly 900-page bill, which includes trillions in tax cuts and major shifts in federal spending, now heads to Trump’s desk—just in time to meet the GOP’s July 4th deadline.

Despite unified Democratic opposition, the final version passed the House in a tight 218-214 vote, after the Senate approved it with Vice President JD Vance casting the tie-breaking vote.

Here’s a breakdown of what’s in the bill—and when its key provisions will take effect.

Big Tax Cuts for Businesses, Families, and Seniors

At the heart of the legislation are roughly $4.5 trillion in tax cuts. Republicans say these measures are necessary to prevent a looming tax hike when Trump-era tax breaks expire at the end of the year.

Key Tax Provisions:

• Makes Trump’s first-term tax rates permanent

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• New deductions for tips, overtime, and auto loans

• $6,000 deduction for seniors earning under $75,000/year—part of Trump’s pledge to eliminate taxes on Social Security benefits

• Child tax credit increase from $2,000 to $2,200 (but many lower-income families won’t receive the full amount)

• State and local tax (SALT) deduction cap increases to $40,000 for five years

Businesses also benefit from expanded deductions:

• Immediate 100% write-offs for equipment and research investments

• Additional breaks for capital-intensive industries

However, the Congressional Budget Office (CBO) says the bill will save the wealthiest households about $12,000 a year, while it could cost low-income Americans $1,600 annually, largely due to cuts in Medicaid and food assistance.

Major Funding for Border Security and Defense

Trump’s bill funnels $350 billion into national security, with a sharp focus on immigration enforcement and military expansion.

Immigration & Border Security:

• Funding for 100,000 detention beds

• Hiring 10,000 new ICE agents with $10,000 signing bonuses

• Increased Border Patrol presence

• New fees for immigrants applying for asylum

Military Spending:

• Billions for shipbuilding and munitions

• $25 billion for the “Golden Dome” missile defense system

• $1 billion earmarked for border security operations by the Pentagon

Deep Cuts to Medicaid and Food Assistance Programs

To offset the tax cuts and spending hikes, Republicans are slashing public assistance programs. The bill tightens eligibility and imposes new work requirements.

Medicaid and SNAP Changes:

• 80-hour-per-month work requirement for many adults—including those up to age 65

• Parents with children over 14 must also meet work rules

• $35 copay for some Medicaid services

• States with high SNAP error rates will begin covering part of the cost starting in 2028

The CBO estimates that by 2034:

• 11.8 million more Americans could lose health coverage

• 3 million more people would no longer qualify for SNAP

Climate Programs Slashed, Fossil Fuels Boosted

In a sharp reversal of Biden-era climate policy, the bill guts renewable energy incentives.

What’s Being Cut:

• Clean energy tax credits for wind and solar rolled back

• Electric vehicle tax credits end September 30, 2025 (instead of 2032)

Meanwhile, tax credits will now cover metallurgical coal, essential for steel production—further supporting fossil fuel industries.

Democratic Sen. Ron Wyden called the move a “death sentence” for clean energy.

New “Trump Accounts,” Remittance Tax, and Culture War Add-ons

The bill includes several GOP wish-list items—many unrelated to tax or fiscal policy:

Notable Provisions:

• Trump Accounts: $1,000 savings deposits for children

• $40 million for Trump’s “National Garden of American Heroes”

• 1% tax on international money transfers

• Elimination of $200 tax on silencers and short-barreled firearms

• Temporary ban on Medicaid funds going to abortion providers like Planned Parenthood

• Expansion of compensation for nuclear exposure victims

Surprise Inclusions: Moon Missions, AI Moratoriums, and Rural Hospital Aid

Several last-minute additions and removals shaped the final bill:

• $50 billion over five years for rural hospitals (up from $25 billion)

• $88 million for pandemic response oversight

• Billions for NASA’s Artemis moon mission and Mars exploration

• A controversial moratorium on state AI regulations was removed after pushback from GOP governors

• New wind/solar taxes tied to Chinese components were stripped out

The Price Tag: $3.3 Trillion Deficit—Or Not?

According to the CBO, the bill would add nearly $3.3 trillion to the federal deficit over the next decade. But Senate Republicans argue that extending existing tax cuts shouldn’t count as new costs.

Using that logic, they claim the bill would actually cut the deficit by $500 billion—a view Democrats and fiscal watchdogs strongly dispute.

The Committee for a Responsible Federal Budget blasted the GOP math as an “accounting gimmick that would make Enron executives blush.”

Final Thoughts

While the bill checks off many long-standing Republican goals—tax cuts, defense spending, immigration crackdowns—it also stokes deep political divisions over the future of federal safety nets, climate policy, and fiscal responsibility.

The true impact of the legislation will unfold in the coming months—but one thing’s clear: this isn’t just a budget bill. It’s a bold statement of the GOP’s agenda heading into 2025.