House Passes Trump Tax Bill With 0.1% GDP Growth By 2030

The U.S. House of Representatives has passed a comprehensive tax cut bill, marking a significant legislative achievement for President Donald Trump. The bill, known as the “One Big Beautiful Bill,” encompasses a range of tax cuts and spending measures, including making permanent the tax cuts implemented in 2017, eliminating the tax on tip income, and increasing spending on immigration enforcement and border wall construction. The bill was passed with a majority in both chambers, with some adjustments made in the Senate to ensure its passage with a simple majority. After these changes, the bill was sent back to the House for a final vote and was approved in its final form.

The White House has announced that President Trump will sign the bill at midnight on Friday. The legislation aims to boost the economy in the short term through tax cuts on tips, overtime, car loan interest, and expanded state and local tax credits. However, economists are divided on the long-term economic impact of the bill. Bernard Yaros, chief U.S. economist at Oxford Economics, predicts that while spending will increase in the short term, these individual tax cuts will lead to price increases and limited economic growth in the long run. He also noted that the effects of cuts to social assistance programs such as Medicaid and SNAP, as well as the rollback of climate incentives, will be felt more clearly starting in 2026, with real GDP increasing by only 0.1 percent by 2030.

The Main Street Alliance, representing over 30,000 small businesses in the U.S., criticized the bill, stating that it surrenders the promise of freedom and justice to the interests of monopolies and billionaire donors, while working families continue to bear the financial burden. The International Monetary Fund (IMF) also expressed concerns, warning that the new tax law could make it harder to reduce budget deficits and public debt in the coming years. According to the IMF, the law would increase the budget deficit by $3.3 trillion, running counter to the goal of reducing debt in the medium term.

The bill includes significant changes to social safety net programs. It imposes new work requirements on able-bodied Medicaid recipients aged 19 to 64 who do not have dependents, with exemptions for parents or guardians of children under age 14 and those with disabilities. These work requirements are set to take effect in 2026. Additionally, the bill changes work requirements for adults who are part of the Supplemental Nutrition Assistance Program (SNAP), which could greatly reduce the number of eligible Americans. These changes will go into effect as early as this year. The bill also eliminates tax credits for buying electric vehicles starting on September 30 and tax credits for green home upgrades, such as solar power, at the end of the year. Tax breaks for businesses enacting green projects will end next year. The legislation also forces states to shoulder at least 5% of SNAP benefit costs starting in 2028, which is currently 100% federally funded. The SNAP cuts total an estimated $230 billion over 10 years.

The bill's current language staggers the start date for tax changes and the federal budget until after the November 2026 elections. Some provisions expire at the end of Trump's term in office. Health policy experts and health care workers say the biggest impacts will be felt through the closing of health centers throughout the country, especially in rural areas that were heavily funded by Medicaid. Others will lose coverage because of the work requirements and the additional paperwork required under the bill. The bill's passage in the House marks a significant milestone in the legislative process, but the impact of the bill will be felt over time. Some of the tax changes will go into effect this year and be reflected when Americans file their taxes in 2026. The bill's provisions on Medicaid and SNAP will have a significant impact on vulnerable populations, particularly those in rural areas and low-income families. The bill's passage is a major victory for President Trump and congressional Republicans, but the long-term effects of the legislation remain to be seen.