Trump Bill Offers $4.5 Trillion Tax Cuts, $3.3 Trillion Debt Increase

Trump’s “Big Beautiful Bill” is a comprehensive tax-and-spending package that has significant implications for taxes, social programs, border security, and the federal budget. The bill extends and expands the 2017 Trump tax cuts, making most provisions permanent, including lower rates for individuals and businesses. This results in a total of $4.5 trillion in tax reductions over a decade, with new breaks for income from tips, overtime, and auto loans. The State and Local Tax (SALT) deduction cap is raised from $10,000 to $40,000 for five years, benefiting taxpayers in high-tax states. The child tax credit is increased from $2,000 to $2,200 per child, though low-income families may not receive the full benefit. Immediate expensing for business equipment and research is made permanent, benefiting capital-intensive industries. Middle-income households would see tax cuts of $500–$1,500 per year, while the wealthiest benefit the most; the lowest-income households could see losses of up to $1,600 annually.

The bill also includes significant cuts to social safety net programs. Medicaid and the Supplemental Nutrition Assistance Program (SNAP) face substantial funding reductions. Able-bodied adults aged 19–64 in Medicaid expansion states must work, volunteer, or study 80 hours per month, and parents of children aged 14 and above are included in this requirement. Eligibility for federal benefits is narrowed for noncitizens, with new restrictions and application fees for programs like asylum, work permits, and humanitarian parole. Clean energy tax credits and subsidies are rolled back or eliminated.

In terms of border security and defense spending, the bill allocates $350 billion for border and national security. This includes $46 billion for the U.S.-Mexico border wall, $45 billion for 100,000 migrant detention beds, and funding for the largest deportation campaign in U.S. history. Additionally, the bill provides for the hiring of 10,000 new Immigration and Customs Enforcement agents.

The Congressional Budget Office projects that the bill will add $3.3 trillion to the national debt over the next decade, with the U.S. debt currently at $36.2 trillion. Other notable provisions include a pilot program called “Trump accounts,” which gives babies born between 2025–2028 a $1,000 government-funded investment account, with parental contributions allowed. The bill also includes changes to the student loan program and the elimination of some clean energy incentives.

Food assistance and health coverage for low-income Americans are reduced to help offset the cost of tax cuts and new spending. The bill still needs final reconciliation between House and Senate versions before it can become law. The bill's impact is significant, with high-income households, some families with children, businesses, and sectors benefiting from border and military spending being the winners. The losers include Medicaid and SNAP recipients, low-income Americans, many immigrants, and clean energy industries.