What does Trump’s ‘big, beautiful’ budget bill mean for the US economy?

Donald Trump has muscled his massive budget bill through the House of Representatives — and it took just one single vote to get it done.

The legislation, which aims to extend expiring tax cuts and pour billions into border security, passed after weeks of infighting among Republicans.

Trump, from the White House, made it clear that delays weren’t an option. “We don’t need GRANDSTANDERS in the Republican party,” he said last week, as pressure mounted on holdouts.

According to the White House FACT SHEET, the bill is officially called the “One, Big Beautiful Bill Act” and stretches over 1,000 pages. It’s designed to lock in much of the 2017 tax law, a core part of Trump’s first presidency, and pairs that with sweeping cuts to welfare programs.

The president’s second-term agenda is now wrapped tightly around this legislation, and it’s heading straight for the Senate — where Trump’s allies hold only a narrow edge.

Trump’s bill extends tax cuts and slashes health funding

The bill would extend individual income tax reductions, increase the child tax credit, and remove federal taxes on tips and overtime pay. Trump had promised those changes during his re-election run, and he’s now trying to deliver.

Wealthier Americans stand to gain more from the estate and gift tax exemption hikes, while corporations will see fresh business tax breaks handed down across multiple sectors.

At the same time, Trump is also demanding more cash for the southern border. Over $50 billion is allocated to border security, including further wall construction with Mexico. This is the same wall Trump swore to complete, and the money’s now written into the bill.

But to pay for it, his party has gone after social programs. Republicans cut almost $800 billion from Medicaid, the government’s healthcare program for low-income Americans. Food stamps and clean energy tax credits were also gutted.

Universities and foundations would face new taxes on investment income, which the Joint Committee on Taxation estimates will raise over $22 billion. This is where the internal GOP fight got nasty.

House Republicans split hard on whether to touch health and welfare budgets. But Trump made it clear there would be no room for public defections, and he leaned in hard to get the final votes needed.

Now that it’s out of the House, the bill moves to the Senate, where 53 Republicans hold the majority. Trump needs at least 50 of them to vote yes. If just a few defects, the bill dies or has to be rewritten. Any changes would force it back to the House for another vote.

Debt surge triggers warnings, but Trump predicts growth

The financial hit from the bill is enormous. Experts at the University of Pennsylvania’s Wharton School and the Committee for a Responsible Budget estimate that it will add $3.3 trillion to national debt over the next decade.

That would push the debt-to-GDP ratio to 125% by 2035, way past the 98% level seen in 2024, and higher than any point since World War II. Maury Obstfeld, the former IMF chief economist now at the Peterson Institute, warned that the debt surge could damage the country’s financial standing.

“The bill could put the US Treasury on the road to triple-B status,” he said, referencing the US credit rating, which had already dropped days earlier.

Trump’s team says the bill will do the opposite. His Council of Economic Advisers predicts the plan will cut the fiscal deficit in half by the end of his term, from 6.4% to 3% of GDP. They also claim it will grow the economy by up to 5.2% over four years, create or save 7.4 million jobs, and raise investment by 14.5%.

But most outside analysts don’t think the math adds up. They admit the bill might give a short-term boost, but not enough to counter the debt spike.

Still, for Trump, the fight is about politics. His approval rating is currently 47.3%, and he’s betting this bill will help him climb higher. But the move is risky. In 2018, Democrats hammered Republicans over Trump’s original tax law and took back the House.

That could happen again. If the public sees this as another tax break for the wealthy, while gutting basic services, it could blow up in Trump’s face. But if he wins the Senate vote, he locks in years of lower taxes, and a signature second-term victory with his name all over it.

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