Last week, President Donald J. Trump and Republicans in Congress did something many political observers believed improbable: despite extraordinarily slim margins in the House and Senate, they used the reconciliation process and corralled competing factions within the party to pass a comprehensive piece of legislation that includes nearly every major legislative priority for Republicans in time for the president to sign it on the Fourth of July.
After months of negotiations, drafts, amendments, “Byrd baths,” unanimous Democratic opposition, inter-party skirmishes, the longest House floor speech in history (8 hours and 44 minutes by House Minority Leader Hakeem Jeffries [D-NY-8]), a close House vote, a tied Senate vote, another close House vote, and loads of lobbying, Trump’s One Big Beautiful Bill (OBBB) Act is now law.
The 870-page law (text available here) will impact citizens, immigrants, non-profit organizations, small businesses, and large corporations, particularly in relation to taxes, health and social welfare programs, immigration and national defense, and energy. Below, we offer a summary of some of the most important changes you should expect as a result of this wide-ranging legislation.
PERSONAL TAX CUTS
Makes permanent the tax cuts included in Trump’s 2017 Tax Cuts and Jobs Act, which were set to expire this year
Increases the standard deduction by $750 ($1,500 for married joint filers) and is adjusted for inflation in future years
Eliminates taxes on tips (under $25,000/year) and overtime (under $12,500/year)
Allows tax deductions for car loan interest for vehicles assembled in the U.S.
Increases the child tax credit by $200/child
Effectively eliminates taxes on Social Security benefits by allowing every senior over age 65 to deduct up to $6,000/year (the senior must have modified gross adjusted income of up to $75,000).
Increases the deduction limit for state and local taxes (SALT) from $10,000 to $40,000.
BUSINESS TAX CUTS
Extends 100% bonus depreciation for qualified property acquired and placed in service after Jan. 19, 2025
Restores the ability to permanently deduct domestic research or experimental expenditures paid or incurred after Dec. 31, 2024.
Expands Biden’s CHIPS Act tax credits from 25% to 35% for domestic advanced manufacturing
HEALTH AND SOCIAL WELLFARE PROGRAMS
Provides $50 billion for a rural hospital stabilization fund
Prevents non-citizens from enrolling in or receiving benefits from Medicaid.
Requires states to contribute more to the Supplemental Nutrition Assistance Program (SNAP) and adds work requirements for able-bodied SNAP enrollees who do not have dependents
Decreases Medicaid spending by $930 billion over 10 years
Adds work requirements for able-bodied Medicaid enrollees who do not have dependents or disabilities
Requires re-enrollment every 6 months, as well as income and residency verifications
Prevents federal funding to organizations (including 501(C)(3) nonprofit organizations) that are primarily engaged in providing reproductive health or abortion services
IMMIGRATION AND NATIONAL DEFENSE
Adds $150 billion budget increase to the US military for a wide-ranging set of priorities, including increasing domestic shipbuilding and munitions capacity, a “Golden Dome” national missile defense system, and quality of life improvements for US service members
Provides $46.5 billion for the southern border wall, $45 billion to expand detention capacity for immigrants in custody, and $30 billion to U.S. Immigration and Customs Enforcement (ICE) to hire and train 10,000 more ICE officers
Provides $13.5 billion to reimburse state and local governments for border security and immigration enforcement activities since January 20, 2021
Adds a $100 fee for foreign nationals seeking asylum in the US
ENERGY
Rescinds remaining unobligated funding for much of the green energy programs created by former President Biden’s Inflation Reduction Act (IRA), including the Green and Resilient Retrofit Program (GRRP) and State-Based Home Efficiency Contractor Training Grants
Eliminates tax credits for EVs
Reverses restrictions on oil and gas leases on public lands imposed by the Biden Administration
Significantly increases the availability of oil and gas drilling permits on public lands and in the Gulf of America
Reduces the royalty rate for oil and gas production on public lands from 16.67% to 12.5%
OTHER MAJOR PROVISIONS
Increases the national debt limit by roughly $5 trillion, giving Congress and President Trump roughly 2 more years before needing to raise the limit again
Provides $12.52 billion to modernize America’s air traffic control infrastructure
Provides up to $150 million for events to celebrate the country's 250th anniversary held on public lands
Provides $150 million to allow National Laboratories to partner with American industry to ensure AI can process DOE’s existing scientific data
The team at Bridge is standing by to help you answer any questions about how the OBBB will affect your organization. As always, please let us know if we can help.
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