One Big Beautiful Bill Act

Background

Following the 2024 United States elections, in which the Republican Party retained the House of Representatives and won the Senate, Republicans began negotiations on passing then-president-elect Donald Trump's domestic policies. In a meeting with Senate Republicans in December 2024, Senate majority leader John Thune outlined an approach involving initial legislation on border security, energy production, and the military while reserving tax policy. Trump, in contrast, advocated for a singular bill to resolve an impending lapse in tax cuts implemented in the Tax Cuts and Jobs Act in 2017. However, this strategy faced risks from defecting members.

In January 2025, Republicans met in Fort Lesley J. McNair. At the meeting, Speaker of the House Mike Johnson stated that Trump sought "one big, beautiful bill" to enact his policies. To more easily pass the bill, Republicans chose to use the budget reconciliation process, which allowed them to avoid the 60-vote Senate filibuster, which carried importance as they hold 53 seats out of 100 in the Senate. This requires the House and the Senate to pass identical instructions before passing the actual reconciliation bill.

Before being signed into law, the Senate approved the bill 51–50 on July 1, 2025, with Vice President JD Vance casting a tiebreaking vote in support. It passed the House of Representatives, 218–214, on July 3, 2025. It passed over universal Democratic opposition in both houses.

Provisions

The One Big Beautiful Bill Act includes hundreds of provisions, and over a ten-year period is estimated to add roughly $3 trillion to the national debt and to cut approximately $4.46 trillion in tax revenue.

Individual income taxes

The law permanently extends the individual tax rates Trump signed into law in 2017, which were set to expire at the end of 2025.

The law creates a new tax deduction of up to $12,500 ($25,000 if married filing jointly) of qualified overtime pay, effective January 1, 2025.

Qualified overtime pay is compensation that an employer is required to pay an employee under the Fair Labor Standards Act, Section 7 because the employee worked more than 40 hours during the same workweek. The employee may take a tax deduction only for the extra half-time pay above their usual hourly rate they are paid for working more than 40 hours during the same workweek, not all the pay they receive for working those hours. Overtime paid that is either paid voluntarily by an employer, is paid based on contractual agreements, or is only required by state or local laws is not eligible for the tax deduction. Overtime pay continues to be subject to Social Security tax and Medicare tax.

The deduction begins to phase out for individuals whose modified adjusted gross income is more than $150,000 (or $300,000 if married filing jointly), and is eliminated at $400,000 (or $550,000 if married filing jointly).

Individuals may take a tax deduction for the amount of qualified overtime compensation that appears on their Form W-2, which employers will be required to include on it. Employers may use a reasonable method to approximate the amount to put on a Form W-2 for 2025, or via an alternate method. The Internal Revenue Service will release new procedures for federal tax withholding effective 2026.

The law creates new tax deductions for tips of up to $25,000 per year received by workers earning less than $150,000, with the tax deduction set to expire in 2028.

In order to be eligible, a tip must be paid voluntarily by the payor, and the payor must determine the amount of the tip. The payor must not be subject to a penalty if they do not pay a tip, and the tips must not be subject to any negotiation.

Business income taxes

Public companies are not allowed to take a tax deduction for compensation paid to certain executives that exceeds $1 million per year. Effective tax years beginning after December 31, 2026, the compensation paid to the five most highly compensated executives is expanded to all members of a covered corporation's controlled group and affiliated service group. The tax deductible portion of compensation is allocated to each control group member based on the pro-rata portion of the compensation paid by that member.

For qualified production property of a taxpayer, the law makes permanent a 100% Section 179 depreciation deduction for the adjusted basis for the property acquired after January 19, 2025.

Businesses are allowed to take a section 179 tax deduction for the cost of certain business property, software, leasehold improvements, and water utility property rather than deduct only the amount depreciated each year. Under the law, the maximum tax deduction is permanently increased from $1 million to $2.5 million and then phased out to $4 million, all of which will be indexed for inflation in future years. These changes are effective for tax years beginning after December 31, 2024.

The law also created a new depreciation allowance for nonresidential real property that is used as an essential part of an activity that includes the manufacturing, production, or refining of certain tangible products that significantly transforms the product. Types of property that do not qualify include nonresidential real property used for offices, administrative services, lodging, parking, sales activities, software development, and software engineering. The property's construction must begin between January 20, 2025, and December 31, 2028, and it must be placed in service in the U.S. or U.S. possessions on or before December 31, 2030.

The law allows full expensing of domestic research and experimentation expenditures for tax years beginning on or after January 1, 2025.

The law allows businesses to hold an election to amortize domestic research and experimentation expenditures that are otherwise capitalized (other than property that would be depreciated or depleted) over a five-year period.

Tax-exempt organizations

Effective in 2026, certain tax-exempt organizations must pay an excise tax on compensation exceeding $1 million paid to any current and former employee, rather than only to its top five most highly compensated employees for current and prior years.

The law changes the excise tax on the investment income of tax-exempt educational institutions. There are three different excise tax rates, and the highest excess tax rate is 8 percent. The excise tax rate depends on the institution's ratio of its investment assets to its eligible students. Institutions with higher ratios are subject to higher excise tax rates.

The law increases taxes on investment income from college endowments, estimated to raise $761 million over 10 years. Colleges with more than 3,000 students and an endowment per student ratio of $500,000 would be taxed starting at 1.4%, with the tax rate increasing to 8% for the wealthiest colleges. The original House bill proposed a tax of up to 21% with no exemptions based on size. An exemption for religious colleges was removed for violating the Byrd Rule.

Health and welfare

The law reverses aspects of Medicare's price negotiation program, allowing more drugs to be purchased without negotiation and increasing costs for consumers. The Congressional Budget Office estimated $5 billion in lost savings for the government over ten years.

The law establishes a $50 billion Rural Hospital Fund, up from $25 billion, to support health care providers in rural areas, providing a safety net against Medicaid cuts; and it authorizes CMS to approve new Medicaid HCBS waivers to allow non-nursing-home-eligible persons to participate.

The law cuts over $1.2 trillion in federal spending, primarily from the low-income health insurance program Medicaid and the nutrition funding program SNAP. The law:

Cuts the Medicaid provider tax, which helps states fund their Medicaid costs, from 6% to 3.5% by 2031;

Adds work requirements for Medicaid recipients for the first time, with individuals ages 19 to 64 required to work at least 80 hours per month, and this requirement can also be met through volunteer work or school. Some exemptions exist for adults with dependent children ages 14 and under and those with medical conditions.

Requires states to charge enrollees in Medicaid expansion states with family incomes between 100 and 138 percent of the federal poverty level up to $35 for each health care service, if they qualify for Medicaid based on income alone.

Requires states to check eligibility of people on Medicaid expansion every six months instead of annually;

Prevents expansion states from using state contributions to pay Medicaid providers higher prices than Medicare would pay;

Requires minimum staffing ratios for nursing homes;

Requires a five-year waiting period for green card holders before applying to Medicaid, and reduces retroactive Medicaid payments from three months to one month;

Trump accounts and contribution pilot program

The law creates Trump accounts, a type of tax-advantaged savings investment account.

Any individual is allowed to contribute to a child's account, up to $5,000 per year per child. Employers are allowed to contribute to their employees' accounts and their employees' children's accounts, up to $2,500 per year. Contributions by an employer count against the $5,000 annual limit per child, but contributions by the federal government do not. As an exception to the annual limit, tax-exempt organizations are allowed to contribute an unlimited amount into a child's account.

Contributions into a child's account are allowed until the end of the end of the year in which the child turns 18.

The federal government will contribute $1,000 into a Trump account for each U.S. citizen child with a social security number who was born between January 1, 2025, and December 31, 2028.

Funds in the account must be invested in mutual funds or exchange-traded funds that mirror the S&P 500 or another U.S. stock index. Investment earnings are tax-deferred.

A child with a qualified disability is allowed to rollover the funds into an ABLE account when they reach age 17.

For other children, rollovers and withdrawals from the account are allowed starting on the January 1 of the year in which the child turns age 18. When the child reaches age 18, the funds will be rolled into a traditional IRA.

Contributions by the federal government or an employer are tax-exempt (i.e., they are not taxed as income of the child when they are deposited), while contributions by the child or their parents are neither tax-exempt nor tax-deductible (i.e., they are taxed as income of the child or a gift to the child and they come from after-tax funds of the giver).

Limits on green industrial policy

The law phases out tax credits passed in the Biden-era Inflation Reduction Act. Credits will continue for wind and solar projects which either start construction by June 2026 or which go online by December 2027, under "safe harbor" and expanded "foreign entity of concern" provisions. The OBBBA directed the Treasury Department to issue more stringent standards for documenting supply chains and construction of solar and wind facilities in August 2025. The OBBBA also severely limits the credits' transferability in dedicated markets. Electric vehicle tax credits would be phased out by September 2025, and EV charging tax credits would be phased out by June 2026.

Green hydrogen production credits are terminated by December 2027, rather than 2033. Home electrification credits are terminated by December 2025. Advanced manufacturing, carbon sequestration, biofuel, and nuclear power credits remain largely intact (nuclear power even gets a new 10% bonus credit), subject to the aforementioned foreign entity of concern rules. Fees on methane emissions that polluters have to pay the government would be postponed for 10 years, while tax credits for biofuels would be extended an additional four years to 2031.

The law also rescinds various funds, appropriated in the IRA. These include:

freeway removal incentives,

heavy-duty alternative fuel vehicle grants,

grants for training contractors to perform home electrifications,

grants for environmental justice promotion,

grants for improvements to state and local environmental impact assessment capacity, and

the EPA's green bank, the Greenhouse Gas Reduction Fund.

Provisions on agriculture

The law rescinds unobligated IRA funding for the Conservation Stewardship Program, Environmental Quality Incentives Program, Agricultural Conservation Easements Program, and Regional Conservation Partnership Program, and adds it to the USDA budget baseline. The OBBBA outlaws climate action-related goals for agriculture. The law also lifts income caps on households that rely on agriculture for more than 75% of their income, potentially empowering corporate farming.

The law raises reference prices under the Price Loss Coverage and Agricultural Risk Coverage programs, resulting in $54 billion in additional spending over 10 years. The law increases spending on crop insurance programs by $6.3 billion over 10 years and disaster relief programs at USDA by $2.9 billion in the same timeframe.

Leasing and sale of public lands

The law requires the leasing of at least 50% of public lands that private companies desire to lease for drilling, mining or logging. It cuts the royalties (the share of revenue) that the petroleum industry has had to pay for oil and gas extracted from public lands—costing taxpayers around $6 billion over a decade. It cuts the fee per acre that oil and gas companies have had to pay for initiating leasing of public lands. The law reinstates "noncompetitive leasing" of public lands for drilling, mining or logging that allows companies to purchase at a cheap price public lands that were not sold at auction.

Over the next decade, the law requires four lease sales to oil and gas companies of lands inside Arctic National Wildlife Refuge, and six lease sales in the National Petroleum Reserve-Alaska along Alaska's northern coast.

The law requires the Bureau of Land Management to hold quarterly onshore oil and gas lease sales.

Debt ceiling

The law raises the United States debt ceiling by $5 trillion.

Military defense features

The defense portion of the law allocates an additional $150 billion in defense spending. This figure includes:

$29 billion for shipbuilding;

$25 billion for a proposed "Golden Dome" missile defense system;

$25 billion for munitions;

$25 billion for various infrastructure and housing improvements.

$25 billion for the U.S. Coast Guard;

$16 billion for military innovation and artificial intelligence, including money for kamikaze drones, uncrewed aircraft systems, drone boats, and underwater drones;

$15 billion for nuclear deterrence; and

$12 billion for improving military operations in the Indo-Pacific.

Border security

The law includes $170 billion for spending on border security, creating the capacity to deport up to one million people each year.

The law increases the funding for Immigration and Customs Enforcement from $10 billion to more than $100 billion by 2029, making it the single most heavily funded law enforcement agency in the federal government. These funds include:

$46.5 billion to build a wall on the United States–Mexico border;

$45 billion over four years in order to add 100,000 new migrant detention beds. This is a 365% increase in Immigration and Customs Enforcement's budget for detentions;

$29.9 billion to Immigration and Customs Enforcement for hiring new agents and covering transportation and deportation costs, with the aim of hiring 10,000 new officers;

$17.3 billion to support state and local law enforcement with border enforcement;

$10 billion to reimburse the Department of Homeland Security for costs related to border security;

$7.8 billion for hiring Border Patrol agents and vehicles, with the aim of hiring 3,000 new agents;

$6.2 billion for border technology; and

$3.3 billion for hiring immigration judges and staff.

Asylum fees and immigration

The law establishes a $100 annual fee to apply for asylum, down from $1,000 in the House bill, a $550 fee to apply for employment authorization for asylum seekers and migrants on humanitarian parole or temporary protected status, and a $500 fee to apply for temporary protected status. It also increases the fees for non-immigrant visas to $250.

Student loans

The law:

Pauses a rule issued under the Biden administration to cancel student loans if schools engaged in deceptive recruiting;

Caps unsubsidized student loans for graduate students at $20,500 per year and $100,000 lifetime;

Caps student loans for students seeking professional degrees, such as medical school or law school, at $50,000 per year and $200,000 lifetime, and eliminates graduate PLUS loans;

Establishes a lifetime student loan borrowing limit of $257,000;

Restructures income-based repayment programs; and

Expands Pell Grants to cover workforce-training programs.

Expansions to 529 education cost plans

A 529 plan will be allowed to distribute funds for the cost to attend an elementary or secondary school, including a public, private, or religious school, after July 4, 2025. Eligible costs include tuition, curriculum and curricular materials, books, instructional materials, online educational materials, and tuition for certain tutoring or educational classes outside one's home.

A 529 plan will be allowed to distribute funds for eligible costs of a state and federal licensing program, an industry certification program, or a registered apprenticeship program after July 4, 2025. Eligible costs include tuition, fees, books, supplies, required testing, and continuing education needed to maintain the credential.

Employee benefits

As of January 1, 2026, the employer-provided childcare credit (26 U.S.C. § 45F) is increased from 25% to 40% (or 50% for eligible small businesses) of qualified childcare expenses. The maximum employer-provided childcare tax credit is increased from $150,000 to $500,000 per year (or $600,000 for eligible small businesses).

The act also expands qualified childcare expenses to include contracted third parties that provide childcare to the employees.

The annual limit for a dependent care flexible spending account is increased from $5,000 per year (or $2,500 if married filing separately) to $7,500 (or $3,750 if married filing separately).

The temporary tax credit for employers who give paid leave to an employee while they are on Family and Medical Leave Act leave has been made permanent.

In order to qualify for the tax credit, the employer must pay the employee at least 50% of the employee's usual wages. The amount of the tax credit used to be equal to 12.5% of eligible wages paid to an eligible employee, but it now increases by 0.25% for each percentage point paid above the 50% threshold, up to a maximum credit of 25%.

In order to be eligible for the tax credit, the employee must have worked at least six months for the employer, which is up from 12 months previously.

Paid family and medical leave that is required under state or local law is now eligible for the tax credit, as are employer-paid amounts for qualifying paid leave insurance policies.

Food or beverage provided to employees on certain fishing vessels or certain fish processing facilities for the employer's convenience is 100% tax deductible to the employer, up from 50% previously.

Employer-paid moving expense benefits were temporarily considered taxable income to the employee, but they are now permanently taxable income. Moving expense benefits for employees who are active-duty members of the U.S. Armed Forces or members of the U.S. Intelligence Community continue to be tax-free to the employee.

1099 reporting

A payor must report payments for goods or services via payment apps, online marketplaces, and payments from credit, debit, or gift cards to the Internal Revenue Service and the payee on Form 1099-K. The law changes the threshold for reporting; now reporting on Form 1099-K is required if a person received at least 200 transactions and received at least $20,000.

The law increases the reporting threshold for Form 1099-MISC and Form 1099-NEC from $600 to $2,000 in 2026. The threshold will be adjusted for inflation for future years.

Miscellaneous

The law contains the following additional provisions:

Provides a $12 billion boost in air traffic control funding;

Provides a new $10 billion for NASA. This includes $700 million for a Mars Telecommunications Orbiter (a project which had initially been cancelled in July 2005); $2.6 billion for the Lunar Gateway space station; $4.1 billion for the development of the Space Launch System rockets for the Artemis IV and Artemis V missions; $20 million for the Artemis IV Orion spacecraft; $1.25 billion for International Space Station operations throughout 2030; $325 million for the US Deorbit Vehicle; $1 billion for improvements at five NASA centers ($120 million for Stennis, $250 million for Kennedy, $300 million for Johnson, $100 million for Marshall, and $30 million for Michoud); $85 million to transfer a space vehicle to a field center that is involved in the administration of the Commercial Crew Program (aimed at moving Space Shuttle Discovery to the Johnson Space Center);

Halves funding for the Consumer Financial Protection Bureau.

Provides $40 million for the National Garden of American Heroes;

Requires the FCC and NTIA to identify and auction 600 MHz of the electromagnetic spectrum between 1.3 and 10 GHz by 2034, potentially raising up to $85 billion;

Reduces the $200 tax levied on the manufacture or transfer of firearm silencers and short-barreled rifles on the National Firearms Act to $0, effectively eliminating the tax levied on those items;

Expands the Radiation Exposure Compensation Act to people affected by nuclear development and testing; and

Repeals the international package de minimis entry privilege, which allowed shipments under $800 to enter the U.S. tariff-free.

Eliminates penalties for noncompliance with Corporate Average Fuel Economy standards.

Legislative history

Budget framework negotiations

Initially, on February 21, 2025, the Senate approved S. Con. Res. 7 by 52–48, intended to be the first of two reconciliation instruction bills. The resolution allowed for a future reconciliation bill containing $175 billion for immigration and border enforcement, $150 billion for the military and would not extend the 2017 Trump tax cuts. Senator Rand Paul of Kentucky was the only Republican to oppose the resolution. The Senate intended to allow the House to pass reconciliation instructions first. At the time of the bill's passage, the House faced opposition to its one-bill approach from fiscally conservative members.

On February 25, 2025, the House of Representatives approved H. Con. Res. 14 by a 217–215 vote. The resolution would allow Republicans to pass a budget containing tax cuts while reducing federal spending. The resolution would also allow Congress to raise the debt limit by $4 trillion. The resolution was briefly pulled due to opposition from fiscally conservative Republicans Thomas Massie of Kentucky, Tim Burchett of Tennessee, Warren Davidson of Ohio, and Victoria Spartz of Indiana. Leadership convinced all but Massie to support the resolution, and the vote happened as scheduled. Initially, some moderate Republicans also expressed opposition over the possibility that the resolution would necessitate cuts to Medicare and Medicaid. In the end, Massie was the only House Republican to vote against the resolution.

In the early hours of April 5, 2025, the Senate approved an amended version of H. Con. Res. 14 by a 51–48 vote. The Senate budget resolution calls for $4 billion in spending cuts, significantly lower than the $1.5 trillion in cuts called for by the House. The Senate resolution also calls for a $5 trillion raise in the debt limit, $1 trillion more than the House resolution. The House and the Senate resolutions would each extend Trump's 2017 tax cuts.

Republican senators Susan Collins of Maine and Rand Paul of Kentucky joined all Democratic senators in opposing the resolution. After the vote, Reuters reported that non-partisan analysts believe that the resolution, if enacted as currently written, would add $5.7 trillion to the national debt of the United States over the next 10 years. Republicans argue that the extension of the 2017 tax cuts, which expire at the year's end, should not be counted as new debt, which means that only $1.5 trillion would be added to the national debt over the next 10 years.

First House passage

Following markups by various House committees on their relevant portions of the bill, the House Budget Committee met on May 16, 2025, to combine the various markups into a single reconciliation bill. Some fiscally conservative Republicans opposed the bill over a desire for greater spending cuts, and the bill was rejected in a 21–16 vote, with representatives Chip Roy of Texas, Ralph Norman of South Carolina, Andrew Clyde of Georgia, and Josh Brecheen of Oklahoma joining all Democratic committee members to vote against it. Republican Lloyd Smucker of Pennsylvania changed his vote from yes to no so that he would be allowed to bring a motion to reconsider the bill at a later time.

On May 18, the Budget Committee voted to advance the bill in a 17–16 vote. Roy, Norman, Clyde, and Brecheen changed their votes to present after House Republican leadership agreed to make Medicaid work requirements—previously scheduled to begin in 2029—kick in sooner and decrease future subsidies for clean energy. Despite this, the four Republicans said they would not support the bill's final passage unless more changes were made. Republicans did not secure these votes until May 21, when the bill was amended.

On the morning of May 22, the United States House of Representatives passed OBBBA by a vote of 215–214–1, mostly along party lines. Fiscally conservative Republicans Thomas Massie and Warren Davidson broke from their party to vote against the bill. Freedom Caucus chair Andy Harris of Maryland voted present. Republicans David Schweikert of Arizona and Andrew Garbarino of New York did not vote on the measure. House Democrats unanimously opposed OBBBA.

On June 10, Republicans announced that they would amend OBBBA through a procedural rule. By using a procedural rule to amend the bill, Republicans voting against amendments would also be voting against consideration of other, unrelated bills. The rule passed, 213–207, with Massie the only present Republican to vote against the rule.

The narrow passage of OBBBA led to internal backlash and division in the Democratic Party. Three elderly Democratic representatives (Raúl Grijalva of Arizona, age 77; Sylvester Turner of Texas, age 70; and Gerry Connolly of Virginia, age 75) died in the first five months of 2025. If any of the three had been alive when the vote was taken, the result of the vote could have been different. The vote "quickly reignited an intraparty debate about gerontocracy and aging politicians clinging to power".

Senate passage

Following the House passage of OBBBA, the bill moved to the Senate for consideration.

The Republican-led Senate amended the bill. Fiscally conservative Republican Senators (nicknamed "deficit hawks") such as Ron Johnson of Wisconsin, Rick Scott of Florida, Mike Lee of Utah, and Rand Paul of Kentucky, pushed for deeper spending cuts. Moderate Republicans such as Susan Collins of Maine, Lisa Murkowski of Alaska, and Jerry Moran of Kansas, along with populist Josh Hawley of Missouri, expressed concerns about Medicaid cuts. Other moderates such as John Curtis of Utah and Thom Tillis of North Carolina, along with Murkowski and Moran, expressed concerns over the end of green energy tax credits. Defense hawks such as Mike Rounds of South Dakota were opposed to spectrum auction provisions in the bill.

Democrats in the Senate sought to use the Byrd Rule, which prevents reconciliation from being used to pass "extraneous" measures in bills which increase federal spending in the Senate, in order to strip certain provisions from the bill. Democrats argued that the extension of Trump's 2017 tax cuts, a proposed 10-year ban on state level AI regulations, language that limits the power of federal court to enforce contempt of court citations, a provision to end a tax on the manufacturing of gun silencers, a provision to defund Planned Parenthood, a provision banning Medicaid from funding gender-affirming care for people of all ages and a provision to streamline permits for fossil fuel projects, violated the Byrd Rule.

Senate majority leader John Thune set a goal of passing the Senate's version of OBBBA by July 4, 2025.

On June 20, 2025, the Senate parliamentarian, Elizabeth MacDonough, ruled that several provisions from the Senate committees on Banking, Environment and Public Works, and Armed Services violated the Byrd Rule and could not be included in a 50-vote reconciliation bill. The bill will no longer be able to include a funding cap on the Consumer Financial Protection Bureau, $1.4 billion in pay cuts to Federal Reserve staff, a $293 million cut in funding for the Office of Financial Research, the elimination of the Public Company Accounting Oversight Board, a repeal of portions of the Inflation Reduction Act, a repeal of the Environmental Protection Agency's "multipollutant emissions standards" for certain vehicles built after the 2026 model year, and a provision to cut funding for the Department of Defense if spending requests are not made on time.

Second House passage

The House of Representatives needed to pass the Senate version of the OBBBA for the bill to reach the President's desk. On July 1, 2025, President Trump and Senate majority leader Thune expressed confidence that the bill would pass in the House. House Republican moderates such as David Valadao and Young Kim of California, and Jeff Van Drew of New Jersey, who are against Medicaid cuts, Nick LaLota of New York, who is against SALT changes, and fiscal conservatives such as Chip Roy and Keith Self of Texas, who oppose federal deficit increases, had expressed opposition by June 30 to the bill in its then-current form.

The House Rules Committee voted 7–6 on July 1, 2025, to advance the bill to the floor. Fiscal conservative Republicans Chip Roy and Ralph Norman voted against advancing the bill. Usually, the members of the majority party on the Rules Committee always vote to advance the bill to the floor.

A procedural vote on July 2, 2025, while negotiations were ongoing off the House floor, was the longest vote in House history.

In the early morning of July 3, 2025, the House approved the final procedural rule vote 219–213. The vote, which began on the evening of July 2, was initially opposed by five Republicans: moderate Brian Fitzpatrick of Pennsylvania and fiscal conservatives Victoria Spartz of Indiana, Andrew Clyde of Georgia, Keith Self of Texas, and Thomas Massie of Kentucky. Eight other fiscal conservative Republicans, including Tim Burchett of Tennessee and Chip Roy of Texas, withheld their votes. After hours of negotiations with President Trump and Speaker Johnson, all but Fitzpatrick flipped their votes to advance the rule.

Starting at 4:52 a.m., House minority leader Hakeem Jeffries delivered a lengthy speech using the "magic minute" to delay the passage of the bill, eventually breaking the 8 hour and 32 minute record set by Kevin McCarthy in 2021.

On July 3, the House of Representatives passed the Senate version of the OBBBA in a final mostly party-line vote of 218–214. Republican moderate Brian Fitzpatrick and fiscal conservative Thomas Massie, along with all Democrats, voted against the bill.

Removed provisions

The following provisions were at one point included in the bill, but were removed:

Before OBBBA was passed, it contained a provision which would prevent federal courts from using appropriated funds to enforce findings of contempt of court for non-compliance with any court injunctions or court-issued temporary restraining orders, if no bond is posted by plaintiffs;

The House-passed version of the OBBBA included a 10-year moratorium on state-level enforcement of any law or regulation regulating artificial intelligence (AI). This was removed in a 99–1 vote after it became clear that it would not pass;

An excise tax on solar and wind energy projects was added in the Senate, and then removed;

A raised tax on foreign investments after opposition from Treasury Secretary Scott Bessent;

A proposal from Senator Mike Lee to sell millions of acres of federal land in the Western United States; and

A proposal to stop payments to Affordable Care Act plans that pay for abortions outside of cases involving rape, incest, or danger to the life of a mother.

Additionally, many provisions in the House bill were removed to comply with the Byrd rule in the Senate. These included:

The official short title of the bill;

A ban on pharmacy benefit managers using spread pricing;

A ban on the use of federal funds in Medicaid, the Children's Health Insurance Program (CHIP) and the Affordable Care Act from being used to pay for gender-affirming care for adults and children (the Crenshaw Amendment) starting in 2027;

Impact

National debt

The Congressional Budget Office (CBO) initially estimated that the OBBBA would add $2.4 trillion to the national debt of the United States by 2034. The CBO later raised the estimated increase in the budget deficit to $2.8 trillion.

Risk to the social safety net

CBO estimates OBBBA would cause 10.9 million Americans to lose health insurance coverage. The bill's cuts to Medicaid were the largest in the program's history and put rural hospitals at risk of closure with one clinic attributing their announced closure to the bill. The loss of coverage for millions of Americans is expected to strain the finances of hospitals, nursing homes, and community health centers, which will be left to absorb more of the cost of treating the uninsured. Further CBO analysis released August 11, 2025, estimated that the highest 10% of earners would see incomes rise by 2.7% by 2034 mainly due to tax cuts, while the lowest 10% would see incomes fall by 3.1% mainly due to cuts to programs such as Medicaid and food aid. Analysis of the bill by the CBO and multiple think tanks found it to be one of the most regressive bills in decades.

The Center for a Responsible Federal Budget estimates that the bill will accelerate the estimated insolvency of Social Security and Medicare by one year. Experts have argued that the bill would create the largest upward transfer of wealth from the poor to the rich in American history due to large-scale benefit cuts paired with tax breaks for high-income earners and corporations.

Clean energy roll-back

The bill was described by The New York Times as derailing renewable energy production and research in the United States, and possibly ceding the clean energy race to China. Its policies favor fossil fuel companies over renewable energy such as solar, wind, and EV manufacturing, and are expected to lead to large clean energy job losses, factory closures, and deter investment in clean technologies. Specifically, the law phases out most clean-energy tax incentives introduced under the Biden-era Inflation Reduction Act such as credits for low-carbon electricity (wind, solar), electric vehicle rebates, home electrification, clean hydrogen, and domestic manufacturing of batteries and solar panels. The law rescinds various IRA funds for grants related to freeway removal improving biking and walking in poorer neighborhoods, electric truck and bus manufacturing, faster state and local environmental reviews and place-based green industrial policy and home electrification.

An April 2026 study projected the IRA's impact on clean energy investments would be nearly wiped out by the OBBBA, and emissions would be reduced by only 34 percent below 2005 levels, compared to 44 percent with the IRA. A report released by environmental group BlueGreen Alliance found that the OBBBA caused 223 manufacturing and clean energy projects to stall or be cancelled, affecting over 111,000 jobs and $82.9 billion in investment. A July 2026 estimate by the group E2 found that the OBBBA had eliminated a projected 467,000 jobs for green-collar workers and caused a $68.2 billion reduction in capital investments, with grid storage batteries and solar power being the most affected industries. However, Lily Bermel of Columbia University, writing for MIT that same month, estimated that 67-74 percent of the clean energy production gains spurred by the IRA would be retained due to robust domestic demand, though the most adversely affected sector would be onshore wind.

Expanded immigration enforcement

The U.S. government has allocated unprecedented funding to ICE for detention facilities, deportation operations, and additional funds to hire new agents. The law allocates ICE with more funding than any federal law enforcement agency in U.S. history, and more than the federal prison system. The expanded ICE funding is expected to lead to mass detentions and deportations, restricted access to asylum, and anticipated economic and humanitarian consequences.

Education access

The law adds new accountability rules for colleges and expanded grant eligibility to short-term training programs, eliminates subsidized graduate loans, sets an annual limit on unsubsidized graduate loan amounts, and restructures income-driven repayment plans that could raise monthly payments and delay loan forgiveness. In K–12 education, it established the Federal Education Freedom Tax Credit Program, a federal tax credit for donations to private school scholarship funds. Critics warned the law could reduce college access for low-income and working students, divert public funds to private schools, and increase pressure on under-resourced school systems. Proponents characterized it as an important victory for school choice at the national level.

Reception

Public perception

Multiple polls were conducted in June 2025 with general skepticism and disapproval from Americans.

According to a Pew Research poll, 49% of Americans opposed the bill, 29% were in favor of the bill, and 21% were unsure.

According to an IPSOS-Washington Post poll, 42% of Americans opposed the bill, 23% were in favor of the bill, and 23% were unsure.

According to a Fox News poll, 59% of Americans opposed the bill, 29% were in favor.

According to KFF, 64% of Americans opposed the bill, 35% were in favor.

NPR noted that the bill's passage fulfilled several of Trump's campaign promises, but also violated his promise not to touch Medicaid benefits. CNN described its passage as made possible despite intraparty opposition as an example of "Trump's iron grip on his own party" and an "omnipresent" effort to get Republicans on board despite its unpopularity with the American public.

In June 2026, nearly one year after the bill's passage, a Navigator Research poll found that 34% of Americans approved of the law, 53% disapproved, and 13% were unsure.

Support

According to the White House's website, whitehouse.gov, more than 200 organizations have stated their support for the OBBBA, including AT&T, Comcast, American Airlines, Delta Air Lines, the National Retail Federation, and the National Taxpayers Union.

Trump has claimed that the bill is the "single most popular bill ever signed", a claim that CNN disputed, saying "That is an up-is-down reversal of reality. ... While polls can be off, this bill wouldn't be popular – let alone the most popular US bill ever signed – even with a massive and widespread polling error."

Opposition

The Atlantic, CNBC, The New York Times, and Vox argued that the bill would create the largest upward transfer of wealth from the poor to the rich in American history, with Fortune and CNN nicknaming it the "Reverse Robin Hood Bill", Senate Minority Leader Chuck Schumer (D-NY) mockingly called the bill the "We're All Going to Die Act", alluding to comments made by Republican Senator Joni Ernst (R-IA) at a town hall.

Public health and policy researchers at Yale University and the University of Pennsylvania sent a letter to Senate leaders warning that cuts to health programs in the bill would lead to over 51,000 preventable deaths annually.

Many Democratic and legal organizations have shared warnings about the expansion of immigration enforcement. Rep. Alexandria Ocasio-Cortez shared, "I don't think anyone is prepared for what they just did with ICE. This is not a simple budget increase. It is an explosion—making ICE bigger than the FBI, US Bureau of Prisons, DEA, and others combined. It is setting up to make what's happening now look like child's play. And people are disappearing."

The nonpartisan think tank Energy Innovation found that the bill's efforts to dismantle clean energy incentives would cost more than 830,000 jobs across the country. Cutting clean energy incentives would also raise energy costs for households, with wholesale power prices rising by roughly fifty percent by 2035 due to the loss of new generation capacity.

The tax cuts included in the bill are predicted to greatly increase the federal debt in proportion to the GDP of the U.S. economy. Among other destabilizing effects, this may increase the cost of government borrowing as bond buyers demand a higher interest rate on new debt. Moody's, which rates bonds, was the final of the three credit rating agencies to downgrade U.S. debt from AAA, citing efforts to pass the bill.

On June 28, the Committee for a Responsible Federal Budget (CRFB) said of the Senate version of the bill:

Although we have not produced a full estimate of the bill, it appears to add roughly $4 trillion to the debt through 2034, including interest – which is roughly $1 trillion higher than the House-passed version of the bill. That cost could rise above $5 trillion if temporary provisions were made permanent.

Common misconceptions

Taxes on social security

On July 3, Social Security Administration sent an email suggesting that federal income taxes on Social Security benefits would be eliminated under the bill, but tax experts stated the message was misleading. The law introduces a temporary $6,000 tax deduction for persons aged 65 and older with a certain income, which can reduce federal tax liability from that otherwise owed, but the law does not directly eliminate the taxes on Social Security benefits, which remain in effect under 26 U.S.C. § 86. All revenue from the taxation of Social Security benefits is earmarked for reinvestment into the Social Security Trust Fund, so the deduction would accelerate the insolvency of the Social Security benefits system by limiting this revenue stream.

Taxes on tips

The No Tax on Tips provisions only reduce federal income tax liability and do not affect tax liability for purposes of the Federal Insurance Contributions Act, which funds Social Security and Medicare, or any other federal, state, or local tax law. The new provision is expected to benefit roughly two thirds of tipped workers. Workers would still need to report tips as taxable income, but the deduction can reduce the federal tax liability otherwise owed.

Medicaid and illegal immigrants

The bill prompted claims that illegal immigrants receive Medicaid. Illegal immigrants are already ineligible for full Medicaid benefits under the Personal Responsibility and Work Opportunity Act, so many illegal immigrants access state-funded health programs instead. According to a CBO analysis, the bill's provisions could lead some states to cut back those state-funded health programs, potentially causing an estimated 1.4 million people to lose state-level health coverage, including illegal immigrants.

Medicaid and unemployment

When commenting on the bill's impact on the economy, U.S. secretary of agriculture Brooke Rollins stated that 34 million able-bodied adults on Medicaid should be able to replace the work of farm workers who have been deported. According to the U.S. Government Accountability Office, roughly 70% of adults enrolled in Medicaid and Supplemental Nutrition Assistance Program work at least 35 hours per week; they qualify for assistance because they have low income rather than no income. Overall, it is estimated by The New York Times that only around 3% of Medicaid recipients are both able to work and long-term unemployed.

Government shutdown

After passing the OBBBA, Congress needed to approve a new spending bill to fund the federal government beyond October 1, 2025, when the previous budget expired. The 53 Republican senators had to either eliminate the filibuster or convince at least seven Democrats to join them in order to reach the 60-vote supermajority required to advance their proposal. Most Democrats opposed the Republican plan and requested a compromise that would extend the healthcare subsidies cut by the OBBBA. The resulting stalemate triggered the 2025 United States federal government shutdown, which became the longest government shutdown in U.S. history.