In a pivotal legislative move, the U.S. House of Representatives passed the “One Big Beautiful Bill Act” on May 22, 2025, by a narrow margin of 215–214, marking a significant stride in the economic agenda of former President Donald Trump. This comprehensive bill aims to extend and expand elements of the 2017 tax cuts while introducing measures to stimulate the economy and manage government spending.
Among the core features of the bill are the permanent extension of the 2017 tax cuts, an increase in the child tax credit to $2,500 through 2028, and a rise in the state and local tax (SALT) deduction cap from $10,000 to $40,000 for households earning under $500,000. Additionally, it introduces new deductions for tip and overtime income and includes controversial Medicaid work requirements aimed at trimming social spending.
Supporters argue that the legislation will promote economic stability and benefit middle-income Americans and small businesses. Treasury Secretary Scott Bessent expressed confidence in the bill’s potential to elevate economic growth to 3% annually well above the Congressional Budget Office’s forecast of 1.8%.
However, concerns about fiscal responsibility loom large. The Congressional Budget Office projects that the bill could increase the national deficit by more than $3.3 trillion over the next decade. This projection has rattled financial markets, prompting a sell-off in global bonds and a sharp rise in long-term U.S. Treasury yields.
Critics also voice worries about the potential negative impact on low-income populations, particularly due to cuts in social programs. As the bill heads to the Senate for further deliberation, its fate remains uncertain. The debate reflects broader tensions over balancing immediate economic relief with long-term fiscal sustainability.
