Trump’s Landmark Budget Bill Signed into Law: Key Provisions and Economic Impact Analyzed
Trump’s Landmark Budget Bill Signed into Law: Key Provisions and Economic Impact Analyzed
US President Donald Trump officially signed his sweeping budget mega-bill into law on Friday, July 4, 2025, following its contentious passage through both chambers of Congress. The legislation, which faced significant debate and internal party wrangling, is set to introduce profound changes across various sectors, from taxation and healthcare to social programs and defense spending.
The newly enacted budget includes a permanent extension of the 2017 Trump tax cuts, alongside increased standard deductions for individuals and married couples until 2028. A major point of contention was the steep cuts to Medicaid, introducing new work requirements for childless adults and shifting re-enrollment to a six-month cycle. The Congressional Budget Office estimates these changes could lead to nearly 12 million Americans losing health coverage over the next decade. While initial proposals to eliminate Social Security income taxes were not fully realized, the bill does include temporary tax deductions for older Americans.
Significant changes also include an increase in the State and Local Tax (SALT) deduction cap from $10,000 to $40,000 for five years, and reforms to the Supplemental Nutrition Assistance Program (SNAP), requiring greater state contributions and new work requirements for able-bodied enrollees without dependents. Defense and border spending see substantial boosts, with the military receiving an additional $150 billion and ICE allocated $100 billion, effectively making it the largest federal law enforcement agency. The bill also incorporates a ‘no tax on tips’ provision, a permanent increase in the child tax credit, and a raise in the debt ceiling by $5 trillion. Notably, clean energy incentives from the Biden era will be phased out, though the Senate’s version allows for a slower reduction compared to the House’s immediate cessation.
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