2025-07-03T18:54:22Z

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In a pivotal moment for President Donald Trump, his proposed tax cut and spending package has successfully navigated its final legislative hurdle, securing approval from the Republican-controlled House of Representatives. Following a narrow and contentious vote of 218-214, the bill is set to be sent to the president's desk, where he is expected to sign it into law on Friday.

This legislation is being hailed as a significant victory for Trump, as it not only funds his controversial immigration crackdown but also makes the substantial tax cuts enacted in 2017 permanent. Additionally, the bill delivers new tax breaks that align with promises made during Trump’s re-election campaign, further solidifying his economic agenda.

However, the bill has drawn considerable criticism for its approach to key social safety nets. It will slash funding for vital health and food assistance programs while eliminating numerous incentives aimed at promoting green energy initiatives. According to the non-partisan Congressional Budget Office (CBO), the legislation is projected to add a staggering $3.4 trillion (€2.9 trillion) to the national debt, which currently stands at $36.2 trillion (€31 trillion).

The CBO also highlighted the bill's long-term fiscal implications, including a projected reduction in tax revenues of $4.5 trillion (€38 trillion) over the next decade, alongside a spending cut of $1.1 trillion (€936 billion). The most significant cuts will occur in Medicaid, the health program that serves approximately 71 million low-income Americans. Changes to Medicaid enrollment standards, the implementation of work requirements, and new restrictions on funding mechanisms are expected to leave nearly 12 million individuals without health insurance.

Despite the concerns echoed by many Democrats, every member of the party voted against the bill, labelling it a substantial giveaway to the wealthy that disproportionately benefits the richest Americans while adversely affecting the low-income population. Democratic Leader Hakeem Jeffries delivered an impassioned speech that lasted nearly nine hours, the longest in House history, condemning the bill as a vehicle for massive tax breaks for billionaires at the expense of everyday citizens.

Throughout the legislative process, Trump remained an active participant, exerting pressure on lawmakers to finalize the bill by a self-imposed deadline coinciding with the upcoming Independence Day holiday. His social media proclamations, including a message that asserted, “FOR REPUBLICANS, THIS SHOULD BE AN EASY YES VOTE. RIDICULOUS!!!,” underscored the urgency he felt about the legislation.

Republicans demonstrated a united front, with just two members of the party breaking ranks to vote against the bill in the House. They argue that the legislation will lower taxes for a broad spectrum of Americans and stimulate economic growth. Virginia Foxx, a Representative from North Carolina, characterized it as bringing “historic tax relief for working families” while also enhancing national security through increased border funding.

The Senate had previously passed the bill by the narrowest of margins, with a 51-50 vote. Vice President JD Vance cast the pivotal vote that allowed the legislation to advance. The bill's passage means that tax increases that were scheduled to affect many Americans at the end of the year will be avoided, with the existing tax cuts made permanent.

On the other hand, analysts have raised alarms over the potential long-term implications of the bill, suggesting it could create a financial burden for future generations, as the increased debt load effectively transfers economic resources from younger to older citizens. In the financial markets, ratings agency Moody's downgraded U.S. debt in May, attributing the downgrade to the rising national debt.

As the final version of the bill makes its way to the president, it is worth noting that it contains more significant tax cuts and aggressive healthcare reductions compared to an earlier version that had been passed by the House in May. Additionally, during Senate discussions, Republicans chose to drop proposed provisions, including a ban on state-level regulations concerning artificial intelligence and a "retaliatory tax" on foreign investments, which had previously raised concerns among investors in Wall Street.