source- getty images
Washington D.C., July 2025 – A sweeping legislative package, officially named the “One Big Beautiful Bill Act,” has cleared both chambers of Congress and is now awaiting President Donald Trump’s signature. The bill promises to reshape critical areas of American policy, including Medicaid, taxes, healthcare, SALT deductions, and even car loan interest rules.
The closely contested bill passed in the House by a margin of 218-214, with Vice President JD Vance casting the decisive vote in the Senate. While largely backed by Republicans, two GOP lawmakers broke ranks to vote against the bill, joining unified Democratic opposition.
Massive Tax Reform and Relief
At the heart of the legislation lies an extension of the 2017 Tax Cuts and Jobs Act, locking in individual and estate tax cuts for another decade. The estimated cost: $4.5 trillion.
No Tax on Tips & Overtime: Workers earning under $150,000 will enjoy tax exemptions on tips (up to $25,000) and overtime pay (up to $160,000) starting January 1, 2025.
Child Tax Credit Boost: Increases from the current amount to $2,500 per child beginning in 2025, with an expiration in 2028.
Trump Accounts for Newborns: A new policy that deposits $1,000 into government-backed accounts for each newborn, also effective from 2025 until 2028.
Medicaid Overhaul
The legislation introduces major changes to Medicaid, including:
$698 billion reduction in funding over 10 years
Work requirements: Able-bodied adults aged 19–55 must work at least 80 hours/month
Stricter eligibility checks, effective December 31, 2026
According to the Congressional Budget Office (CBO), these provisions could lead to 8.6–11.8 million people losing Medicaid coverage by 2034, including 12,000–15,000 in politically sensitive swing districts.
To mitigate Medicaid cuts, a $50 billion relief fund will be established for rural hospitals, starting in 2026—a provision pushed forward by Senator Lisa Murkowski.
In a controversial move, the bill ends tax credits for electric vehicles and renewable energy projects (like solar and wind) 60 days after the bill becomes law, with an exception for nuclear plants under construction before 2028.
With President Trump expected to sign the bill within days, most provisions will begin rolling out in 2025. The legislation marks a major policy pivot and is poised to influence everything from family finances to healthcare access and energy investment in the coming years.
