The "One Big Beautiful Bill Act," often referred to as the "Big Beautiful Bill" (P.L. 119-21), is a U.S. federal statute enacted by the 119th United States Congress. Signed into law by President Donald Trump on July 4, 2025, it contains tax and spending policies central to his second-term agenda.
Key provisions and impacts of the Big Beautiful Bill include:
* Taxation The act permanently extends individual tax rates from 2017, which were set to expire at the end of 2025. It also increases the cap on the state and local tax (SALT) deduction to $40,000 for taxpayers earning under $500,000, reverting to $10,000 after five years. New tax deductions are introduced for qualified tip income (up to $25,000 annually, expiring in 2028), overtime pay (up to $12,500 annually, expiring in 2028), and interest paid on car loans (up to $10,000 annually, expiring in 2028). Additionally, it establishes "Trump Accounts," which are tax-deferred accounts for children, set to expire in 2028. The bill also makes permanent the immediate expensing for investments in short-lived assets and domestic research and development.
* Spending and Deficit The Congressional Budget Office (CBO) estimates that the law will increase the budget deficit by $2.8 trillion by 2034. It raises the national debt ceiling by $5 trillion. The bill includes a permanent $200 increase in the child tax credit.
* Healthcare The act makes significant cuts, including a 12% reduction in Medicaid spending, which amounts to nearly $1 trillion. The CBO projects that 10.9 million Americans will lose health insurance coverage due to this law. While undocumented immigrants remain ineligible for federally funded health coverage, the bill's provisions related to limiting immigrant eligibility for Medicaid, the Children's Health Insurance Program (CHIP), Medicare, and subsidized Affordable Care Act (ACA) Marketplace coverage impact lawfully present immigrants.
* Border Security and Enforcement The law allocates $170 billion for border security, aiming to enable the deportation of up to one million people annually. Funding for Immigration and Customs Enforcement (ICE) is substantially increased from $10 billion to over $100 billion by 2029, making it the most funded law enforcement agency in the federal government. This includes $46.5 billion for building a wall on the U.S.-Mexico border and $45 billion over four years to add 100,000 new migrant detention beds.
* Other Provisions The bill expands work requirements for recipients of SNAP benefits (formerly food stamps) and shifts some of the program's costs to states. It also includes $150 billion in new defense spending. For seniors, an additional deduction of $6,000 is available for individuals aged 65 and older, effective from 2025 through 2028. The law also repeals the Biden-era methane tax and aims to unlock oil and gas development on federal lands.
The bill passed the House of Representatives by a vote of 218–214 and the Senate by a vote of 51–50, with Vice President JD Vance casting the tie-breaking vote, overcoming universal Democratic opposition in both chambers.