House Republicans this week passed a sweeping package of President Trump’s tax proposals, spending cuts and reforms for key federal programs.
The nearly party-line, 215-214 vote came after weeks of intense negotiations, marathon meetings, last-minute changes and an overnight session on the House floor.
The bill now goes to the upper chamber, where Senate Republicans are already eyeing changes.
Here’s a rundown of what’s in the more than 1,000-page bill the House passed.
2017 tax cuts
A centerpiece of the legislation is making the 2017 Trump tax cuts permanent — which nonpartisan scorers and think tanks estimate would cost trillions of dollars over the next decade.
The Joint Committee on Taxation (JCT), the official revenue scorer for Congress, estimated earlier this month the overall cost of extending the tax cuts and other measures in the plan would add more than $5 trillion toward the nation’s deficits.
One of the most costly proposals is extending the individual rate reductions in the 2017 law, which is estimated to reduce revenues by more than $2 trillion through 2034.
At the same time, the JCT also found the package would put about $1.9 trillion toward reducing the deficit through measures such as cuts to renewable energy incentives and international tax enforcement.
Overall, the JCT estimated the tax piece would cost $3.7 trillion over the next decade.
SALT
The bill includes a proposal that would raise the cap for the state and local tax (SALT) deduction, which would allow taxpayers — especially those in higher-tax blue states — to deduct more of their regional taxes from their federal tax bill.
The measure calls for raising the current deduction cap to $40,000 for filers making less than $500,000.
The deal House GOP leadership struck with SALT Caucus Republicans was crucial in getting the bill passed. Several Republicans from high-tax blue states had threatened to tank the entire measure if the deduction cap wasn’t increased to their liking.
The cap has also been a source of contention in the GOP conference in recent months, as some fiscal hawks have also raised concerns about raising the limit, and changes could be coming when the Senate begins working on the bill.
‘No tax on tips’
New tax proposals also make the cut in the legislation, including a measure aimed at nixing taxes on tips, as Republicans seek to make good on a key pledge Trump made on the campaign trail last year.
The legislation also includes provisions seeking to do away with taxes on car loan interest and overtime pay, as well as an enhanced deduction for seniors and a suite of other proposals seeking to provide tax relief.
Green energy tax credits
The legislation includes significant cuts to Biden-era tax credits for climate-friendly energy sources.
The bill’s initial text eliminates tax credits for electric vehicles within two years.
It also eliminates credits for low-carbon electricity including wind and solar that begin producing power after 2028. Projects also need to start construction within 60 days of the bill’s enactment. And it puts restrictions on the use of Chinese components, subcomponenents and minerals
Beyond the green tax credits, the legislation also eliminates other green programs including those that seek to fund climate-friendly projects and reduce air pollution. It also seeks to eliminate Biden-era regulations that are expected to reduce the share of new gas-powered cars sold in the U.S.
Medicaid reforms
The bill includes major reforms to Medicaid estimated to lead to millions of people losing coverage by 2034.
The bill would require states to impose work requirements on childless adults aged 19-64 to be eligible for the program and seeks to shorten the open enrollment period for the Affordable Care Act, among a host of other changes. Under pressure from conservatives, GOP leaders amended an initial version of the bill to enact the changes no later than the end of next year.
The proposed Medicaid and health care reforms are key pieces of a significant portion of the bill crafted by the House Energy and Commerce Committee, which was tasked with finding more than $800 billion in savings over a decade.
Republicans are pushing for well more than $1 trillion in cuts to federal spending to ride alongside the tax piece.
SNAP benefits
The bill would tighten eligibility requirements for the Supplemental Nutrition Assistance Program (SNAP) and require states to cover a portion of benefit costs.
While SNAP benefits are currently funded by the federal government, the proposal calls for the federal share of the cost of allotments to go from 100 percent in the next two fiscal years to 95 percent in fiscal 2028 “and each fiscal year thereafter.”
It also includes language to increase the states’ 5 percent share of benefit costs in fiscal 2028 depending on their payment error rate. If the error rate is 6 percent or higher, a state would be subject to a sliding scale that could see its share of allotments rise to a range of between 15 percent and 25 percent.
Republicans say the move would give states an incentive to lower their payment error rates for the program, over which lawmakers on both sides have raised alarm. But Democrats have sharply criticized the recent GOP-backed proposal, which they argue could lead to states cutting benefits on their own.
CFPB
The legislation seeks to significantly limit funding for the Consumer Financial Protection Bureau (CFPB), which was established during the Obama administration in the aftermath of the 2008 financial crisis.
As part of its funding structure, the CFPB receives transfers from the Federal Reserve not exceeding a cap set at 12 percent of the Federal Reserve System’s total operating expenses. The GOP-crafted recommendations, if enacted, would significantly reduce the amount of funding the agency can receive from the central bank, setting that cap at 5 percent.
Democrats have hailed the CFPB as one of the most successful creations of the 2010 Dodd-Frank Wall Street reform law, praising its aggressive track record of enforcing consumer protection laws. But Republicans have long pressed for measures to rein in the agency, which they have argued has too much power and independence from Congress.
Debt limit
House Republicans are also moving forward with plans to raise the nation’s debt ceiling by $4 trillion as part of the package, as the Treasury Department warns the government risks defaulting on its more than $36 trillion debt in the coming months.
Treasury Department Secretary Scott Bessent is already calling on Congress to raise or suspend the debt ceiling by July to keep the federal government from defaulting on its more than $36 trillion debt.
In a letter earlier this month, Bessent said there is “reasonable probability” the government’s “cash and extraordinary measures will be exhausted in August while Congress is scheduled to be in recess.”
Pell Grant reforms and student loans
The bill would beef up Pell Grants for some students for short-term training programs but would tighten limits for how much students could borrow in federal student loans.
The plan calls for a tax increase on private university endowments amid an ongoing clash between the Trump administration and higher education.
If passed, it would also create the first federal school choice bill by allowing federal tax credits for individuals who donate to groups that provide school choice scholarships to students, making it so individuals in all 50 states could receive a stipend to cover the cost of private school or homeschool expenses.
Funding boosts for Pentagon, deportation plans
The bill also includes increases to Pentagon spending, along with funding boosts to help advance Trump’s immigration and border priorities.
Defense spending would stand to see a roughly $150 billion boost as part of the package — a proposal that Trump officials have touted will push defense spending to more than $1 trillion for the first time ever, when accounting for the annual budget.
The bill also calls for tens of billions of dollars for Trump’s border wall and funding for detention.
Tobias Burns and Lexi Lonas contributed.
