Trump Signs Wide-Ranging Spending and Tax Bill
The legislation enacts permanent tax cuts, slashes public benefits, and expands immigration enforcement as concerns over long-term economic impact grow.
President Trump signed the “Big Beautiful” spending bill into law Friday evening during Fourth of July celebrations at the White House, marking a major shift in the nation’s fiscal and domestic priorities.
The signing took place during a military family event on the South Lawn, with Trump touting the measure as a landmark achievement in his second term.
“We’re adding things like the biggest tax cut in the history of our country, a child tax credit—so many things are being added that we wouldn’t even have time to discuss them when we were doing it,” Trump said.
“It includes the largest tax cut in American history, the largest spending cut—$1.7 trillion. And yet you won’t even notice it. Just waste, fraud and abuse in American history.”
What’s in the bill?
A major component of the spending bill includes tax cuts, with more than $4.5 trillion in reductions expected. Tax deductions for single filers would be adjusted to $750 and $1,500 for couples.
The legislation boosts the child tax credit from $200 to $2,200, restricting benefits to taxpayers with a Social Security number only.
One of the most controversial aspects—the state and local tax (SALT) deduction cap—is increased to $40,000 for five years for individuals earning less than $500,000 annually. The cap returns to $10,000 in 2030.
A tax credit for private schools was also included in the legislation, reimbursing donors for the first $1,700 contributed to groups that provide vouchers for private school tuition.
In an analysis, the Institute on Taxation and Economic Policy (ITEP) called the credit “unprecedented.”
“The lack of an aggregate cap on the tax credit creates the possibility that this policy could carry an immense price tag,” the group said.
Further tax cuts include deductions on tipped wages up to $25,000, with overtime wages deductible up to $12,500. Phaseouts begin at an income of $150,000 for single filers. Seniors earning no more than $75,000 annually qualify for a deduction of up to $6,000.
The corporate tax rate is reduced from 35% to 21%, with the legislation allowing businesses to write off the total cost of equipment and research.
The bill raised controversy over proposed cuts to programs such as Medicaid and food stamps, including 80-hour-per-month work requirements for people enrolled in social programs. The mandate would also apply to parents of children 14 and older. Those enrolling in expansion programs for Medicare would pay a new $35 fee to receive care.
Research from the Congressional Budget Office (CBO) estimated that nearly 12 million people could lose health insurance by 2034.
Amid ongoing anti-immigrant sentiment, another controversial piece of the bill includes expanded immigration enforcement, with $170 billion in funding—more than the military budgets of many countries.
“Throwing billions at detention centers and enforcement agents is short-sighted. Instead, we should be investing in a system aimed at welcoming immigrants that contribute billions to our economy,” said Adriel Orozco, senior policy counsel at the American Immigration Council, in a press release criticizing the measure.
“We don’t need more jail beds and indiscriminate raids. We need balanced solutions that strengthen due process and keep families together.”
More than $45 billion is allocated for immigration detention centers, with an additional $30 billion to hire more Immigration and Customs Enforcement (ICE) officers, cover transportation costs, and maintain current facilities. Also included is $46.5 billion to complete a wall along the U.S.-Mexico border—continuing a directive from Trump’s first term—as well as a new $100 fee to apply for asylum.
Reactions
Various officials criticized the legislation, with Rep. Thomas Massie voting “no” in the Senate vote, citing budget concerns.
“I voted no on final passage because it will significantly increase U.S. budget deficits in the near term, negatively impacting all Americans through sustained inflation and high interest rates,” Massie wrote in a post on X.
Rep. Brian Fitzpatrick—who also voted “no”—said he couldn’t support the Senate’s version of the bill in a statement.
“I voted to strengthen Medicaid protections, to permanently extend middle-class tax cuts, for enhanced small business tax relief, and for historic investments in our border security and our military,” he said.
“The original House language was written in a way that protected our community; the Senate amendments fell short of our standard.”
Senate Minority Leader Chuck Schumer claimed that Senate Republicans “betrayed” the American people by passing the legislation.
“This vote will haunt Republicans for years to come,” he said.
House Minority Leader Hakeem Jeffries also criticized the legislation, following a previous report from The Introspective that detailed Jeffries speaking on the floor for hours on Thursday in an attempt to delay the final vote.
“Shame on the people who've decided to launch that kind of all-out assault on the health and the well-being of everyday Americans,” he said.
Many economists raised alarm over the bill, including Maya MacGuineas, president of the Committee for a Responsible Federal Budget (CRFB), who criticized the measure for showing a “blatant disregard” for the country’s current fiscal conditions.
“The Senate bill would add $600 billion to the deficit in 2027 alone, push deficits above 7% of GDP, drive debt to new record highs, and accelerate the insolvency of Social Security and Medicare,” she told Fox Business.
“Claims that it reduces the deficits rely on phony baselines, fantastical economic assumptions, and arbitrary expirations.”
Organizations such as the National Restaurant Association have previously expressed support for the “Big Beautiful” bill, with President and CEO Michelle Korsmo praising the legislation.
“The inclusion of the No Tax on Tips and No Tax on Overtime provisions recognizes the value of our dedicated workforce. More than two million tipped servers and bartenders stand to benefit, while the overtime measure rewards the commitment of over 13 million hourly team members across the sector,” Korsmo said in a statement.
However, despite studies highlighting that 83% of hourly workers support the “No Tax on Tips” policy, many restaurant workers have also criticized the bill due to the cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), the formal name for food stamps.
“That is one of the biggest fears I have right now. I rely on SNAP myself. I rely on Medicaid. At one point, I didn’t have insurance because of the whole sub-minimum wage,” said Jessica Ordenana, a server at a Chili’s restaurant in Queens, New York City, in a report by Al Jazeera.
Further research from Yale University found that a third of tipped workers are exempt from federal income taxes due to their earnings being too low. A previous report from The Introspective found that over 11% of restaurant workers are enrolled in SNAP programs.