Tax and Spending Bill Passed in Narrow Victory for Trump’s Agenda
| 2025-07-04
In this file photo, President Trump spoke about the economy during an event at the Circa Resort and Casino in Las Vegas, Saturday, Jan. 25.
The US Congress has approved President Trump’s extensive tax and spending bill, which enacts permanent tax cuts and large budget reductions, despite fierce opposition from Democrats.
The US Congress has narrowly passed a sweeping bill backed by President Donald Trump that delivers multitrillion-dollar tax cuts and steep spending reductions, marking a pivotal legislative success for the president ahead of the 4 July holiday.
President Donald Trump secured one of the most significant domestic victories of his second term on Thursday after the US House of Representatives voted by 218 to 214 to pass legislation that combines permanent tax reductions with major cuts to health and welfare programmes.
The measure, approved by the Senate earlier in the week, is expected to be signed into law by President Trump during an Independence Day ceremony in Washington. The White House has said the bill will deliver long-term economic benefits, although independent analysts have warned it could add $3.3 trillion to the federal deficit over a decade.
Contentious Negotiations
The bill’s passage followed months of negotiations among Republicans, who control both chambers of Congress. Lawmakers repeatedly clashed over the scale of spending reductions and the scope of tax relief.
House Speaker Mike Johnson, a Louisiana Republican, described the measure as the most consequential conservative reform package in modern US history. “With one big beautiful bill we are going to make this country stronger, safer and more prosperous than ever before,” he said after the vote, invoking one of President Trump’s campaign slogans.
The legislation cements the tax cuts first enacted during Trump’s initial term in 2017, which were due to expire, and introduces new deductions. Among them is the removal of taxes on tips and overtime pay, and a $6,000 deduction for many older Americans with incomes under $75,000.
Funding for Defence and Immigration
Beyond tax policy, the nearly 900-page bill allocates significant resources to other priorities. Approximately $150 billion is earmarked for military spending, including a missile defence system dubbed the “Golden Dome.” An additional $150 billion will bolster border enforcement and immigration detention facilities.
Representative Jodey Arrington of Texas, who chairs the House Budget Committee, called the bill “a generational opportunity to deliver the most comprehensive and consequential set of conservative reforms in modern history.”
Opposition from Democrats
Democrats were united in opposing the legislation, which they labelled “trickle-down cruelty.”
House Minority Leader Hakeem Jeffries of New York staged an eight-hour, 45-minute speech criticising the bill—the longest in House history—arguing it would harm the nation’s most vulnerable communities. “I never thought that I’d be on the House floor saying that this is a crime scene,” Mr Jeffries said.
California Democrat Nancy Pelosi described the measure as “a dangerous checklist of extreme Republican priorities.” Other Democrats accused the Republican majority of using the bill to roll back policies introduced by former Democratic presidents Barack Obama and Joe Biden.
Impact on Social Programmes
The legislation includes $1.2 trillion in cuts to Medicaid, the programme providing health coverage for low-income Americans, and reductions in food assistance benefits. Work requirements will be expanded to cover more adults, including some older recipients.
According to estimates by the Congressional Budget Office, about 11.8 million people could lose health insurance as a result.
Republicans argued that the changes are necessary to ensure the programmes are sustainable and to eliminate waste and fraud. Representative Thomas Massie, a Kentucky Republican, was among the two members of the president’s party who voted against the bill, citing concerns about cuts to Medicaid.
Political Repercussions
Throughout the legislative process, President Trump used his platform on social media to pressure wavering lawmakers. In a post shortly after midnight on Thursday, he questioned why some Republicans continued to resist the bill, writing: “What are the Republicans waiting for???”
Several Republicans expressed reservations but ultimately supported the measure under pressure from party leaders and the White House. Some moderates were reassured by promises of executive action and potential funding for projects in their districts.
Analysts say the passage of the bill may come at a political cost for Republicans in competitive districts, given the unpopularity of some of its provisions.
Economic Implications
Independent tax researchers have noted that the bill will deliver the largest benefits to higher-income households. The Tax Policy Center estimated that the top fifth of earners would see average annual tax cuts exceeding $10,000, compared with about $150 for the lowest-income households.
Republicans contend that the tax relief will stimulate economic growth and prevent what they described as a looming tax increase if the 2017 provisions were allowed to expire.
President Trump, who is expected to sign the legislation into law on 4 July, has called the package “a great bill for the country,” predicting it will fuel economic expansion and reinforce national security.
Context
The vote reflects deep divisions within US politics over fiscal priorities. While supporters see the measure as restoring incentives and fiscal discipline, critics argue it risks widening inequality and stripping support from millions of Americans.
With the bill’s enactment, Trump’s administration has effectively dismantled large portions of the policy legacy of Presidents Obama and Biden, notably Medicaid expansions and green energy subsidies. The long-term impact on the US economy and social fabric is likely to remain a point of contention in the run-up to the next election.
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