House Republicans Release Trump’s New Draft Tax, Spending Bill
House Republicans have released a sweeping tax and spending proposal, a cornerstone of President Donald Trump’s renewed economic agenda, branding it the “big, beautiful bill.”
The draft was approved by the House Ways and Means Committee after a marathon 17-hour session, with a 26-19 party-line vote.
The bill now heads to the House Budget Committee, with Republican leaders aiming for final passage before July 4.
The proposed legislation seeks to extend and expand the tax policies introduced during Trump’s first term, while also introducing several new measures aimed at providing targeted relief to specific groups.
Key elements include:
1. Extension of 2017 Tax Cuts
The bill aims to permanently extend the individual and business tax cuts initially enacted under the 2017 Tax Cuts and Jobs Act, which are set to expire at the end of 2025. These cuts significantly lowered corporate tax rates and reduced income tax rates across various brackets.
2. Temporary Tax Relief for Workers
It includes temporary exemptions on tip income and overtime pay, set to expire in 2028. This measure is designed to provide immediate relief to service and hourly workers, who were among the hardest hit during the pandemic.
3. MAGA Accounts for Newborns
A novel feature in the bill is the creation of $1,000 tax-exempt savings accounts for eligible American newborns, known as “MAGA Accounts.” These accounts aim to encourage early investment and financial literacy, with proponents arguing that they will help bridge the wealth gap over time.
4. Senior Tax Deduction
To support older Americans, the bill introduces an additional $4,000 tax deduction for individuals aged 65 and older, available from 2025 through 2028. However, this benefit will phase out for higher-income seniors, reflecting a targeted approach to tax relief.
The Tax Foundation estimates that the bill could increase long-term GDP by 0.6% but would reduce federal tax revenue by approximately $4.0 trillion over the next decade (2025-2034).
Critics warn that this substantial revenue loss could lead to higher deficits, potentially straining federal programs like Social Security and Medicare.
Opponents also argue that the bill disproportionately benefits higher-income households, potentially widening income inequality.
While middle-income families would see modest relief, the wealthiest 0.1% of earners stand to gain significantly more in both absolute and relative terms.
The bill’s path to final passage remains uncertain, with divisions emerging even within the Republican caucus over its fiscal implications and the scale of proposed tax cuts.
Democrats, meanwhile, have signaled strong opposition, criticizing the bill as a giveaway to the wealthy and a threat to social safety net programs.
The legislation is expected to face rigorous debate as it moves to the House Budget Committee and, eventually, the Senate, where it will require a simple majority to pass under budget reconciliation rules.
With the July 4 deadline looming, Republican leaders are under pressure to unify their caucus and push the bill through Congress, delivering a major legislative win for Trump as he seeks to solidify his legacy in economic policy.
