Overview of the \”One Big Beautiful Bill\”

Signed into law on July 4, 2025, this sweeping reconciliation act carries a $3.4 trillion ten‑year deficit and encompasses across-the-board policy changes—tax reform, social spending cuts, defense, immigration, and energy subsidies. I focus on two main reform related to people’s life

2. Tax Reform and Relief

a. Extension of Trump-era Cuts

• Permanent retention of 2017 tax brackets and standard deduction levels (e.g., $15,750 single, $31,500 joint).

• Benefits largely skew to higher-income households, though substantial relief is provided across tax

b. New Deductions Introduced

• Tip Income Exemption: Up to $25,000 deduction annually through 2028

• Overtime Pay Deduction: $12,500 single, $25,000 joint, reducing taxable income

• U.S. Assembled Auto Loan Interest: Max $10,000 deduction, phase‑out above $100k/$200k income

• Senior Deduction: An Additional $6,000 deduction is available for taxpayers over 65, income-phased

c. Family and Business Incentives

• Child Tax Credit: Increased to $2,200 per child and inflation-indexed

• SALT Deduction Cap: Raised to $40,000 (for incomes < $500k) before reverting to $10k after five years

• QBI Deduction Raised: From 20% → 23%, permanently benefiting small businesses

• 100% Bonus Depreciation: Extended through 2029 to spur capital investment

3. Welfare Restrictions & Spending Cuts

a. Medicaid Overhaul

• Work Requirement: 80 hours/month for childless adults aged 19–64

• Cost‑sharing: Individuals at 100–138% poverty line may pay charges up to $35 per service

• Frequent Eligibility Checks: From annual to semi‑annual reviews.

• Coverage Loss: CBO estimates 11–12 million Americans may lose Medicaid by 2034

b. SNAP Reforms

• Extended Work Requirement: Now includes childless adults and some parents—80 hours/month.

• State Cost‑sharing: States bear up to 75% of administrative costs; penalties for high error rates

• Budget Reductions: SNAP funding slashed by $186–295 billion over 10 years; as many as 2 million households impacted.

c. Other Cuts

• Gender‑affirming care, zero tolerance on Planned Parenthood funding, and elimination of some green energy tax credits, clean energy programs, and student loan relief