WASHINGTON, D.C. — In a dramatic and closely contested vote, the U.S. Senate approved President Donald Trump’s comprehensive tax and spending legislation, known as the “One Big Beautiful Bill Act,” with a 51-50 margin. Vice President JD Vance cast the decisive vote, breaking a 50-50 tie after an exhaustive 26-hour session marked by intense negotiations and partisan divisions.
The nearly 900-page bill aims to extend the 2017 tax cuts, introduce new tax breaks, and significantly increase funding for military and border security. However, it also proposes substantial cuts to social programs, including Medicaid and food assistance, and is projected to add $3.3 trillion to the national debt over the next decade, according to the Congressional Budget Office (CBO).
Key Provisions and Fiscal Implications
The legislation seeks to make permanent the tax reductions enacted during Trump’s first term, estimated at $4.5 trillion over ten years. It introduces new exemptions for income from tips and overtime pay, and allocates $150 billion each for military spending and immigration enforcement. To offset these costs, the bill proposes $1.2 trillion in spending cuts, primarily targeting Medicaid and the Supplemental Nutrition Assistance Program (SNAP), through stricter eligibility requirements and work mandates.
The CBO’s analysis indicates that the Senate version of the bill would increase the national debt by $800 billion more than the House’s earlier version, which had already raised concerns among fiscal conservatives.
Political Dynamics and Opposition
The bill faced opposition from all Senate Democrats and three Republican senators—Susan Collins of Maine, Rand Paul of Kentucky, and Thom Tillis of North Carolina—who cited concerns over the bill’s impact on healthcare coverage and the national deficit. Senator Lisa Murkowski of Alaska, previously undecided, ultimately supported the bill after last-minute amendments.
Critics argue that the bill disproportionately benefits the wealthy while undermining social safety nets. Elon Musk publicly criticized the legislation, stating it exacerbates “debt slavery” and threatens economic stability.
Next Steps and House Deliberations
The bill now returns to the House of Representatives, where it faces a challenging path. Some House Republicans, particularly members of the Freedom Caucus, have expressed reservations about the increased spending and deficit implications. Representative Chip Roy of Texas, a prominent fiscal conservative, has not confirmed his support, emphasizing the need for a bill that curbs inflation and halts government subsidies.
House Speaker Mike Johnson aims to secure passage before the July 4th holiday, aligning with President Trump’s deadline to sign the bill into law. However, internal GOP divisions and unanimous Democratic opposition suggest a contentious debate ahead.
Market Reactions and Economic Outlook
Financial markets responded modestly to the Senate’s passage of the bill. The SPDR S&P 500 ETF Trust (SPY) experienced a slight decrease, reflecting investor caution amid concerns over the bill’s long-term fiscal impact. Similarly, the iShares 20+ Year Treasury Bond ETF (TLT) and the Invesco DB US Dollar Index Bullish Fund (UUP) showed minimal fluctuations, indicating a wait-and-see approach from investors.
Economists warn that while the bill may provide short-term economic stimulus, the substantial increase in national debt and reductions in social programs could pose risks to long-term fiscal health and social equity.
As the House prepares to deliberate on the bill, the nation watches closely, aware that the outcome will have significant implications for the country’s economic trajectory and social fabric.
