House Narrowly Passes Sweeping President Trump-Backed Agenda Bill with Major Tax Cuts, Medicaid Restrictions, and Border Funding

Friday, May 23, 2025

Washington

After a marathon overnight session, House Republicans passed a sweeping legislative package encapsulating key priorities from former President Trump’s second-term agenda. Dubbed the “one big, beautiful bill,” the measure passed by a razor-thin margin (215 votes to 214), now heads to the Senate, where it is expected to undergo further revisions.

Here’s a breakdown of the bill passed Thursday by the House:

Tax Cuts and Extensions

At the heart of the legislation are provisions to extend the 2017 Tax Cuts and Jobs Act, a cornerstone of President Trump’s first term. With many of the cuts set to expire by the end of the year, Republicans prioritized locking them in, along with introducing several new tax breaks.

Highlights include:

No taxes on service tips for workers in restaurants, bars, and the beauty industry — a temporary exemption lasting through 2028.
Overtime pay tax exemption also through 2028.
Auto loan interest deduction of up to $10,000 for cars assembled in the U.S., available until 2029.
Elimination of the $200 tax on gun silencers, a fee in place since 1934.
Child tax credit increase of $500, bringing the total to $2,500 per child through 2028.
Remittance tax of 3.5% on money transfers sent by non-U.S. citizens to family abroad (down from an initial proposal of 5%).

Medicaid Overhaul

The bill introduces significant restrictions to Medicaid, including:

Work requirements for able-bodied adults without children under 7, between ages 18–65.
Accelerated implementation of work requirements to begin by December 31, 2026.
Cutting federal funds to states that use Medicaid infrastructure to provide health care coverage to undocumented immigrants.
Ban on coverage for gender transition services, for both adults and children.

State and Local Tax Deduction (SALT) Cap Raised

Originally capped at $10,000 under President Trump’s 2017 tax law, the SALT deduction limit will rise:

New cap: $40,000 per household for incomes up to $500,000.
This change followed negotiations with blue-state Republicans, who had threatened to withdraw support.

Border Security Funding

In addition to tax provisions, the legislation includes a significant boost in border security funding:

$46.5 billion for constructing the border wall.
$4.1 billion for hiring new Border Patrol agents and personnel.
$2 billion+ in signing and retention bonuses for agents.
$1,000 asylum application fee, aimed at deterring frivolous claims.
$12 billion in additional border security funds, added through a last-minute amendment.

**“MAGA Account (money account for growth and advancement) ” for Child Savings**

Rebranded from the initial “MAGA accounts,” these federally backed savings accounts offer:

$1,000 government contribution for every child born between 2024 and 2028.
Annual parental contribution cap of $5,000.
Funds accessible at age 18, to be used for college, job training, or first-time home purchases.
Investment earnings taxed at long-term capital gains rate upon withdrawal for qualified uses.

Food Stamp Restrictions

Under the legislation, the Supplemental Nutrition Assistance Program (SNAP) faces tougher eligibility rules:

Work requirements extended to adults up to age 64 (previously capped at 54).
Shift in cost burden from federal to state governments.

Rolling Back Clean Energy Incentives

The bill targets key Biden-era climate provisions, including:

Early expiration of clean vehicle tax credits.
Accelerated phase-out of tax breaks for new renewable energy plants — plants must start construction within 60 days of the bill’s enactment and be operational by 2028.
Exemption for nuclear energy, which must begin construction by the same 2028 deadline.

Debt Ceiling Raised

To address the looming debt ceiling crisis, the bill raises the borrowing limit by $4 trillion. Treasury Secretary Scott Bessent has warned that without congressional action, the government could run out of funds by August. Republicans included the debt ceiling increase in this package to bypass a separate negotiation with Democrats. Since budget legislation can advance through the Senate without bipartisan support, the GOP hopes to fast-track the measure.

With the Senate next in line to take up the bill, substantial revisions are likely — but the House’s narrow passage signals a clear path forward for President Trump-aligned fiscal and policy priorities.