The Big Beautiful Bill passed the House in the early morning of May 22, 2025.
Trump has staked a great deal of his Second-Term success on this particular piece of legislation, and understandably so.
Here are the current benefits of the legislation (and the key reforms):
Makes the 2017 Trump tax cuts permanent for working and middle-class families.
Increases the child tax credit through 2028.
Adds work requirements for childless adults on Medicaid. These requirements would kick in December 2026, as opposed to 2029.
Adds work requirements and forces states to cover costs for SNAP (Supplemental Nutrition Assistance Program).
Increases the standard deductions on social security payments. Trump wanted to eliminate taxes on Social Security, but this is an OK compromise.
Ends taxes on tips, overtime pay, and car loan interest payments.
Forbids Medicaid dollars for sex mutilation (aka “gender affirming care”). This is a big cultural win.
Removes taxes on gun silencers and removes them from registry requirements: another cultural win, for sure.
Eliminates renewable energy tax credits, part of Biden’s falsely named “Inflation Reduction Act of 2022)
Increases the SALT (state and local tax) deductions to $40,000.
Provides funding for defense and the Border Wall (very important!)
Three key factions were frustrating the legislation until the final vote:
Blue state Republicans (from New Jersey, New York, and California) wanted to restore unlimited SALT deductions.
Moderate Republicans wanted to protect Medicaid at all costs.
Conservative Republicans want more budget and spending cuts. (I don’t blame them.)
In the bill’s current form, the rumblings from the United States Senate reflect many of the previous House negotiations:
Senators Paul and Johnson want real spending cuts. Johnson, to his credit, wants spending back to pre-pandemic levels, and Paul does not support the $4 trillion debt ceiling increase.
Senators Murkowski, Collins, Hawley, and Moran are concerned about Medicaid cuts to rural hospitals and higher reimbursement rates imposed on patients.
Senators Tillis, Curtis, Murkowski, and Moran have raised alarms about losing the renewable energy credits. This illustrates how it’s almost impossible to kill a government program once it has begun.
The devil is always in the details. What is remarkable, of course, is that none of the U.S. senators are clamoring about the SALT deductions. Understandable, since all the US Senators from the blue states are Democrats, and they have never voted down an income tax increase. To their credit, the US Senate unanimously supported No Taxes on Tips on May 20, 2025.
That approach may be the way forward. Only tax increases must originate in the House of Representatives. Take all the winning tax cut measures, introduce them as separate bills, pass them out of the US Senate, and then the House can confirm them.
What will likely happen in the US Senate regarding the other complaints? Senate Majority Leader Thune can afford to lose only three votes, and currently, there are at least eight U.S. senators ready to derail the legislation. Most likely, there will be guarantees for Medicaid funding in rural areas. The best way forward regarding renewable energy credits will focus on identifying the most viable and lucrative options, likely for electric vehicles, but not for other applications.
The biggest problem is the spending.
When it comes to massive increases in debt, a $4 trillion debt ceiling rise is unconscionable. At this point, legislators should swear off increasing the debt ceiling entirely. How dare they continue to borrow money to pay for things that this government cannot afford?!
Furthermore, the tax reforms are picking winners and losers. What about the rest of us who don’t work tipped jobs? For the record, I don’t leave tips all that often anymore, since food costs have increased, but service has not improved. I respect the SALT deduction argument. High-tax states like New York and Illinois squeeze residents for millions of dollars, and the residents hardly get their money’s worth.
Ideal tax reform would look like this:
This country needs a drastic reduction of all federal agencies. Think of Argentine President Javier Milei during his 2023 campaign: Department of Commerce—GONE! Department of Housing and Urban Development—GONE! (and so on.) Trump has started the conversation by ordering the elimination of the Department of Education. He can reduce spending to the base amounts, but Congress needs to consider closing the department entirely.
Why is there an income tax in the first place?! The United States survived without one for 150 years. Starve the Washington Beast and restore the American Citizen’s full sovereignty, including full possession of his own money! And why is the federal government doling out welfare to begin with? Where does the Constitution grant that power to Congress?
I stand with Rand regarding the debt ceiling: No increases. He should filibuster the bill, despite the reconciliation setup, to make his point. Johnson should find a way to balance tax credits with real debt reduction. Reducing spending will help reduce inflation. Fiscal conservatives must emphasize this fact and encourage Trump to endorse those reforms.
Regarding Medicaid, work requirements must remain, but Thune can work out the details in the conference committee to ensure that federal dollars continue to be available for rural hospitals. Let’s help people in real need, not people who really need to get off their asses and get a job!
Regarding tax reduction, if we cannot eliminate the IRS, let’s reduce the agency’s importance. How about reducing the number of tax brackets? Let’s increase the amount of tax-free savings that citizens can invest in Health Savings Accounts and IRAs. As for SALT, the liberal states need to feel the pinch, but allow the residents some room with a $30,000 deduction cap.
Since politics is the art of the possible, the senators must adjust to get the Best Big Beautiful Bill. Fiscal discipline must define this legislation, though. To his credit, Senator Majority Leader Thune is stressing that necessity.
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