Updated July 3, 2025 at 5:37 PM EDT
President Trump's massive tax and spending bill, containing much of his domestic agenda, has successfully passed through Congress.
By a vote of 218-214, the House of Representatives narrowly approved the bill on Thursday, just days after the Senate did the same. Now, the legislation heads to the White House, where Trump is expected to sign the bill into law on July 4, meeting his long-time deadline.
The House passed an initial version of the bill in late May, but had to vote on the latest version of the plan after the Senate made changes.
GOP lawmakers in both chambers agreed on the legislation's key pillars, including an extension of President Trump's 2017 tax cuts as well as increased funding for border security, defense and energy production. But there were deep disagreements over how to pay for these policies.
Despite the divides, Senate Majority Leader John Thune, R-S.D., and House Speaker Mike Johnson, R-La., were able to get Republicans over the finish line, albeit by small margins.
Here's a quick look at some of the bill's key provisions.
Extending the Trump tax cuts
The bill calls for $4 trillion in tax cuts, which is slightly higher than the $3.8 trillion originally proposed in the House. It extends Trump's 2017 tax cuts, which are set to expire at the end of the year, meaning that without an extension, most households would have seen their taxes increase.
Additional tax incentives
Congressional Republicans included many of the president's tax-related campaign promises in the bill. The bill includes temporary changes that would allow Americans to deduct up to $25,000 for tip wages and $12,500 for overtime pay through 2028. It also says that overtime and tip deductions will be reduced for Americans with incomes higher than $150,000. Those limits were not included in the original House version.
The bill also increases the child tax credit from $2,000 to $2,200 per child and adjusts the amount for inflation after 2025.
In addition, the bill would permanently expand the standard deduction. Republicans also boosted a tax deduction for people over 65 to $6,000 through 2028. Both chambers included a phase out for people earning over $75,000.
Increasing the debt ceiling
The final legislation lifts the nation's debt limit by $5 trillion, a sizable increase compared to the House bill, which agreed to $4 trillion.
Lifting the debt limit doesn't authorize new spending. Instead, it allows the government to pay for programs that Congress has already authorized. If the cap isn't lifted and the government can't meet its obligations, then it will be at risk of default — a scenario that economists say would be catastrophic not just for the U.S., but the global financial system as a whole. An estimate from the nonpartisan Congressional Budget Office found that without action from Congress, the U.S. will run out of money to pay its bills at some point between mid-August and the end of September.
Medicaid
Changes to Medicaid were one of the most divisive issues throughout both House and Senate negotiations.
The GOP plan requires able bodied adults to work 80 hours per month until age 65 to qualify for benefits. There are carve outs for parents of children under 14 and those with disabilities. But even with those exceptions, the bill's cuts could lead to nearly 12 million people losing health coverage, according to estimates from the CBO.
The plan also caps and gradually reduces the tax states can impose on Medicaid providers. The phase out would begin in 2028, ultimately ending in a 3.5% cap on that tax. It's a change that some GOP Senators expressed concern with, arguing the tax is a critical funding stream for rural hospitals in particular, and cutting it could put many of these hospitals at risk of closing.
In an effort to alleviate some of those concerns, Senate GOP leaders included a new $50 billion fund to support rural hospitals. That program would also begin in 2028 and funds would be spread out over five years.
Changes to SNAP
Both the Senate and House outlined reforms for the Supplemental Nutrition Assistance Program, known as SNAP, which provides aid for food to more than 40 million low-income Americans.
The final bill includes expanded work requirements that "able bodied adults" continue to work up to age 64. There are exemptions for parents with children under 14 and limits on the ways states can offer waivers for those requirements.
The bill also forces states to take on a greater share of the cost of providing food assistance. The amount a state owes would be based on a formula set by the percentage of erroneous payments reported each year. Those changes would go into effect in 2028.
Billions for border security
The GOP bill allocates $46.5 billion toward completing Trump's border wall. It also puts $5 billion for Customs and Border Protection facilities and $10 billion to be used for border security more broadly. The bill sets aside $4.1 billion to hire and retain more agents and officers, and invests in upgraded technology for screenings and surveillance of U.S. borders.
Clean energy tax incentives phase out
The bill phases out tax incentives for clean energy sooner than scheduled. Without the tax credits, America is likely to build fewer wind and solar projects and use more natural gas to generate electricity, according to a study this winter commissioned by the Clean Energy Buyers Association, whose members range from Amazon to ExxonMobil to Walmart.
The Solar Energy Industries Association, a trade group, said in a statement that the Senate bill "undermines the very foundation of America's manufacturing comeback and global energy leadership."
Industry executives and analysts say clean energy is crucial to meet rising electricity demand from things like data centers, because the projects are quick to build and produce electricity that's relatively cheap.
Doug Lewin, an energy consultant in Texas, said abruptly unwinding the incentives would hit consumers through higher electricity bills.
"We will still see solar built," Lewin said. "We'll just see less of it. And it'll be more expensive."
U.S. solar manufacturers are also worried. The incentives that are being phased out encourage companies building clean energy projects to use equipment and components made in American factories. Manufacturers and their supporters warn that quickly ending the incentives would threaten a decade-long push to onshore solar manufacturing and challenge China's dominance of the sector.
"As we have been telling Members of Congress for months, this bill will lead to a flood of Chinese imports, hurting U.S. manufacturing jobs and investments," Mike Carr, executive director of the Solar Energy Manufacturers for America Coalition, said in a statement.
State and Local Tax Deduction
One of the thorniest issues during negotiations was the state and local tax deduction, also known as SALT. The deduction was particularly important to a small number of GOP lawmakers in the House from blue states with high taxes, such as California and New York. Trump's 2017 tax cuts capped the SALT deduction at $10,000. The bill temporarily lifts the cap to $40,000 for married couples with incomes up to $500,000. But that provision expires after 2028 — an effort to buoy the blue-state Republicans through the 2026 midterm and 2028 election cycles, while limiting the long-term impact of the cuts on federal tax revenue.
New immigration fees
The bill includes a handful of new or increased fees for immigration services. It would create a $550 charge for work authorization applications with renewal every six months.
However, the Senate parliamentarian determined that a $1,000 fee for asylum applications did not meet the rules necessary to qualify for a simple majority vote.
A student loan overhaul
The legislation scraps several existing loan repayment options, including the Biden-era SAVE program that based payments on income and household size. It replaces them with a new, standard repayment plan and an income-based plan Republicans call their "Repayment Assistance Plan." The bill also caps the amount that parents and graduate students can take out in federal loans each year.
One difference between the two bills concerned the Pell Grant program for low-income students. The House proposed increasing the credit hours required for full-time and part-time students in order to receive Pell Grants, but the Senate left current enrollment rules intact. The Senate bill does bar students from qualifying for a Pell Grant if they've received a full scholarship through other sources of aid.
Michael Copley contributed reporting.
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