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Republicans muscle Trump's sweeping tax-cut and spending bill through Congress
The 218-214 vote amounts to a significant victory for the Republican president that will fund his immigration crackdown, make his 2017 tax cuts permanent, and deliver new tax breaks that he promised during his 2024 campaign.
It also cuts health and food safety net programs and zeroes out dozens of green energy incentives. It would add $3.4 trillion to the nation's $36.2 trillion debt, according to the nonpartisan Congressional Budget Office.
Despite concerns within Trump's party over the 869-page bill's price tag and its hit to healthcare programs, in the end, just two of the House's 220 Republicans voting against it, following an overnight standoff. The bill has already cleared the Republican-controlled Senate by the narrowest possible margin.
The White House said Trump will sign it into law at 5 p.m. ET (2100 GMT) on Friday, the July 4 Independence Day holiday.
Republicans said the legislation will lower taxes for Americans across the income spectrum and spur economic growth.
"This is jet fuel for the economy, and all boats are going to rise," House Speaker Mike Johnson said.
Every Democrat in Congress voted against it, blasting the bill as a giveaway to the wealthy that would leave millions uninsured.
"The focus of this bill, the justification for all of the cuts that will hurt everyday Americans, is to provide massive tax breaks for billionaires," House Democratic Leader Hakeem Jeffries said in an eight-hour, 46-minute speech that was the longest in the chamber's history.
Trump kept up the pressure throughout, cajoling and threatening lawmakers as he pressed them to finish the job.
"FOR REPUBLICANS, THIS SHOULD BE AN EASY YES VOTE. RIDICULOUS!!!" he wrote on social media.
Though roughly a dozen House Republicans threatened to vote against the bill, only two ended up doing so: Brian Fitzpatrick of Pennsylvania, a centrist, and Thomas Massie of Kentucky, a conservative who said it did not cut spending enough.
[1/7]U.S. House of Representatives Speaker Mike Johnson gestures after signing the U.S. President Donald Trump's sweeping spending and tax bill, on Capitol Hill in Washington, D.C., U.S., July 3, 2025. REUTERS/Umit Bektas Purchase Licensing Rights
MARATHON WEEKEND
Republicans raced to meet Trump's July 4 deadline, working through last weekend and holding all-night debates in the House and the Senate. The bill passed the Senate on Tuesday in a 51-50 vote, in that saw Vice President JD Vance cast the tiebreaking vote.
According to the CBO, the bill would lower tax revenues by $4.5 trillion over 10 years and cut spending by $1.1 trillion.
Those spending cuts largely come from Medicaid, the health program that covers 71 million low-income Americans. The bill would tighten enrollment standards, institute a work requirement, and clamp down on a funding mechanism used by states to boost federal payments - changes that would leave nearly 12 million people uninsured, according to the CBO.
Republicans added $50 billion for rural health providers to address concerns that those cutbacks would force them out of business.
Nonpartisan analysts have found that the wealthiest Americans would see the biggest benefits from the bill, while lower-income people would effectively see their incomes drop as the safety-net cuts would outweigh their tax cuts.
The increased debt load created by the bill would also effectively transfer money from younger to older generations, analysts say. Ratings firm Moody's downgraded U.S. debt in May, citing the mounting debt, and some foreign investors say the bill is making U.S. Treasury bonds less attractive.
The bill raises the U.S. debt ceiling by $5 trillion, averting the prospect of a default in the short term. But some investors worry the debt overhang could curtail the economic stimulus in the bill and create a long-term risk of higher borrowing costs.
On the other side of the ledger, the bill staves off tax increases that were due to hit most Americans at the end of this year, when Trump's 2017 individual and business tax cuts were due to expire. Those cuts are now made permanent, while tax breaks for parents and businesses are expanded.
The bill also sets up new tax breaks for tipped income, overtime pay, seniors and auto loans, fulfilling Trump campaign promises.
The final version of the bill includes more substantial tax cuts and more aggressive healthcare cuts than the initial version that passed the House in May.
During deliberations in the Senate, Republicans also dropped a provision that would have banned state-level regulations on artificial intelligence, and a "retaliatory tax" on foreign investment that had spurred alarm on Wall Street.
The bill is likely to feature prominently in the 2026 midterm elections, when Democrats hope to recapture at least one chamber of Congress. Republican leaders contend the bill's tax breaks will goose the economy before then, and many of its benefit cuts are not scheduled to kick in until after that election. Opinion polls show many Americans are concerned about the bill's cost and its effect on lower-income people.
As U.S. President Donald Trump worked to pass his signature spending bill, he blended charm and threats, bestowed gifts and bellowed frustration to bend Congress to his will.
In the end, after days of intense behind-the-scenes pressure from the White House, Congress proved no match for a president at the peak of his power.
Trump secured the biggest legislative victory of his second term in office on Thursday when the House of Representatives passed his sweeping tax-cut and spending bill, sending it to the Republican president for his signature by his dictated deadline of Friday's Independence Day holiday.
The measure will give Trump billions of dollars and new legal avenues to press forward with his domestic agenda, ramping up migrant deportations and cutting taxes while rolling back health benefits and food assistance.
One-by-one, major U.S. institutions from the Supreme Court, law firms, universities, media outlets and beyond have given way for Trump to push the bounds of presidential authority in his first five months in office. With its narrow passage of Trump's self-styled "big, beautiful bill," Congress, too, delivered the president a victory that will further extend his power.
"There's no question that it's a capstone to what has been a very strong last few weeks for President Trump,” said Lanhee Chen, a fellow at the Hoover Institution, a think tank, and a former adviser to Republicans Mitt Romney and Marco Rubio.
In acceding to Trump’s wishes, Republican lawmakers pushed past their non-partisan budget office and Senate parliamentarian, mega-donor Elon Musk, bond market fears about U.S. debt, and their personal doubts about whether the bill’s benefit cuts could shorten their constituents' lives or their own political futures.
Nonpartisan forecasters say the legislation will add $3.4 trillion to the nation's $36.2 trillion in debt, a prediction many Republicans contend overlooks future economic growth from business tax cuts.
The bill isn’t popular with many Americans: 49% oppose the legislation, while only 29% favor it, according to recent polling by the nonpartisan Pew Research Center. Pew said majorities expressed concern that the legislation would raise the budget deficit and hurt lower-income people while benefiting the wealthy.
The White House disputed the polling data, insisting that internal polls across the country had found great support for many specific provisions of the law.
Republican voters do want Trump to rule with little interference from lawmakers. Some 64% of Republicans polled by Reuters/Ipsos in June agreed with a statement that the country needs a strong president who can rule without too much interference from Congress or the courts. Only 13% of Democrats agreed.
"It's the rare piece of legislation that can both at the same time be both a big victory for one side but also present some political traps for that same victorious side," Chen said.
GIFTS, GOLF AND GOADING
Trump spent recent days wooing small groups of Republican lawmakers from the Senate and House who stopped by the Oval Office or his Sterling, Virginia, golf course.
He handed out branded merchandise and encouraged them not to give Democrats the satisfaction of handing Trump a major defeat, according to people familiar with the outreach. He vented frustration, privately and then publicly, at the idea that Republicans might break ranks.
“FOR REPUBLICANS, THIS SHOULD BE AN EASY YES VOTE,” Trump posted on Truth Social after midnight Thursday as the bill struggled to gain sufficient votes to clear a procedural hurdle. “RIDICULOUS!!!”
A senior White House official told reporters after the final vote on Thursday that Trump was deeply involved in the production of the legislation, going over it line-by-line with senior advisers, including Treasury Secretary Scott Bessent, and working through "endless" late-night phone calls with members of Congress.
Trump started working the phones at 5:30 a.m. on Thursday in the run-up to the vote, leveraging relationships built during dinners and engagements at the White House and at his Florida estate in Palm Beach, the official said.
Ultimately, only two House Republicans ended up joining Democrats to vote against the bill.
Hyma Moore, a Democratic strategist, said Trump will pay little long-term political price for pushing an unpopular bill because he is a term-limited president. Republicans seeking future office may have to deal with the consequences, however.
Deep cuts to Medicaid and food assistance along with growing U.S. government debt are certain to figure in the 2026 midterm elections, when Democrats hope to take advantage of the longstanding tendency of voters to hand the opposition party more control of Congress.
Two Republicans, Representative Don Bacon of Nebraska and Senator Thom Tillis of North Carolina, have already announced their retirements in recent days after clashing with Trump, potentially giving Democrats an easier path to pick up those seats.
"He’s a lame duck; there’s not much of a price he can pay at this point,” Moore said of Trump. “Next step is more GOP (Republican) infighting as the primaries shape up.”
While Republican lawmakers in tough districts fight to keep their jobs, the bill they just passed will empower Trump to govern as freely as ever.
Even before the last vote on U.S. President Donald Trump's sweeping tax-cut and spending bill was counted, Republicans and Democrats in Congress began gaming out how to use it to gain an edge in the 2026 midterm elections.
Midterm elections traditionally punish the party of the president in office, giving Democrats hope of recapturing control of at least one chamber of Congress, where Republicans now hold full control. They view the Trump bill's cuts to Medicaid and food assistance as ready ammunition for their future campaign.
"There are House Republicans now, this morning, who are about to sign their political obituary with this vote," Representative Brendan Boyle told Reuters hours before the legislation passed the House of Representatives 218-214.
"They are literally walking the plank for Donald Trump," the Pennsylvania Democrat said.
Republicans contend that the legislation's permanent business tax breaks will goose the economy ahead of the November 2026 election, leading to job growth, higher wages, and lower prices for groceries and energy.
"The American people are going to see great benefits from this bill, and they're going to know which party was fighting for them," said House Majority Leader Steve Scalise, the chamber’s No. 2 Republican.
"The Democratic party still doesn't know why they lost in November. They're going to be reminded of that next year when they lose again," the Louisiana Republican predicted.
But polling data, independent political analysts, and the impending retirement of two of the few Republicans who have been willing to challenge Trump tell a more complicated story about what American voters might have in mind more than a year into the future.
For one thing, Republicans appear to have their work cut out for them when it comes to selling voters on the legislation, which they say makes good on the campaign promises that brought them and Trump victory in 2024.
Forty-nine percent of Americans oppose the bill, while only 29% favor it, according to recent polling by the nonpartisan Pew Research Center. Pew said majorities expressed concern that the legislation would raise the budget deficit and hurt lower-income people while benefiting the wealthy.
Nonpartisan forecasters say the legislation will add $3.4 trillion to the nation's $36.2 trillion in debt, a prediction that many Republicans contend overlooks future economic growth from business tax cuts.
MEDICARE CONCERNS
Internal Republican polling has also shown that even in districts held by the party, voters strongly oppose cuts to the Medicaid healthcare program for lower-income Americans and federally subsidized private health insurance, which the nonpartisan Congressional Budget Office predicts could leave nearly 12 million Americans without health insurance.
"They're certain to remember losing their healthcare or food assistance, if that happens, and most will blame the governing party, the Republicans," said Larry Sabato, director of the University of Virginia Center for Politics.
But Republicans shrugged off the dangers of voter blowback and predict that any ill-effects from the legislation, which includes work requirements for able-bodied Medicaid recipients, will not be felt until after the 2026 election.
"None of this stuff with Medicaid even impacts anybody for two years," said Republican Representative Mike Flood, who has weathered stormy town hall meetings in his Nebraska district this year.
Paul Sracic, an adjunct fellow at the conservative-leaning Hudson Institute, also argued that Medicaid cuts would prove too complicated and come too late to have a big impact on voters.
"Politics is about simplifying things. The Medicaid cuts are somewhat complicated, whereas extending the current tax regime is easy for people," he said.
Scalise and other Republicans predicted voters would see early benefits from the legislation's tax breaks for tipped income, overtime pay, and car loan interest payments, which begin this year.
Control of the House is likely to depend on the election outcome in about three dozen of the 435 House districts that are viewed as competitive by the three main U.S. nonpartisan political ratings services. Republicans currently hold a narrow 220-212 House majority.
About half of those seats are held by Republicans, among which the most vulnerable is Representative Don Bacon's Nebraska swing district. A five-term Republican centrist, Bacon announced his retirement last month after clashing with Trump over funding priorities and the tenure of Defense Secretary Pete Hegseth. His district, which was carried by Democrat Kamala Harris last year and by former President Joe Biden in 2020, is seen by some analysts as tipping in Democrats' favor.
Republicans face much better odds protecting their 53-47 seat Senate majority. Democrats have to defend three open seats in Michigan, Minnesota, and New Hampshire next year, while fending off a determined Republican effort to unseat Democratic Senator Jon Ossoff in Georgia.
But Democrats have a new opportunity in North Carolina, where Senator Thom Tillis announced that he would retire as he prepared to oppose the Trump legislation in the Senate due to cuts in Medicaid funding. Trump has floated the name of his daughter-in-law and former Republican National Committee co-chair Lara Trump as a possible replacement.
Another vulnerable Republican is Senator Susan Collins, who joined Tillis and fellow Republican Senator Rand Paul in voting against the Trump legislation alongside Democrats.
Some lawmakers and analysts contended that Trump's legislation would make no difference to voters in 2026.
"Republican voters will parrot the talking points of their leaders and Democrats will do the same," Sabato said.
President Donald Trump's tax-cut and spending bill, which passed Congress on Thursday, averts the near-term prospect of a U.S. government default but makes America’s long-term debt problems even worse.
Republican lawmakers in the House of Representatives approved the bill that will extend Trump's 2017 tax cuts, authorize more spending on border security and the military, make steep cuts in Medicare and Medicaid, and add trillions to the government's debt. Trump is expected to sign the bill into law.
As part of the tax package, lawmakers raised the U.S. government's $36.1 trillion borrowing limit that it was projected to hit later this summer by $5 trillion – a move that will assuage concerns over a possible default on U.S. debt.
Analysts had estimated that the so-called X-date, when the Treasury would no longer be able to pay all of its obligations without an increase or suspension of the debt limit, could have occurred at the end of August or in early September.
Longer term, however, the bill has largely been seen as bad news for the U.S. bond market and the nation's fiscal health. It will add $3.4 trillion to the nation's debt over the next decade, nonpartisan analysts have estimated.
That would exacerbate concerns over additional bond supply and dwindling demand for U.S. Treasuries that have been a key driver of financial markets in recent months.
"The bill contributes to some of the structural concerns around Treasuries, concerning No. 1, ongoing fiscal deficit and elevated debt levels, and No. 2, inflation," said Mike Medeiros, macro strategist at Wellington Management.
BlackRock warned on Monday that foreign buyers were already souring on American debt. There was a real risk that demand for the $500 billion in debt the U.S. issues every week will fall even more and push borrowing costs higher.
"We’ve been highlighting the precarious position of the U.S. government’s indebtedness for some time now, and, if left unchecked, we view debt as the single greatest risk to the 'special status' of the U.S. in financial markets," BlackRock's investment managers said in a note.
The bill is projected to reduce tax revenues by $4.5 trillion, reduce spending by $1.2 trillion and cost 10.9 million people their federal health insurance over the next decade, according to estimates from the Congressional Budget Office.
The legislation also stokes economic growth by allowing businesses to fully expense equipment purchases as well as research and development costs, and provides other tax breaks.
Some investors, however, worry the debt overhang could curtail the economic stimulus in the bill, which Trump refers to as the "One Big Beautiful Bill".
Campe Goodman, fixed-income portfolio manager at Wellington Management Company, said he expected the bill to add as much as 0.5% to economic growth next year, but that the market was too complacent about the long-term risk of higher borrowing costs.
"We believe the One Big Beautiful Bill will accelerate corporate earnings growth, which ultimately will drive equity values," said Ellen Hazen, chief market strategist at F.L. Putnam Investment Management. "But this could lead to higher-for-longer Treasury rates, making many fixed-income investments somewhat less attractive over the longer term," she said.
Benchmark 10-year Treasury yields were higher on Wednesday after days of decline, with the increase partly attributed to fiscal concerns agitating investors. Yields rise when bond prices drop.
Andrew Brenner, head of international fixed income at National Alliance Capital Markets, said Wednesday's selloff was a sign that so-called bond vigilantes – investors who punish bad policy by making it prohibitively expensive for governments to borrow – were circling the market.
"The Vigilantes want to see more deficit cutting... Their view is that Trump and Congress have not done enough," he wrote in a note to clients on Wednesday.
DEBT LIMIT RELIEF
By raising the U.S. federal borrowing limits, the bill removes the low-probability but high-impact risk of a U.S. debt default, which could have catastrophic consequences for global markets.
In recent weeks, the interest rate on some Treasury debt due in August had risen more than yields of short-term Treasury bills coming due around the same time, a sign investors were getting nervous about the approaching X-date.
"I think (the passage of the bill) takes some of the debt ceiling risks away, so yields on bills maturing in August might come down a little bit," said Vinny Bleau, director of fixed-income capital markets at Raymond James in Memphis.
Overall, the reaction of the bond market to the bill approval has been relatively muted. An expansion in deficits had already been priced in with Trump's return to the White House in January, and investor focus has shifted in recent weeks to economic growth concerns.
To be sure, many market participants said the passage of the bill was secondary to other key market drivers. The benchmark S&P 500 Index (.SPX) closed at a record high on Wednesday, lifted by gains in tech stocks and progress on U.S. trade agreements.
A slowdown in economic data in recent weeks has also bolstered expectations for interest rate cuts by the Federal Reserve this year, contributing to optimism in stocks and bonds, although a blowout jobs report on Thursday dampened hopes for any immediate easing in monetary policy.
"It's not going to be the overall driving factor (for the market)," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
"It's earnings first and then the Federal Reserve," he said.