Economy & public financesUnited States

In forceProvisions take effect on staggered dates, from 2025 to 2030 and beyond.

« One Big Beautiful Bill Act » (Public Law 119-21): tax cuts, Medicaid and SNAP changes, higher debt limit

The 2025 budget reconciliation law, signed on 4 July 2025, makes the 2017 tax cuts permanent, adds temporary deductions for tips, overtime and seniors, raises the cap on the state and local tax deduction, adds work requirements to Medicaid and SNAP, phases out several clean-energy tax credits, funds immigration enforcement and defense, and raises the federal debt limit by $5 trillion. The CBO estimates it adds $3.4 trillion to deficits over 2025–2034 relative to its January 2025 baseline. Known as the « One Big Beautiful Bill Act », it has no official short title: the Senate struck it before passage.

Updated: November 3, 2026Next milestone: January 1, 2027 — Medicaid community engagement (work) requirement: deadline for states to apply it

At a glance

Reference text

Public Law 119-21 — An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14 (no official short title; popularly called the « One Big Beautiful Bill Act »)[1][2]

No. Public Law 119-21 (H.R. 1, 139 Stat. 72) · July 4, 2025

Read the text ↗

Carried by

  • Donald Trump[2][18]President of the United States · 2025 · Initiator
  • Jodey Arrington[21][3]Chairman of the House Budget Committee, sponsor of H.R. 1 · 2025 · Initiator
  • Centers for Medicare & Medicaid Services (CMS)[14]Federal agency — rules for the Medicaid community engagement requirement · 2026 · Implementation

Implementation

Status

In force

since July 4, 2025[2][1]

Provisions take effect on staggered dates, from 2025 to 2030 and beyond.

Stated objective

Extend the 2017 tax cuts, lower taxes on tips, overtime and seniors, secure the border and boost growth and wages.[18][19]

According to the White House and its Council of Economic Advisers (June–August 2025)

  • Additional annual real GDP growth (« at least »)

    1.1%

    percentage points a year · according to the White House Council of Economic Advisers (analysis of 25 June 2025, bill before final passage)[18]

    The same analysis claims real wages up to $7,200 a year higher and deficits up to $11.1 trillion lower.

Main measures

  • Individual income tax provisions of the 2017 Tax Cuts and Jobs Act (rates, larger standard deduction, no personal exemptions), due to expire at the end of 2025, made permanent.[1]
  • New deductions for tax years 2025 to 2028: qualified tips up to $25,000 a year, the premium part of overtime pay up to $12,500 ($25,000 for couples) — both phased out above $150,000 of income ($300,000 for couples) — and an extra $6,000 for each person aged 65 and over, phased out above $75,000 ($150,000 for couples).[1]
  • Cap on the state and local tax (SALT) deduction raised from $10,000 to $40,000 in 2025 and $40,400 in 2026, then up 1% a year through 2029; it is reduced by 30% of modified income above $500,000 (2025, indexed), never below $10,000, and returns to $10,000 in 2030.[1]
  • Medicaid: work or « community engagement » requirement for expansion adults aged 19 to 64 (80 hours a month, with exemptions) by 1 January 2027, and eligibility checks every six months for these adults.[1][14]
  • SNAP food assistance: work requirements for able-bodied adults extended to those aged up to 65 (previously 55) and to parents of children aged 14 or over; states pay 75% of administrative costs from fiscal year 2027 and, from fiscal year 2028, 0% to 15% of benefits depending on their payment error rate.[1][21]
  • Clean-energy credits from the 2022 Inflation Reduction Act cut back: clean vehicle credits end for vehicles acquired after 30 September 2025; wind and solar projects starting construction after 4 July 2026 must be in service by the end of 2027.[1][15]
  • Federal debt limit raised by $5.0 trillion (to $41.1 trillion according to the Congressional Research Service).[1][16]
  • Federal student loans: new Repayment Assistance Plan from 1 July 2026, end of Grad PLUS loans for new borrowers, and only two repayment plans for loans made from that date.[1]
  • Defense: about $150 billion according to the CBO (Title II), including $24.4 billion for integrated air and missile defense. Immigration enforcement: including $46.55 billion for the border infrastructure and wall system.[17][1]

In data

Additional people without health insurance in 2034, by source of the change[12][13](secondary source)

In 2034, relative to CBO’s January 2025 baseline

Additional people without health insurance in 2034, by source of the change — chart values
ProvisionsCBO estimate (2025)
Medicaid and CHIP (Work requirements account for more than half.)7,500,000
ACA Marketplace2,400,000
Medicare (some lawfully present immigrants)100,000

Projection. Excludes the expiry of the enhanced ACA premium tax credits at the end of 2025, which is not part of the law.

Public debt

121.2% GDP

Q2 2026

Federal Reserve Bank of St. LouisSee the card →

Key figures

Increase in debt held by the public at the end of 2034

9.5% of GDP

end of 2034 · Projection

according to the CBO, relative to its January 2025 baseline[9][7]

Deficits up $3.4 trillion over 2025–2034, $4.1 trillion including $718 billion of extra interest; 11.5 points of GDP if the law’s temporary tax provisions were made permanent.

Additional people without health insurance

10,000,000

in 2034 · Projection

according to the CBO (estimates of July–August 2025), as reported by Georgetown University’s Center for Children and Families and KFF[12][13](secondary source)

Change in resources of the poorest 10% of households

-3.1%

average 2026–2034, % of income · Projection

according to the CBO (letter of 11 August 2025), relative to its January 2025 baseline[10][11]

About −$1,200 a year, mainly from Medicaid and SNAP cuts; the richest 10% gain about $13,600 a year. Excludes interest costs and macroeconomic effects.

Budget balance

-5.8% GDP

2025

Federal Reserve Bank of St. LouisSee the card →

Timeline

  1. Under debate

    Passed by the House of Representatives (215–214, 1 present), sent to the Senate[4]

  2. Senate passes an amended version 51–50, the Vice President breaking the tie[20][6][1]

    Before the vote, a point of order raised by the Democratic leader under the Senate’s « Byrd rule » (section 313(b)(1)(A) of the Congressional Budget Act) struck page 1, lines 3 to 5 — the short title « One Big Beautiful Bill Act »; the enacted law has none.

  3. Adopted

    Final passage: the House agrees to the Senate version (218–214)[5]

  4. In force

    Signed into law by the President (Public Law 119-21)[2][1]

    Provisions take effect on staggered dates, from 2025 to 2030 and beyond.

  5. End of the clean vehicle tax credits for vehicles acquired after this date[1]

  6. Interim final rule on the Medicaid community engagement requirement published[14]

  7. Student loans: Repayment Assistance Plan opens, Grad PLUS loans end for new borrowers[1]

  8. Deadline to begin construction of wind and solar projects without the end-2027 placed-in-service limit[1][15]

  9. SNAP: states’ share of administrative costs rises from 50% to 75% (fiscal year 2027)[1]

  10. Upcoming — the outcome is not known

    Medicaid community engagement (work) requirement: deadline for states to apply it[1][14]

    Applies to expansion adults aged 19 to 64: 80 hours a month of work, education, job training or community service, with exemptions. States may start earlier; temporary good-faith exemptions cannot run beyond 31 December 2028. Six-monthly eligibility checks for these adults start with renewals from the same date.

  11. Upcoming — the outcome is not known

    SNAP: states start paying part of benefit costs (fiscal year 2028), from 0% to 15% depending on their payment error rate[1]

    For fiscal year 2028 a State may use its fiscal-year-2025 or 2026 error rate. If its fiscal-year-2025 error rate multiplied by 1.5 reaches 20% (about 13.33%), its share starts in fiscal year 2029; if that holds for fiscal year 2026, in fiscal year 2030.

  12. Upcoming — the outcome is not known

    Student loans: deadline for borrowers in phased-out repayment plans to switch plans[1]

  13. Upcoming — the outcome is not known

    Last tax year for the tips, overtime and senior deductions (2025–2028)[1]

  14. Upcoming — the outcome is not known

    State and local tax (SALT) deduction cap returns to $10,000[1]

The debate

Citoyen takes no position: arguments are reported as their authors put them.

According to its supporters

  • Making the 2017 tax cuts permanent avoids a tax increase for most households when they were due to expire at the end of 2025, and the new deductions target tipped workers, overtime and seniors.[1][19]
  • Measured against the baseline used for Senate budget enforcement, which assumes current tax policy continues, the CBO estimates a net deficit reduction of $366 billion over 2025–2034.[8]
  • The White House’s economists expect stronger growth, higher wages and lower deficits over time.[18]

According to its opponents

  • Relative to the CBO’s January 2025 baseline, the law adds $3.4 trillion to deficits over 2025–2034, and $4.1 trillion with interest costs.[7][9]
  • The CBO projects about 10 million more uninsured people in 2034, mostly because of the Medicaid changes.[12][13](secondary source)
  • According to the CBO, resources fall for the poorest households and rise for those in the middle and toward the top of the income distribution.[10]

Indicators to watch

  • Federal budget balance, % of GDP · FRED (OMB)See the card →
  • Public debt, % of GDP · FREDSee the card →
  • Health expenditure, % of GDP · OCDESee the card →
  • Gini index of income inequality · OCDESee the card →
  • Share of people without health insurance · Census Bureauno Citoyen card yet
  • SNAP participation · USDAno Citoyen card yet

Sources

  1. [1]Public Law 119-21 — An act to provide for reconciliation pursuant to title II of H. Con. Res. 14 — U.S. Government Publishing Office (GovInfo), July 4, 2025
  2. [2]Public Laws — 119th Congress, First Session (P.L. 119-21, H.R. 1, approved July 4, 2025, 139 Stat. 72) — National Archives — Office of the Federal Register
  3. [3]Chairman Arrington Delivers Opening Remarks at Committee Markup of One Big Beautiful Bill Act — House Committee on the Budget, May 16, 2025
  4. [4]Final Vote Results for Roll Call 145 — H.R. 1, On Passage (215 yeas, 214 nays, 1 present) — Clerk of the U.S. House of Representatives, May 22, 2025
  5. [5]Final Vote Results for Roll Call 190 — H.R. 1, On Motion to Concur in the Senate Amendment (218–214) — Clerk of the U.S. House of Representatives, July 3, 2025
  6. [6]Congressional Record — Daily Digest (Senate passage of H.R. 1, as amended, Vote No. 372, Vice President voting yea) — U.S. Government Publishing Office (GovInfo), July 1, 2025
  7. [7]Estimated Budgetary Effects of Public Law 119-21, relative to CBO’s January 2025 baseline — Congressional Budget Office (CBO), July 2025
  8. [8]Estimated Budgetary Effects of Public Law 119-21, relative to the budget enforcement baseline for consideration in the Senate — Congressional Budget Office (CBO), July 2025
  9. [9]Effects on Deficits and the Debt of Public Law 119-21 and of Making Certain Tax Policies in the Act Permanent — Congressional Budget Office (CBO), August 4, 2025
  10. [10]Distributional Effects of Public Law 119-21 — Congressional Budget Office (CBO), August 11, 2025
  11. [11]CBO analyzes distributional effects of budget act — Thomson Reuters Checkpoint, August 2025 · secondary source
  12. [12]New CBO Health Coverage Estimates of Budget Reconciliation Law — Georgetown University — Center for Children and Families, August 14, 2025 · secondary source
  13. [13]How Will the 2025 Reconciliation Law Affect the Uninsured Rate in Each State? — KFF · secondary source
  14. [14]Medicaid Program; Community Engagement Requirement for Certain Individuals (interim final rule, CMS-2454-IFC) — Federal Register, June 3, 2026
  15. [15]Notice 2025-42 — Beginning of construction for sections 45Y and 48E wind and solar facilities — Internal Revenue Service (IRS), August 2025
  16. [16]The Debt Limit (In Focus IF10292) — Congressional Research Service
  17. [17]Defense funding in the 2025 reconciliation law (H.R. 1; P.L. 119-21), Title II (Insight IN12580) — Congressional Research Service
  18. [18]Analysis: One Big Beautiful Bill Will Boost Wages, Lower Deficits — The White House, June 25, 2025
  19. [19]Americans Are Winning Big with the One Big Beautiful Bill — The White House, August 5, 2025
  20. [20]Congressional Record — Senate, June 30 – July 1, 2025 (H.R. 1: point of order against page 1, lines 3 to 5, sustained; Rollcall Vote No. 372, yeas 50, nays 50, Vice President votes in the affirmative) — U.S. Government Publishing Office (GovInfo), July 1, 2025
  21. [21]Bill status of H.R. 1 (119th Congress): sponsor, actions, titles, CBO cost estimates and CRS summaries — U.S. Government Publishing Office (GovInfo) — Library of Congress / Congressional Research Service data