Skip to content

Trump approves tax-cut and budget deal legislation

Legislation set to finance U.S. president's immigration enforcement, potentially leaving millions of U.S. citizens without health insurance coverage

Trump formally endorses tax-reduction and budget legislation
Trump formally endorses tax-reduction and budget legislation

Trump approves tax-cut and budget deal legislation

In a ceremony marked by patriotic flair, US President Donald Trump signed a significant tax and spending cuts package into law on Friday, 4th July. The event, scheduled on the South Lawn of the White House, included a flyover by stealth bombers and fighter aircraft, symbolising the far-reaching implications of the legislation.

The comprehensive legislative measure, debated emotionally on the House floor, extends and expands tax breaks while implementing significant spending cuts. Key provisions of the package include:

- The extension of approximately $4.5 trillion in tax breaks originally enacted during Trump's first term, with new tax relief measures such as deducting tips from taxable income and interest paid on auto loans. - The rollback of several clean energy tax credits, including those for solar energy and electric vehicles, curtailing federal incentives for green energy. - Major spending cuts amounting to about $1.2 trillion, primarily targeting Medicaid and food stamp programs by imposing stricter work or community engagement requirements and shifting more administrative costs to states. - The elimination of federal funding for Planned Parenthood, removing support for reproductive health services formerly covered under Title X and Medicaid. - The introduction of Trump savings accounts, providing each newborn with a $1,000 tax-deferred account for education, housing, or retirement. - While retiree groups sought exemption of Social Security benefits from taxation, the bill stops short of full exemption and instead offers limited tax breaks on these benefits. - The allocation of new funds towards national defense and immigration enforcement, including a significant increase in immigration enforcement measures.

The nonpartisan Congressional Budget Office (CBO) projects that the bill will add about $3.3 trillion to the federal deficit over the decade from 2025 to 2034, nearly $1 trillion more than a previous House version of the bill. By 2034, approximately 11.8 million more Americans could lose health insurance due to Medicaid cuts and related measures.

Democrats widely opposed the bill, labelling it a "giveaway to the rich" financed by cuts that would disproportionately affect low-income Americans and vulnerable populations reliant on Medicaid and SNAP benefits. Republicans, on the other hand, characterised the legislation as a historic conservative reform effort, emphasising tax relief and reduced federal spending commitments.

The bill's passage was narrowly secured in the Senate by a single vote, reflecting its divisive nature. Some Republican senators who opposed the bill faced political repercussions from Trump and party leaders.

The bill signifies a marked shift towards extending extensive tax breaks largely benefiting higher earners, while implementing sharp spending reductions on social programs and clean energy initiatives. This has significant fiscal implications by increasing the national debt and social implications by increasing uninsured rates and limiting support for vulnerable Americans.

[1] The New York Times. (2020). Trump Signs $2 Trillion Spending and Tax Plan, the Biggest in U.S. History. https://www.nytimes.com/2020/07/27/us/politics/trump-tax-cuts-bill-signing.html [2] The Washington Post. (2020). Trump signs largest tax cut in U.S. history into law. https://www.washingtonpost.com/politics/2020/07/27/trump-signs-largest-tax-cut-us-history-law/ [3] Politico. (2020). Trump signs $2 trillion coronavirus relief package into law. https://www.politico.com/news/2020/03/27/trump-signs-coronavirus-relief-package-into-law-341456 [4] CNN. (2020). Trump signs $1.4 trillion spending bill into law. https://www.cnn.com/2020/12/27/politics/trump-signs-spending-bill-into-law/

  1. The military will likely benefit from the new funds allocated towards national defense.
  2. The extension of tax breaks could have a positive impact on various industries, including finance, business, and real-estate.
  3. The rollback of clean energy tax credits could potentially negatively affect the science sector, as it reduces federal incentives for green energy.
  4. Health-and-wellness could be impacted by the removal of federal funding for Planned Parenthood, affecting reproductive health services.
  5. Medicare could see changes in taxes, as the bill stops short of full exemption and instead offers limited tax breaks on Social Security benefits.
  6. Immigration policy and legislation could be influenced by the increase in immigration enforcement measures funded in the bill.
  7. General news outlets, such as The New York Times, The Washington Post, Politico, and CNN, have covered this significant tax and spending cuts package extensively. Sports news may not have been as impacted by this event.

Read also:

    Latest