House Republicans approved a domestic policy bill to enact President Trump’s agenda, prevailing by a single vote after a bitter fight over tax and spending priorities that had divided their conference.
The legislation would slash taxes, providing the biggest savings to the wealthy, and steer more money to the military and immigration enforcement, while cutting health, nutrition, education and clean energy programs to cover part of the cost. To win votes for passage, Republican leaders accelerated the implementation of work requirements in the Medicaid program and the repeal of clean energy tax credits under the Inflation Reduction Act, among other changes.
Republicans in the Senate have said they want to make major modifications to the House product, but it’s still unclear what those would look like.
Here is a look at the bill, and the biggest remaining areas of disagreement within the party.
Cutting taxes
The bottom line: The heart of the bill is a roughly $4 trillion tax cut that would lock in many of the tax cuts Republicans passed in 2017, including lower marginal income rates, a larger standard deduction and a higher threshold for the estate tax, with some tweaks.
The measure also includes several new, temporary tax cuts that Mr. Trump campaigned on, including his promises not to tax tips or overtime. His pitch not to tax Social Security benefits takes the form of a bonus $4,000 deduction available to Americans 65 and older, with the benefit shrinking at higher income levels. Americans would also be able to deduct interest on car loans from their taxable income, though the car has to be made in the United States.
The reductions would last only through 2028, as would a $1,000 addition to the standard deduction and a $500 bonus to the child tax credit, which now maxes out at $2,000. Children born between Jan., 1, 2025, and Jan. 1, 2029 would receive $1,000 deposited in a so-called “Trump account” that is invested in the stock market.
Businesses would receive several tax cuts, including valuable deductions for research and investment spending, as well as a new tax break for building factories. A deduction available to the owners of many businesses would become slightly more generous and be extended indefinitely.
The bill also would hike taxes on universities, as well as some noncitizens and their families. A tax on the investment income that university endowments earn would rise substantially, from 1.4 percent to as high as 21 percent. Immigrants authorized to live in the United States — but who are not citizens or green card holders — would be barred from receiving tax credits covering the cost of health insurance premiums. And tighter eligibility rules for the child tax credit would take the benefit away from roughly 2 million children.
The sticking points: The biggest problem for the tax plan in the House was the state and local tax deduction. Under pressure from Republicans from high-tax states like New York, who demanded a higher cap, the final bill would quadruple the current $10,000 limit to $40,000. The cap would shrink for people making more than $500,000.
Scaling back Medicaid
The bottom line: The bill makes major changes to reduce the cost of the health insurance program for the poor and disabled. The centerpiece of those efforts is a strict work requirement for childless adults without disabilities, which would require beneficiaries to document 80 hours of monthly work, or prove they qualified for an exception, or else risk losing their benefits. Those new rules would have to take effect by the end of 2026, after the next midterm election, though states could opt to adopt them sooner.
House leaders moved up the implementation date, originally slated for 2029, at the behest of fiscal hawks who demanded larger cuts. But the new timetable may be hard for some states to hit.
More immediately, the legislation would make it easier for states to cancel people’s coverage by allowing them to increase paperwork requirements and drop those who don’t respond to requests to verify their income or residency. It also would require states to impose co-payments for a wide array of medical services for adults on Medicaid who live above the poverty line, a policy some Democrats described as a “sick tax.”
Another provision would reduce Medicaid funding to states that use their own tax revenues to provide health coverage to undocumented immigrants, a change that could affect financing for 12 mostly Democratic-controlled states. The legislation would bar Medicaid from providing funding to Planned Parenthood as long as the organization continued to provide abortions, and would bar Medicaid from covering gender affirming health care to any beneficiaries. And the bill would limit strategies that states have developed to tax medical providers and pay them higher prices for Medicaid services.
Before the last-minute changes, the Congressional Budget Office estimated that the Medicaid changes would cause 7.6 million more Americans to be uninsured at the end of a decade, while reducing federal spending on health care by more than $800 billion. That estimate will be updated as the office continues to analyze the final bill text.
The sticking points: Democrats have made the Medicaid changes the main focus of their critique of the bill, arguing that Republicans are slashing health coverage for poor Americans to finance tax cuts for the rich. In an effort to insulate their most vulnerable incumbents from backlash, G.O.P. leaders omitted overhaul proposals that would have permanently changed the structure of the program. But one populist Republican, Senator Josh Hawley of Missouri, has called the cuts a nonstarter, saying they amount to “taxing the poor to give to the rich.”
Changes to Obamacare
The bottom line: The law makes numerous changes to the functioning of the Obamacare marketplaces and the financing of tax credits that help people who use it buy insurance. Those changes will save the government more than $100 billion, but will result in millions of Americans becoming uninsured if they fail to adhere to new paperwork requirements or can no longer afford insurance premiums. Because the budget office score is not final and does not include last-minute changes, the precise effects have not been calculated.
Last-minute revisions to the bill also would fund a canceled set of Obamacare payments for insurers known as cost-sharing reductions. The change will lower the value of subsidies and make insurance more expensive for many purchasers, reducing federal spending overall. It also prevents health plans that receive the funding from offering coverage for abortions, which could change benefit packages and conflict with laws in numerous states.
Ending clean energy programs
The bottom line: The bill would quickly end most of the big tax credits for clean energy contained in the Inflation Reduction Act of 2022. Many of those incentives were expected to last a decade and have so far led businesses to announce more than $841 billion in investments, from wind farms in Wyoming to battery factories in Georgia.
A $7,500 tax break for buyers of electric cars would largely phase out by the end of 2025, with a one-year extension for automakers that have not sold many models yet. Tax credits for low-emissions electricity sources such as wind, solar, batteries and geothermal would disappear entirely, with a small exception for companies that have started construction within 60 days after the bill becomes law and finish by the end of 2028. That’s a narrow window that many projects currently being planned won’t be able to meet.
In the final hours, House Republicans carved out an exception for nuclear power: A company building a new nuclear reactor can still claim a significant tax break as long as it begins construction by the end of 2028.
The bill would impose new “foreign entity of concern” restrictions on tax breaks for both power plants and factories that build solar panels, batteries or other low-carbon technologies by disqualifying companies that use components from China. That’s a steep hurdle, since China dominates global supply chains. A subsidy for making hydrogen fuels would also end this year.
Not all energy sources were affected. A tax credit for biofuels, which is popular in farm states, received a four-year extension in the bill. And a credit for capturing carbon dioxide from polluting facilities and burying it underground, which is backed by oil and gas companies, was mostly kept intact.
Other portions of the bill would expedite federal approvals for oil and gas projects in exchange for up to $10 million in fees, scrap Biden-era rules on tailpipe pollution from cars and trucks and repeal an E.P.A. program aimed at curbing methane leaks from oil and gas operations. The legislation also reduces funding for the Energy Department’s Loan Programs Office, which has nearly $400 billion in lending authority for emerging technologies.
The sticking points: Slashing the energy credits has been contentious even among some Republicans, since more than three-quarters of the investments driven by the Inflation Reduction Act were set to occur in red districts. Some Senate Republicans have said they might try to protect certain incentives, such as for geothermal power or hydrogen fuels, to encourage innovation and bolster U.S. energy security.
Slashing food stamps
The bottom line: In a bid to save money and restrict benefits, the bill would make a series of changes to scale back the Supplemental Nutrition Assistance Program, or SNAP, which provides monthly aid known as food stamps to about 42 million low-income people.
Under the proposal, food stamp recipients between the ages of 18 and 64 would have to obtain work in order to receive federal aid. That mandate would also apply to parents with children 7 and older. Current law subjects only beneficiaries up to age 54 to work requirements, and carves out parents with dependents.
Additionally, the bill would force states to shoulder some of the costs of SNAP, which historically has been funded by the federal government. It would limit the ability of future administrations to raise food stamp benefit amounts. And SNAP would be restricted to U.S. citizens and lawful permanent residents.
By Wednesday, the nonpartisan Congressional Budget Office had not released an analysis about the full effects of these and other changes. Past reports about similar proposals have found that strict work requirements could result in millions of food stamp recipients losing access to benefits.
The sticking points: Some Republicans from districts with high concentrations of food stamp recipients have balked in the past at cuts to the program, and insisted on allowing states to relax work requirements, which the bill would limit their ability to do. But so far, there has been no outcry in the G.O.P. against the SNAP cuts.
Boosting national security and immigration enforcement
The bottom line: The plan would devote an additional $150 billion in military spending, to help boost shipbuilding efforts, and to build a new space-based missile defense system Mr. Trump has proposed that the military is calling Golden Dome.
It also includes about $175 billion in new spending to enforce Mr. Trump’s ambitious anti-immigration agenda, including for bulking up the barriers at the nation’s southern border and for additional Border Patrol agents and facilities. Those measures are considered the least controversial in the legislative package and are meant to entice Republicans to vote for it.
Cutting education programs
The bottom line: The bill would slice $330 billion out of student loan spending over a decade. The biggest change would eliminate for new borrowers the Biden-era student loan repayment program known as SAVE — which ties loan payments to income and household size — as well as the Pay As You Earn plan and the Income-Contingent Repayment plan.
It would replace those with a single repayment plan that would be more costly for many students.
Total federal loan amounts would be capped by year and by program for graduate student loans, and new limits would be placed on how much parents can borrow to pay for their children’s tuition.
The bill also would make it more difficult for part-time students to obtain Pell Grants, increasing the number of credits per semester required for the maximum award from 12 to 15, and requiring them to be enrolled at least half of the time to qualify at all. But it would allow Pell Grants to be used for shorter-term programs that earn students professional certifications.
Raising the debt ceiling
The bottom line: The legislation would increase the nation’s statutory debt limit by about $4 trillion. Treasury Secretary Scott Bessent said earlier this month that the United States could run out of money to pay its bills by August if Congress does not raise or suspend the nation’s debt limit.
Many ultraconservative Republicans have long prided themselves on refusing to back any increase to the nation’s borrowing cap, and refused to do so in December even at Mr. Trump’s urging. But some have conceded they would rather raise the debt limit through the reconciliation bill — which allows them to pass legislation without a single Democratic vote — to deprive the minority party of any negotiating leverage.
The debt limit increase could be a sticking point for fiscal conservatives in the Senate. Already, Senator Rand Paul of Kentucky has said he would oppose the reconciliation bill if the debt-limit provision were not removed.
Michael Gold contributed reporting.
Margot Sanger-Katz is a reporter covering health care policy and public health for the Upshot section of The Times.
Andrew Duehren covers tax policy for The Times from Washington.
Brad Plumer is a Times reporter who covers technology and policy efforts to address global warming.
Tony Romm is a reporter covering economic policy and the Trump administration for The Times, based in Washington.
Catie Edmondson covers Congress for The Times.
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