President Trump’s sprawling domestic policy bill has passed the House and Senate, and now awaits the president’s signature. Below, some answers to questions you may have.
1. Why is it being called a megabill?
This bill is truly enormous, in terms of its:
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Scope: There is no modern precedent for a bill that simultaneously cuts taxes and the social safety net while providing new spending for priorities like immigration enforcement.
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Tax cuts: $4.5 trillion over a decade, most with no expiration date. A major goal was to extend the Trump tax cuts that were passed in 2017 and set to expire, but the cost to the government is higher this time.
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Spending cuts: $1.7 trillion, including a 12 percent cut to Medicaid, an unprecedented reduction in spending on the federal-state health insurance program for poor Americans.
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New spending: $450 billion, including a 150 percent boost to the Immigration and Customs Enforcement budget over the next five years.
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Contribution to the federal debt: Nearly $3.4 trillion as written ($4.1 trillion including interest), and $5.5 trillion if temporary provisions are extended. That’s more than the combination of the 2022 CHIPS Act, the 2021 infrastructure act and the two largest Covid relief bills.
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Number of provisions: 309. Among them are a new $250 fee for the issue of student or worker visas and a $1,000 government contribution to tax-advantaged savings accounts for babies called “Trump accounts.”
2. Will I benefit from, or be hurt by, this bill?
A lot depends on your individual circumstances. Do you have a parent in a nursing home who uses Medicaid? Do you have a child who is going to need a student loan? Do you make a lot of money in tips? Do you plan to put solar panels on your roof? The bill has provisions that affect all of these things and many more, some positive, some negative. In general, most Americans will pay less in federal income taxes under this bill than they would if the tax cuts passed in 2017 were instead allowed to expire.
But Americans at the bottom of the income spectrum will see many of their benefits cut. Most poor Americans don’t pay federal income taxes and won’t get a boost from the tax cut. The bill reduces spending on food assistance and Medicaid, which many poor Americans rely on.
For the most part, the more you earn, the more you are likely to benefit from the bill. Certain tax provisions disproportionately benefit the top 10 percent of earners, such as changes to the tax treatment of local taxes, changes to the estate tax, and a lasting extension of a deduction for certain business income that high earners tend to use the most.
Overall, the package is more regressive than any major law in decades.
3. When will Americans start to feel the effects of the bill?
For a lot of middle-income Americans, this bill mainly prevents taxes from going up. But most of the new tax cuts will kick in quickly, so if you benefit you’ll get some savings when you file taxes early next year. If you are hoping to claim a tax credit to buy an electric vehicle or make your home more energy efficient, you should move fast.
The cuts to social spending, on the other hand, are mostly delayed: Many of the biggest cuts to food assistance and Medicaid are a few years away. Those delays, until after the 2026 midterm elections, can be explained partly by political considerations, and partly because states need time to set up new systems to change the way they administer benefits.
The indirect effects of the bill may come along a less predictable timeline. Because the bill increases federal deficits so significantly, it could affect bond markets, which could ripple into the economy in the form of higher interest rates for mortgages, business loans and other kinds of debt. The bill is also expected to offer a tiny boost to the economy by stimulating certain types of business investment in the short term.
4. Why do Republicans say that the bill won’t add to federal deficits, and that it will actually save $507 billion?
It’s misleading: Every serious analysis of the bill shows that it will increase the federal debt over the long term.
But Republicans have used a gimmick to obscure that fact. The tax cuts passed in 2017 are about to expire at the end of the year, and extending them is estimated to cost $3.8 trillion. Republicans are ignoring those costs by assuming that tax cuts would already be extended, making them appear to cost nothing.
That choice means they can say the bill does not increase deficits. But it does not change the underlying reality that the bill will cause the government to spend much more money than it collects in revenues.
5. Why do Republicans say there are not cuts to Medicaid — just waste, fraud and abuse?
Many of the bill’s changes to Medicaid don’t technically change who is eligible for the program, but they make it harder to sign up and stay enrolled. The bill dials up the paperwork requirements on Medicaid beneficiaries, asking them to renew their plans twice as often, for example.
It also imposes a strict new work requirement on many adult beneficiaries, requiring them to prove they have worked at least 80 hours a month before they can enroll. Many Republican lawmakers have said that Medicaid beneficiaries who do not work enough are cheating the system.
The history of work requirements in Medicaid and other social welfare programs suggests that compliance and documentation challenges trip up far more people than the requirement to work itself. The reality is that many working people will lose their coverage.
6. What about the programs the president has been trying to cut? Does this bill change the N.I.H. budget?
Much of what happens in Washington is described as a “budget” debate, and the bigness of the bill makes it easy to think it encompasses every possible policy involving federal spending. But the megabill actually leaves out some big categories of spending.
The bill was passed using a special fast-track process that allowed Republicans to move the bill through the Senate without risking a filibuster. That process is reserved for some parts of the budget — generally speaking, taxes and programs whose funding is largely automatic and doesn’t require Congress to set aside money each year. (There are a few exceptions, including major new funding for immigration enforcement and defense.)
The part of the budget that is funded every year by Congress, including spending on federal agencies, is usually handled through a separate appropriations process. Congress will probably vote on its next appropriations bills this fall.
The president also releases a “budget” every year, with the White House’s recommendations for Congress. The most recent White House budget recommended steep cuts in government science funding, including a 40 percent cut for the National Institutes of Health. That presidential budget has no force of law on its own. So far, Congress has not embraced any of the recommended cuts to scientific research. The Trump-led N.I.H. has been canceling or pausing some grants anyway, but numerous courts have ruled against them.
7. What about the tariffs?
Tariffs are another signature Trump policy, and he has imposed many of them in recent months. Those tariffs bring in new revenues that also affect deficits and could reduce long-term debt. But they were not a part of this particular legislative package.
The Congressional Budget Office offered some guidance on how it thinks tariffs may affect federal finances, saying they could reduce deficits by trillions of dollars, but it noted that a lot depends on whether they’re lasting. The analysis also highlighted that tariffs will increase the prices of goods and decrease economic output, and affect certain types of business investment.
8. Can you explain the politics around this bill in less than 100 words?
Mr. Trump had instructed Republicans in Congress to pass much of his domestic agenda — what he calls the “big, beautiful bill” — by July 4. A version passed the House in May after Speaker Mike Johnson was able to appease some conservative holdouts. Then the Senate made some major changes and upended longstanding budget norms to pass its version narrowly Tuesday, with Vice President JD Vance casting a tiebreaking vote. Then House members passed the bill again, after staying up all night. Some of those same conservatives said they were opposed at first, but most voted for the bill.
9. What’s one fact I can bring to my Fourth of July cookout?
Among the bill’s 309 provisions are a handful that would benefit Alaska in particular:
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A tax break for Native Alaskan subsistence whaling captains, allowing them to treat more equipment purchases as charitable donations on their taxes.
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A tax break for fishing companies “located in the United States north of 50 degrees north latitude,” allowing them to deduct the full cost of employee meals.
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Tax-exempt status for certain “fisheries in the Bering Sea and Aleutian Islands statistical and reporting areas.”
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Special exceptions for “noncontiguous states” and states with high payment error rates (Alaska’s is the highest) to lessen the effects of cuts to food assistance.
Why? Senator Lisa Murkowski of Alaska was among a handful of Republicans who expressed concerns about the bill’s cuts to Medicaid and food assistance. Leaders needed her vote to pass the bill, and she used this leverage to her state’s advantage. “Do I like this bill? No,” she told NBC News after the vote. “But I tried to take care of Alaska’s interests.”
Alicia Parlapiano is a Times reporter covering government policy and politics, primarily using data and charts.
Margot Sanger-Katz is a reporter covering health care policy and public health for the Upshot section of The Times.
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