Tax cuts, immigration crackdown, $5 trillion debt limit: Key takeaways from Trump’s $3.3 trillion ‘One Big Beautiful Bill’

US President Donald Trump and US First Lady Melania Trump - File Photo

In a dramatic vote that required Vice President JD Vance to break a tie, the U.S. Senate has passed President Donald Trump’s nearly $3.3 trillion ‘One Big Beautiful Bill Act’ – a sprawling tax and spending package that enshrines many of Trump’s top priorities into law.

From permanent tax cuts and sweeping immigration crackdowns to cuts in Medicaid and a controversial $5 trillion debt ceiling hike, the bill represents one of the most consequential and polarising pieces of legislation in recent American history.

As it heads back to the House of Representatives for final approval, let’s take a look at 10 highlights of the bill and their far-reaching implications.

$3.3 trillion increase to national debt: The Congressional Budget Office (CBO) projects that the bill will add $3.3 trillion to the national debt over the next decade. This includes interest costs and marks one of the most expensive legislative packages in US history.

Permanent extension of 2017 tax cuts: After taking office in 2017, Trump passed the Tax Cuts and Jobs Act, which lowered taxes and raised the standard deduction, mainly benefiting high earners. Those cuts are set to expire this year, but his new bill makes them permanent and further increases the standard deduction by $1,000 for individuals, $1,500 for heads of households, and $2,000 for married couples, until 2028.

New tax breaks for seniors, overtime, and tipped income: Tax breaks on tipped income (especially for restaurant workers), relief on overtime earnings, and additional benefits for senior citizens on fixed incomes.

Steep cuts to Medicaid and social programs: The Bill imposes $1.2 trillion in cuts to Medicaid and food stamps by tightening eligibility and requiring many recipients to work. Critics argue this could reduce healthcare and food security for millions.

$5 trillion debt ceiling hike: To avoid a looming default, the bill raises the US borrowing limit by $5 trillion, giving the government more room to spend. At the same time, approving $5 trillion in new borrowing could worsen the national debt, which has already jumped from $23 trillion in 2020 to over $36 trillion, mainly due to pandemic spending, rising interest rates, and budget deficits.

Immigration crackdown gets big boost: Tens of billions of dollars are allocated to fund Trump’s immigration enforcement, including expansion of detention facilities (like the controversial "Alligator Alcatraz"), increased ICE operations and border wall infrastructure.

Big blow to renewable energy: The Bill will make it harder to develop wind and solar energy projects, despite the removal of some contentious provisions. The Senate dropped a proposed excise tax on solar and wind energy projects that don't meet strict standards after last-minute negotiations with key Republican senators seeking better terms for renewables.

Deep divisions over State & Local Tax (SALT) deductions: The bill contains a controversial provision to limit or repeal SALT deductions, affecting taxpayers in high-tax states like New York, New Jersey, and California. This is a sticking point for moderate Republicans in the House.