According to multiple media reports the final version of the bill has many positive features, which I will explain in more detail below. Most of them will be effective for the 2025 tax year. Undoubtedly, the BBB is controversial. Not everyone supports every aspect of it. This is what happens when one is attempting to get a consensus among politicians of wide-ranging political beliefs and preferences. But it is a bill that most of us can live with.
It should be noted that not one Dem voted for the bill. It was passed solely by Republicans. This illustrates the ever-widening chasm between the two political parties.
The BBB’s main feature is that it makes the temporary reduced tax rates contained in the 2017 Tax Cuts and Jobs Act permanent. These were set to expire at the end of the year and would have resulted in a massive tax increase for most, if not all, taxpayers, likely triggered a recession, perhaps a serious one, and led to the Dems wresting control of Congress from the GOP in 2026. Thus, I believe it was the key to Trump’s domestic agenda.
Some of the other key provisions:
| Boosted the standard deduction for all taxpayers | Tax year 2025 | Permanent |
| SALT cap expansion | Tax year 2025 | Through 2029 |
| “No-tax-on-tips” deduction | Tax year 2026 (retroactive to 1 January 2025, so claimable on 2025 returns filed in 2026) | Through 2028 |
| “No-tax-on-overtime” deduction | Tax year 2026 | Through 2028 |
| Extra deduction for seniors | Tax year 2025 | Through 2028 |
| Child Tax Credit boost | Tax year 2025 | Through 2028 |
| Estate Tax exemption boost | Tax year 2026 | Permanent |
| Auto-loan interest deduction | Tax year 2025 | Through 2028 |
| Used electric vehicle credit | Active | Ends 2026 |
| Home energy-efficiency credits | Active | Ends 202 |
Student Loans
Major changes to student loans are set for July 2026. Popular repayment plans such as SAVE, Income Contingent Repayment and Pay As You Earn are set to be eliminated, replaced by the new Repayment Assistance Plan or the standard repayment plan.
The Graduate PLUS loan program is also ending, to be replaced with borrowing caps—$100,000 for most graduate students and $200,000 for law and medical students.
Medicaid, SNAP and Other Entitlements -These are the most contentious portions of the BBB and the ones that have drawn the most criticism. The major changes are (1) “able-bodied” adults aged 19 to 64 must work, volunteer, study or train for at least 80 hours per month to qualify, with exemptions for parents of children under 15; and (2) eligibility reviews will be conducted every six months instead of annually. Critics claim this will deny some low-income persons access to adequate healthcare and economic assistance. They add that the CBO has estimated that up to 11 million persons will be affected. A goodly portion of the money to fund the other elements of the BBB are expected to be derived from these cuts. Republicans say their goal is reducing “waste, fraud, and abuse” in these entitlement programs to save hundreds of billions of dollars over the next decade and to pay for other elements of the bill such as the tax cuts, securing the border and defense. They estimate that the bill will shave approximately $600 billion off Medicaid and $230 billion off SNAP over the next decade.
Other provisions: (1) The bill will prohibit states from using their funds to cover undocumented immigrants. Undocumented immigrants are not eligible for Medicaid, but 14 states and the District of Columbia have opted to use their own funds to cover those individuals. This bill would penalize them by reducing their Medicaid funding. The Administration estimates that approximately 1.4 million undocumented immigrants would lose coverage. (2) It increases copays for Medicaid recipients who earn more than the federal poverty level of just over $15,500 for single beneficiaries. They would be required to pay an extra $35 dollar copay in some cases. (3) It bans Medicaid funding to Planned Parenthood as long as the organization provides abortions and abortion services. (4) It prohibits Medicaid funds from being applied to gender transition care, including puberty blockers, hormone treatments and surgery. (5) It will crack down on people who are “double-dipping” in multiple jurisdictions.
The Supplemental Nutrition Assistance Program (SNAP), formerly known as “food stamps” program provides assistance for some 42 million low-income people to purchase groceries. The bill raises the age for work requirements from 54 to 64. Currently, the SNAP is 100% federally funded. The bill requires states to share in at least 5% of SNAP benefit costs commencing in 2028.
| Medicaid work requirements | Commence by 12/31/2026, although individual states may phase in sooner | N/A |
| Medicaid funding changes | 2028 | N/A |
| SNAP work requirements | As early as 2025, though no official timeline has been given | N/A |
| SNAP funding changes | 2028 |
Other provisions:
- The debt ceiling was raised $5 trillion.
- $150 billion will be spent to enhance border security including the border wall, ICE, and other areas.
- $153 billion for defense including the “Golden Dome” missle defense system, shipbuilding and other areas.
- New savings accounts for parents of children born between January 1, 2024 and December 31, 2028.
- Annual and lifetime limits on certain types of student loans.
CONCLUSION
Once again, the Dems have mindlessly opposed something just because Trump was in favor of it. In doing so they voted for the largest tax increase ever, inadequate border security, against improving the economy, favoring illegal aliens over American citizens, and continuing government waste, fraud and abuse, among others. They will have to run on these issues in 2026 and beyond. Already they and their minions in the media are criticizing certain aspects of the bill, notably cuts in entitlements and government spending.
As I said above in a comprehensive bill of this size one can always find something to criticize. It is not a perfect bill; it’s just the best bill that could be passed.
This bill represents a huge gamble for Trump and the GOP. If the economy booms and inflation and unemployment decrease the GOP will likely expand its power in 2026 and Trump will be remembered as one of our greatest presidents. If not, we will all be in mucho trouble.
We Built It Blog by Larry Jacob 