President Trump has signed into law his party’s top legislative priorities. Supported only by House and Senate Republicans, the “One Big Beautiful Bill” (dubbed the “Big Ugly Bill” by Democrats) extends the 2017 Trump tax cuts, creates temporary tax breaks for seniors and for workers who earn tips, and spends billions more on immigration control and national defense. Republican lawmakers are ebullient that they have delivered on Trump’s campaign promises.
In contrast, Democrats in Congress decry the distributional effects of tax cuts that favor primarily wealthier Americans. Democrats also point out how Republicans plan to defray some of these costs – such as by slashing safety-net programs for lower-income and disabled Americans. Experts expect the law will cause millions of Americans to lose health insurance by 2034. Millions more face increased food insecurity. And the new legislation will add over $4 trillion over the next decade to the nation’s $36 trillion national debt. Despite the turnout of working class voters for Trump in 2024, even some Republicans admit there’s not much populism in this bill.
Here are three takeaways from the enactment of the GOP’s signature tax and spending bill.
1. This was an intensely partisan vote, on a tight deadline
The House and Senate pulled all-nighters in the final days of the bill’s journey through Congress. But passage was never really in doubt: GOP leaders weaponized impending deadlines and pressured partisans to stick with the team – lest they face the wrath of Trump and his supporters.
With a slim majority, a fractious right wing, and wavering swing-district members, GOP House leaders warned the Senate that changing the House-passed bill would rupture their fragile coalition. Well, Senate GOP leaders all but ignored them. To speed things up and save Republican senators from facing votes in committee sessions on Democrats’ politically treacherous amendments, GOP senators wrote their version behind closed doors. Among other changes, Republicans imposed more Medicaid cuts, bought senators’ votes with a new subsidy for rural hospitals and extra goodies for Alaska, slowed down the repeal of some sustainable energy subsidies, and beefed up spending for border control and defense.
Both flanks of the House GOP folded quickly, adopted the Senate version, and rushed it to the president’s desk. Even House Freedom Caucus members voted for the bill right after many declared they wouldn’t.
Despite the bicameral differences, the House and Senate measures were broadly similar. Most importantly, they packaged together nearly all of Trump’s campaign pledges, allowing lawmakers and their supporters to boast: “Promises made, promises kept.” Focusing on tax cuts and reframing Medicaid cuts as reducing “waste, fraud, and abuse” helped ensure passage.
In an equally important move, GOP leaders – like most legislative chiefs – scaffolded consideration of the GOP bill around two action-forcing deadlines.
One deadline centered on expiration of the U.S. government’s legal debt limit. Treasury officials advised the government would run out of room to issue more debt in August. Increasing the debt limit within this bill made swift passage seem more urgent. The move also broke some House conservatives’ record of never voting to raise the debt limit. That might make it easier for GOP leaders to corral future votes for lifting the debt ceiling.
Leaders also deployed a partisan deadline: Trump wanted to sign the bill into law on July 4th. Symbolic deadlines don’t necessarily work. But this time, leaders successfully used it to help convince rank-and-file GOP legislators to swallow the Senate bill whole. In the end, only two GOP members of Congress mustered the political stamina to vote against the bill – knowing it would take four “no” votes to tank it.
2. Republicans nuked the filibuster, stealthily
The GOP-led Senate detonated a nuclear device on their chamber. The GOP move attracted far less attention than past “nuclear episodes” such as when Democrats banned filibusters of nominations in 2013 and Republicans abolished them for Supreme Court nominees in 2017. But the institutional change is no less important: By undermining the authority of the chamber’s neutral, non-partisan parliamentarian, the move made it far easier for the current Senate, as well as future majorities, to avoid compliance with the “Byrd Rule.” That’s the tool that empowers a minority to block the majority from cramming every legislative priority into a filibuster-proof reconciliation bill – including long-term deficits caused by tax cuts or increased spending.
To understand what just happened, put yourself on the Senate floor. Typically, when a senator raises a “point of order,” the parliamentarian provides guidance (based largely on chamber precedents) to the presiding officer (aka “the chair”) on how to rule on the senator’s procedural objection. Following advice from the parliamentarian is par for the course in most legislative bodies. Doing so reduces uncertainty about which procedural strategies to follow in the future, dampens the risk that the chair will rule based on his or her political interests (rather than the Senate’s), and fortifies the parliamentarian’s reputation as a straight shooter.
Senate Republicans took a different path when GOP leader John Thune (R-S.D.) raised a key point of order during Senate consideration of the bill. Thune basically asked whether making the Trump tax cuts permanent (without paying for them) violated the Byrd Rule ban on increasing the deficit beyond the ten-year lifespan of the bill. In crafting the bill, Senate Republicans had adopted an accounting rule (known as the “current policy baseline“) that essentially zeroed out the cost of renewing the tax cuts, even after the ten-year mark.
Many budget experts anticipated the parliamentarian would advise that using a current policy baseline was not permissible in this context. And without that accounting move, permanent tax cuts would violate the Byrd Rule ban on long-term deficits. Such advice would be highly problematic for Republicans: It takes 60 votes to waive the Byrd Rule and there are only 53 Republican senators. Failure to waive the Byrd Rule would have forced Senate Republicans to rewrite the bill while it was pending on the floor– most likely sunsetting the tax cuts within a few years. That’s why GOP senators refused to discuss the issue with the Senate parliamentarian before the issue came to a head on the chamber floor. Then, Senator Bernie Moreno (R-Ohio) (who was presiding over the Senate at the time) ruled without consulting the parliamentarian, declaring that the GOP’s tax accounting was permissible under federal budget law and so the Byrd Rule ban on long-term deficits was not violated. Critics charged the ruling allowed the GOP to hide the cost of making Trump’s tax cuts permanent by a tune of at least $3 trillion.
That might not sound very nuclear. But it is – and here’s why. First, this ruling diminishes the authority of the Senate’s neutral rules expert, which undermines the fair application and interpretation of chamber rules. And second, regardless of one’s views about the filibuster, the move weakens the Senate as an institution. The more a majority bends the rules to secure its agenda, the lower the political cost for future parties to do the same. Hardball begets more hardball, undermining the resilience of institutional rules.
3. Does this bill mean a future fiscal crisis is more likely?
There could be a number of political and fiscal consequences as well.
Sidestepping the Byrd Rule further undermines fiscal discipline in Congress. In recent decades, senators have perfected a strategy for pursuing policies that increased deficits while still abiding by the Byrd Rule ban on adding to America’s long-term deficits. Republican majorities enacted tax cuts that expired within the envelope of the ten-year bill (creating a “fiscal cliff”). Tax cliffs can be politically valuable: They force Congress to extend tax cuts – lest lawmakers be blamed for raising everyone’s taxes. Similarly, Democrats enacted temporary social programs – such as a one-year expansion of the Child Tax Credit in 2021 – to avoid exacerbating long-term deficits.
The party that controls Congress and the White House can now set fiscal policy without worrying about a filibuster. That will increase the temptation to spend more and collect less revenue. It could also exacerbate the trend practiced by both parties of converting annual appropriations into new spending, just as Republicans did this time by boosting funding for border control and the military. Future Democratic majorities will be tempted to use reconciliation to bolster the social safety net; Republicans will be itching to keep cutting taxes.
Until voters or bond markets give policymakers incentives to care about the government’s escalating debt, the GOP’s nuclear device could bring the nation more swiftly to a future fiscal crisis. With government debt topping $36 trillion and exceeding the nation’s economic output, that day could come sooner than you think.
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