The U.S. House of Representatives passed President Donald Trump's "big, beautiful" tax bill, a significant victory for House Speaker Mike Johnson. The bill, a multi-trillion-dollar piece of legislation, advances Trump's agenda on taxes, immigration, energy, defense, and the national debt, aiming to cut roughly $1.5 trillion in government spending. The bill passed 215 to 214 with Republican Reps. Thomas Massie and Warren Davidson voting against it, along with all Democrats. House Freedom Caucus Chair Andy Harris voted "present."

Speaker Johnson hailed the bill as historic, stating, "It quite literally is morning again in America," while Democratic lawmakers attempted delay tactics. House Minority Leader Hakeem Jeffries criticized the bill, arguing that costs are rising, not going down. Tensions flared as lawmakers debated into the early morning. Rep. Steve Womack warned Jeffries to address the chair rather than directly attacking Republicans.

The bill seeks to permanently extend Trump's 2017 Tax Cuts and Jobs Act (TCJA), eliminate taxes on tips and overtime pay, and give senior citizens a higher tax deduction. It includes new funding for the border and defense, including money for ICE operations and $25 billion to kick-start construction of a "Golden Dome" defense system. Cuts include new work requirements for Medicaid recipients and shifting more cost-sharing burden onto states that expanded Medicaid under the Affordable Care Act (ACA). The legislation also rolls back green energy tax credits from the Inflation Reduction Act (IRA) and cuts the Supplemental Nutrition Assistance Program (SNAP) by roughly 20%.

Democrats accused Republicans of favoring the wealthy, while Republicans argue they are preserving tax cuts and streamlining programs for vulnerable Americans. Rep. August Pfluger stated that the legislation permanently extends Trump's tax cuts and provides unprecedented funding for border security. House Republican leaders released eleventh-hour changes, including a ban on federal funding for transgender adults' medical care and $12 billion in new funding to reimburse states for countering the Biden administration's border policies. A key request from fiscal conservatives was also honored, with House GOP leaders speeding up the implementation of work requirements for Medicaid recipients. The bill also quadruples the state and local tax (SALT) deduction cap to $40,000 for people making less than $500,000 per year.

The bill now heads to the Senate, where changes are expected. Senate Republicans have signaled they expect to make changes to the bill when it reaches the upper chamber, despite House GOP leaders publicly urging them to amend as little as possible. There is a significant number of senators who have expressed wariness at the level of Medicaid and SNAP cuts sought by the House. An increase to the SALT deduction cap could also be met with skepticism in the Senate, where no Republican represents a blue state.

Speaker Johnson touted that "the House has passed generational, truly nation-shaping legislation," predicting the measure would reduce spending and permanently lower taxes. Democratic National Committee chair Ken Martin pledged that "Democrats will do everything we can to kick those who are responsible for this bill out of office," while the NRCC argued, "House Democrats just signed their own political death warrant."

The legislation comes with a massive price tag - it is estimated to add $5.2tn (£3.9tn) to US debt and increase the budget deficit by about $600bn in the next fiscal year. Concerns about borrowing as well as uncertainly around Trump’s tariffs might make nervous investors bump up interest rates even further. If that happens, people with mortgages should buckle-up because the institutions who lend to homebuyers take their cue from the financial markets when deciding interest rates.

Trump praised Republicans who voted for the bill and said "there is no time to waste" before the Senate gets to work on it. Last-minute amendments were also necessary however - with a 42 page document released listing a number of changes to the bill. Among alterations were bringing forward the implementation of Medicaid work requirements from the beginning of 2029 to the end of 2026, our US partner CBS News reports. Changes were also made to policies around tax credits for new renewable energy power plants among other areas.