The Republican-controlled House of Representatives has passed a wide-ranging tax and spending plan designed to advance many of former President Donald Trump's economic and social policy goals. The legislation, which still requires Senate approval where changes are anticipated, is projected by the Congressional Budget Office (CBO) to increase the national deficit by approximately $3.8 trillion over the next decade. The package is a blend of sweeping tax cuts, spending reductions, and policy changes that would reshape multiple sectors of the American economy and social safety net.

A significant portion of the plan is dedicated to tax relief, primarily by making permanent key elements of the 2017 Trump-era tax law that were originally set to expire in 2025. These include extending lower income tax rates ($2.2 trillion), raising the standard deduction, and enhancing benefits for business owners and families. New deductions are introduced, such as tax-free overtime, senior citizen deductions, and benefits for private school scholarships and “Trump Accounts” for children’s future expenses. In total, the tax cuts alone amount to $5.6 trillion over ten years, representing the most substantial cost within the plan.

To offset some of these costs, the plan also introduces a series of savings measures and revenue increases. These include the continuation of the 2017 elimination of the personal exemption deduction, higher taxes on wealthy university endowments, and a new tax on remittances sent abroad by immigrants. Additional savings would come from repealing green energy tax incentives and implementing stricter eligibility rules for ACA (Affordable Care Act) coverage and immigration-related health benefits. However, these offsets fall short of covering the cost of the tax breaks, leaving a significant gap in the budget.

Medicaid faces sweeping changes under the plan. Able-bodied adults without dependents would be required to work, volunteer, or attend school for at least 80 hours a month. Non-citizens would be excluded from Medicaid, and states would be penalized for providing healthcare to undocumented immigrants. The legislation also aims to reduce federal reimbursements for long-term care facilities and eliminate funding for organizations like Planned Parenthood. These changes are projected to save around $715 billion and reduce Medicaid enrollment by an estimated 7.7 million people.

In the realm of energy and environmental policy, the proposal repeals several initiatives established under the Inflation Reduction Act. Funding for green energy programs, fuel-efficiency standards, and pollution-reduction efforts would be eliminated. In their place, the plan introduces incentives for fossil fuel development, including pipelines and natural gas exports. The total expected savings from these measures is around $197 billion. Additionally, the bill includes controversial provisions such as prohibiting states from regulating artificial intelligence and auctioning more spectrum bands for telecommunications.nside the Republican Tax and Spending Plan: Major Changes, Costs, and Savings

Other key elements of the plan include $79 billion in border and homeland security enhancements, including new border walls, surveillance equipment, and increased staffing. On immigration and justice, the legislation calls for higher processing fees, the hiring of thousands of enforcement officers, and expanded deportation efforts. Military spending would also rise, with $144 billion allocated for nuclear weapons, missile defense, and shipbuilding. Education reforms target student debt, capping loans and limiting forgiveness programs, resulting in $349 billion in projected savings. Critics argue the bill disproportionately benefits the wealthy and powerful while cutting essential programs for low- and middle-income Americans, while proponents tout it as a necessary rebalancing of federal priorities.