President Donald Trump’s sweeping tax overhaul – dubbed the “big beautiful bill” by its Republican backers – just cleared a key House committee in a nail-biting 17-16 vote.
But while the win gives Trump momentum heading into a crucial House vote this week, it also sparks fierce debate over ballooning debt, deep cuts to social programs, and growing GOP fractures.
The legislation, which aims to extend Trump’s signature 2017 tax cuts while adding new perks like tax exemptions for tips and overtime pay, could cost the U.S. between $3 trillion and $5 trillion over the next decade, according to nonpartisan analysts. That would push the national debt – already at $36.2 trillion – to an alarming 134% of GDP by 2035, triggering warnings from both economists and ratings agencies.
A Late-Night Win – With a Catch
On Sunday night, the House Budget Committee finally approved the bill after intense behind-the-scenes negotiations. Four hardline Republicans refused to support it outright but allowed it to pass by voting “present.” All Democrats on the committee voted against it.
House Speaker Mike Johnson called the final changes “minor modifications” and praised the agreement as proof of party unity – but the cracks are obvious. Disagreements over Medicaid cuts and green energy repeals nearly derailed the bill on Friday, and the same tensions now threaten to fracture the party during the upcoming full House vote.
What’s in the “Big Beautiful Bill”?
- Extends Trump’s 2017 tax cuts
- Eliminates taxes on tips and some overtime income
- Increases defense spending
- Boosts funding for Trump’s border security initiatives
- Slashes Medicaid spending – potentially dropping 8.6 million Americans from coverage
- Repeals clean energy tax credits
The bill is being framed by the Trump administration as a win for working Americans. Treasury Secretary Scott Bessent defended the legislation on CNN, claiming that the economic growth it generates will offset the increased debt load.
But credit ratings agencies are not convinced. Moody’s, which just downgraded the U.S. credit rating, directly cited the bill’s projected impact on long-term fiscal stability. This follows earlier downgrades by Fitch Ratings and S&P.
Democrats: ‘Economy on a Collision Course’
Senator Chris Murphy (D-CT) was blunt on NBC’s Meet the Press:
“That is a big deal. That means we are likely headed for a recession. These guys are running the economy recklessly.”
Meanwhile, many moderate Republicans are reportedly uneasy about Medicaid cuts, especially with an eye on the 2026 elections. With only a narrow 220-213 majority in the House, Trump’s allies can’t afford to lose more than a handful of GOP votes.
The bill’s potential to alienate older and low-income voters – many of whom powered Trump’s return to the White House – could complicate his broader 2026 agenda.
What Comes Next?
House Budget Chairman Jodey Arrington teased a dramatic showdown in the days ahead, saying the GOP will be debating the proposal “right up until the time we put this big, beautiful bill before the House.”
If passed by the full House, the bill will move to the Senate, where even tougher negotiations await. Any defections from moderate Republicans – particularly over Medicaid – could sink the bill altogether.
Big Picture: Politics Over Policy?
This bill isn’t just about taxes. It’s about defining the Trump 2.0 presidency – one that promises economic relief while launching aggressive reforms. But with the national debt ballooning and recession warnings flashing, critics argue it’s political theater wrapped in fiscal danger.
Whether this “big beautiful bill” becomes law or collapses in the Senate, it’s already reshaped the conversation around Trump’s second term – and America’s long-term financial future.
