By Arkansas Black Vitality Staff

May 25, 2025 – The reconciliation package, officially titled the “One Big Beautiful Bill Act,” will now proceed to the U.S. Senate. On April 10, following action in the Senate, the House adopted a final concurrent budget resolution that sets the stage for work on a future reconciliation bill.

The Senate’s April 5 amendment introduces reconciliation instructions for the Senate that mandate only $4 billion in gross deficit reductions and permit a $5.8 trillion net deficit increase. In contrast, the House instructions require $2 trillion in gross deficit reductions and allow for a $2.8 trillion net deficit increase.

Budget reconciliation allows Congress to bypass the 60-vote threshold typically required to advance a bill in the Senate, enabling the party in power to approve significant legislation without collaborating with the opposition. Currently, the Senate is split 53-47, with Republicans holding the advantage and a tie-breaking vote from Vice President J.D. Vance.

Although Senate passage of BBL seems likely based on current congressional polling, the right-leaning Committee for a Responsible Federal Budget warns that it would add $2.5 trillion to primary deficits over the coming decade and $3.1 trillion to the debt, including interest. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said House lawmakers approved the massive legislation even after Moody’s on May 16  downgraded the U.S. government’s long-term issuer and senior unsecured ratings to Aa1 from Aaa and changed the outlook to stable from negative.

In a statement, Moody’s said the one-notch downgrade reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated governments

“Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs. We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration,” said Moody’s.

Over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat. In turn, persistent, large fiscal deficits will drive the government’s debt and interest burden higher. The US’ fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns.”

MacGuineas further stated that if the temporary provisions of the 2017 law are extended without offsets, Trump’s “big beautiful bill” would add $5.1 trillion to the debt, including interest.

“This plan is nothing short of a fiscal failure. It adds massively to the national debt, it relies on timing gimmicks and false claims about growth, it fails to make the structural spending reforms we desperately need, and it uses the important savings it does find to partially offset tax cuts rather than reduce the debt,” said MacGuineas.

“The fact that lawmakers passed this bill less than a week after America’s latest credit downgrade and yet another worrying Treasury auction is especially maddening. Will nothing wake our leaders up to the need to take our debt challenges seriously?” MacGuineas concluded.  

Other key provisions of the bill include the following

Key provisions of the bill include:

• Tax Cuts and Extensions:
  • Makes permanent many of the 2017 Trump tax cuts for individuals and corporations, which were set to expire.
  • Temporarily eliminates taxes on tips, overtime pay, and interest on some U.S.-assembled auto loans (through 2028-2029).
  • Increases the standard deduction and child tax credit temporarily.
  • Raises the estate tax exemption to $15 million, adjusted for inflation.
  • Significantly increases the State and Local Tax (SALT) deduction cap from $10,000 to $40,000 for households earning up to $500,000.
  • Enhances the Section 199A Qualified Business Income (QBI) deduction for pass-through entities from 20% to 23%.
  • Restores 100% bonus depreciation for qualifying assets and allows immediate deduction for domestic research and development (R&D) costs.
  • Extends Opportunity Zones.
  • Eliminates or phases out several clean energy tax credits from the Biden administration’s policies.

• Spending Cuts and Program Reforms:
  • Drastically reduces spending on social services and healthcare.
  • Imposes new work requirements for Medicaid recipients who are able-bodied adults without dependents, accelerating the implementation of these requirements.
  • Requires more frequent eligibility checks for Medicaid.
  • Reforms the Supplemental Nutrition Assistance Program (SNAP), increasing state contributions and adding work requirements for able-bodied enrollees without dependents.
  • Increases taxes on university endowments and large non-profits.
  • Eliminates some tax breaks for wealthy individuals and large corporations.

• Border Security:
  • Allocates significant funding for border security, including $46.5 billion for the border wall, $4.1 billion to hire Border Patrol agents, and retention bonuses.
  • Imposes a new $1,000 fee for individuals filing for asylum in the U.S.
  • Aims to create the capacity to deport up to 1 million people each year.
  • Requires a Social Security number for individuals claiming tax credits and deductions to prevent taxpayer benefits from going to undocumented immigrants.

• Other Provisions:
  • Includes strong regulatory reform provisions, requiring federal agencies to consider direct and indirect costs of new regulations and requiring congressional approval for major rules.
  • Provides for a new Workforce Pell grant program to support workforce development in in-demand industries.
  • Aims to boost domestic timber production.
  • Makes investments in modernizing the Federal Aviation Administration’s air traffic facilities and systems.