On July 4th in Taiwan time, the U.S. House of Representatives ultimately passed the One Big Beautiful Bill Act (OBBBA) with a slim majority of 218 votes in favor and 214 votes against. The bill will subsequently be sent to the President for signature (to be signed on Saturday Eastern Time).
Previously, the bill had passed its initial version in the House with 215 votes to 214, and a revised version was passed in the Senate on July 1st with 51 votes to 50, with Vice President Vance casting the decisive vote to ensure the bill's advancement.
Trump's Core Economic Agenda
The One Big Beautiful Bill Act is the core economic agenda for Trump's second term, continuing the main policies of the 2017 Tax Cuts and Jobs Act. The bill includes extending corporate and individual tax cuts, raising the state and local tax (SALT) deduction cap to $40,000, and exempting taxes on tips and overtime wages.
Additionally, the bill significantly increases defense spending by $150 billion and border security funding by $170 billion, while cutting expenditures for Medicaid and the Nutrition Assistance Program (SNAP), and tightening related application qualifications.
IMF Warns: U.S. Debt Crisis Intensifies
However, these measures have sparked widespread controversy, particularly the provisions reducing social benefits, which have been criticized for harming low-income groups. In response, the International Monetary Fund (IMF) issued a warning about the bill on July 4th, indicating that it could exacerbate U.S. fiscal challenges. IMF spokesperson Julie Kozack stated that the bill would make it more difficult to achieve fiscal deficit and debt burden reduction goals in the next three to five years, intensifying the IMF's long-standing concerns about U.S. fiscal sustainability.
The IMF emphasized that the U.S. needs to gradually reduce public borrowing to ensure fiscal stability, but the bill's tax cut policies and increased spending on defense and border security might offset the fiscal savings from cuts to medical and nutrition assistance programs.
Moreover, according to estimates from the Congressional Budget Office (CBO), the bill will increase the federal deficit by $3.3 trillion over the next decade, further raising the proportion of U.S. debt to GDP.
