In a defining moment for President Donald Trump’s second term, the House of Representatives has narrowly passed a sweeping tax overhaul that will permanently extend the 2017 tax cuts, reshape federal spending priorities, and significantly increase the national debt.

The bill cleared its final hurdle on Thursday with a 218-214 vote in the Republican-controlled House, following days of intense negotiations and all-night debates. With the Senate having approved the measure by the narrowest margin—Vice President JD Vance casting the decisive tie-breaking vote—the legislation now awaits Trump’s signature. The White House confirmed the president will sign the package, which he has described as a “big beautiful bill,” on Friday evening in Washington.

Historic Tax Cuts and Expanding Debt

The legislation delivers on multiple campaign promises Trump made ahead of the 2024 election. It makes the tax cuts enacted in 2017 permanent for individuals and businesses, while introducing fresh tax breaks for families, seniors, tipped workers, and overtime pay. Republican lawmakers hailed the bill as transformative.

“This is historic tax relief for working families and unprecedented investment in securing our borders,” said Representative Virginia Foxx of North Carolina.

According to the nonpartisan Congressional Budget Office (CBO), however, the bill will reduce federal revenues by $4.5 trillion over the next decade, while offsetting only $1.1 trillion through spending cuts. The result is a projected $3.4 trillion addition to the national debt, which recently surpassed $36 trillion.

Deep Cuts to Health and Safety-Net Programs

To partially pay for the tax cuts, the measure slashes funding for health and social programs. Medicaid—the government health insurance program for low-income Americans—will see tighter eligibility rules, work requirements, and funding restrictions that the CBO estimates will push nearly 12 million people off the rolls.

Republicans inserted $50 billion in assistance for rural hospitals in a late attempt to blunt criticism that the cuts would devastate healthcare access outside major cities. Even so, independent analysts warn that the largest benefits will accrue to the wealthiest households, while many lower-income Americans will see their incomes effectively decline as social support is reduced.

Democrats unanimously opposed the bill. House Democratic Leader Hakeem Jeffries condemned it as a “giveaway to billionaires” that would harm working families. Jeffries delivered a marathon 8-hour, 46-minute speech—the longest in House history—arguing that the cuts would leave millions uninsured and widen inequality.

A Fierce Political Battle

The tax overhaul became a central focus of Trump’s legislative agenda after his re-election. In the final stretch, he used social media to pressure reluctant lawmakers. “FOR REPUBLICANS, THIS SHOULD BE AN EASY YES VOTE. RIDICULOUS!!!” he posted in a typical all-caps broadside.

Despite misgivings among some Republicans about the size of the deficit increase, only two GOP House members ultimately voted against the bill. Democrats and some outside observers have warned that the measure could damage U.S. creditworthiness and worsen generational inequities by saddling future taxpayers with more debt.

Moody’s downgraded U.S. debt in May, citing unsustainable borrowing trends—a concern amplified by this latest legislation.

Broader Economic Impact

Supporters argue the tax cuts will fuel economic growth and keep taxes low for most households. The bill extends provisions that were set to expire this year, avoiding automatic tax hikes on individuals and businesses. New tax incentives are designed to ease costs for parents and older Americans while supporting key industries like auto lending.

Critics counter that any short-term gains will be offset by reduced services, higher interest payments on debt, and increased inequality.

Trump and Republican leaders framed the vote as a victory for taxpayers and border security, while Democrats warned of lasting consequences. With the bill now on the verge of becoming law, the country faces a defining test of whether deep tax cuts and spending reductions can deliver the promised economic benefits—or whether they will instead deepen America’s fiscal and social divides.