$4.5 Trillion Tax Cuts Bill Approved (Uncut) 02-28-2025

$4.5 Trillion Tax Cuts Bill Approved: Expect Increase in Debt, Cuts in Social Spending (Medicaid)

Welcome back everyone. Using Donald Trump’s words, the big beautiful bill that Trump pushed for narrowly passed the U.S. House. The 4.5 trillion dollar tax cut bill advanced through the U.S. House of Representatives this week.

It includes significant tax cuts for corporations and high income earners and it also includes spending reductions on social programs. But guess what? It doesn’t include the widely advertised tax cuts on tips, for example, among many other things. And why is that, you may ask? Well, it is a budget resolution on this particular stage of the process.

It covers the budget for such programs as deportation of illegal immigrants. It seeks to tighten border security. It seeks energy deregulation, another big win for corporations.

And surprise, surprise, it increases military spending. The budget resolution proposes 4.5 trillion dollars in tax cuts over the next decade alongside 2 trillion dollars in spending cuts. Who are those tax cuts for? Well, they are primarily for corporations and high income earners.

The vote was 217 in favor to 215 against with all Democrats opposing the measure. So, it was indeed a narrow, narrow vote. The bill passed thanks to the Republican majority in the House.

Whether it is a big and beautiful bill is for you to decide once it is signed into law. But let’s walk through the key provisions of the budget resolution as it stands today. I will mention the top three key provisions to hopefully provide some clarity.

Remember that there will be multiple amendments and multiple adjustments as the bill moves forward. So, first, let’s chat about tax cuts. On my website, worldaffairsandcontext.com, you will find a detailed article that I wrote about President Donald Trump’s tax cuts.

Make sure that you check that out next. The new bill aims to extend and to expand those tax cuts that were originally initiated by the Tax Cuts and Jobs Act of 2017 during Trump’s first presidency. Many of these tax cuts have already expired.

However, the bill includes making permanent the individual tax reductions such as lower tax rates and increased standard deduction, which decreases your tax liability, as you know. And those are set to expire after 2025, so the bill seeks to renew them. Additionally, the resolution proposes further reductions in corporate tax rates and other business-related tax benefits.

Again, if you want to read more on that, you’re welcome to find that article on worldaffairsandcontext.com. You will find further details. The second goal of the new resolution is to initiate spending cuts, and this is what I want to focus on. We desperately need spending cuts, but it is important to make sure that we don’t cut spending for those programs that actually benefit the American people.

The House budget seeks two trillion dollars in spending cuts over the next decade, over 10 years, to pay for President Trump’s agenda. And this is actually not good news. In fact, this is terrible news for millions of Americans, and here’s why.

These reductions target major programs like Medicaid and the Supplemental Nutrition Assistance Program, or SNAP in short. The budget will almost certainly result in substantial cuts, an estimated 800 billion dollars in cuts from Medicaid. If you’re not familiar with Medicaid, Medicaid is a federal program that provides health care coverage to more than 72 million Americans.

Allegedly, these cuts are intended to offset the revenue loss from the tax cuts that are given to corporations, that are given to high-income earners, and also they say, well, this will help us address federal deficit. However, if you really think about this, by cutting Medicaid and SNAP and other similar programs, you are effectively throwing the most vulnerable groups of our U.S. population under the bus. There’s just no positive way to look at it.

And this is, of course, in the country with the highest medical costs in the entire world. You cut spending on Medicaid, and you actually put a lot of lives on the line. I personally believe that it is a shame to even attempt to do this, given how much an average person in the United States has in medical bills, in unpaid medical bills, and how any relief in that area would be greatly appreciated.

Well, instead, the bill aims to reduce government spending on these truly vital programs. Center on Budget and Policy Priorities published an excellent article reflecting on the questioning the bill’s priorities. Take a look.

The quick math on the House budget shows a stark equation. The cost of extending tax cuts for households with incomes in the top 1 percent, $1.1 trillion through 2034, equals roughly the same amount as the proposed potential cuts for health coverage under Medicaid and food assistance under the SNAP program. Under what set of values does a budget target those who struggle to pay their bills for severe cuts, while giving an annual tax cut averaging $62,000 to those who make $743,000 or more a year? The tax cut for these wealthy households is greater than the annual family incomes for most of the 72 million people, which is actually one in five people in the United States who have health coverage through Medicaid.

And the $62,000 figure doesn’t account for the likelihood that this budget would actually shower large corporations with more tax breaks, given that it allocates $900 billion more than extending the existing tax cuts would cost. Those are excellent points. This is not about being on the left or being on the right.

It is about actually delivering on the promises that were made to the American people. Okay, let’s move on. So the third key provision of this new bill are changes to the defense and border security budget.

The new resolution includes increased funding for defense and border security. So while we are reducing spending on Medicaid, we actually increase spending on defense. This truly reflects the administration’s priorities.

Frankly, I am surprised to see that the proposed cuts to social programs have raised virtually no concerns among some lawmakers about potential impact on the groups that the most vulnerable groups of the population while also seeking to increase spending on defense. So let me know in the comments what your thoughts are on this. I would love to hear from you.

Now that I walked you through the three key points of the new bill, let’s talk about its expected impact on the US economy. Remember, the Department of Government Efficiency is cutting jobs. It is cutting federal employment.

It is going through your taxpayer data to identify inefficiencies and to save the United States some cash. Well, it is quite fair to be confused because the $4.5 trillion tax cut bill would actually add nearly $5.4 trillion in debt over the next decade. It is going to increase the federal deficit, not lower it.

While there is a possibility that it might boost long-run economic output by a relatively negligible 1.1 percent, according to some estimates, it will drive our deficit up. It will increase our deficit. This is one of the reasons why Thomas Massey, representative from Kentucky, voted against this bill.

This bill sounds great on paper. We hear tax cuts and we are immediately sold, but that is because it is meant to be that way. It’s bait.

While the real focus is on a much more important agenda that is effectively hidden in this bill. This is a way to distract while pushing for social spending cuts that undermine the well-being of the vulnerable groups in the US. Those that rely on Medicaid, those that rely on food stamps, on SNAP program, while at the same time we increase our defense budget.

The tax cuts are not meant for an average working class person. Those are minimal. $4.5 trillion in tax cuts are for corporations and the ultra-rich, the high-income earners, while an average working American will likely get his social security and Medicaid assistance cut.

Additionally, the deficit will increase in the long run, so is this truly a big and beautiful bill? Perhaps, but not for an average American. All right, so what are the next steps in this process? The budget resolution now moves to the Senate, where it is expected to undergo revisions and adjustments. Lawmakers will need to reconcile differences between the House and the Senate versions of the bill, particularly concerning the extent of tax cuts and spending reductions.

The outcome will depend on negotiations, of course, among legislators and the Trump administration. Thanks for watching. I hope this quick video helps clarify what’s going on.

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Bye for now.