Washington on One - 7/7/2025

President Donald Trump’s direct lobbying helped secure enough Republican votes to push his sweeping tax and spending bill over the line Thursday.  The deal-making happened behind closed doors. Hardline conservatives received vague assurances of future action — either through separate legislation or executive orders — but no changes were made to the bill text itself.  The legislation includes major tax cuts, raises the debt ceiling, phases out clean energy incentives, boosts funding for immigration enforcement, and significantly reduces Medicaid enrollment.  Trump will celebrate the win with a rally in Des Moines later today, kicking off a year-long celebration of the 250th anniversary of the Declaration of Independence. He described Iowa as “one of my favorite places in the world” on social media.

Below is a detailed but condensed overview of high-impact provisions. Happy 4^th!

1. Tax & Fiscal Provisions

• 2017 Tax Cuts: Permanently extends individual/business rates; raises standard deduction; increases child tax credit (indexed).

• SALT Deduction: Raises cap to $40K through 2029, phases down for high earners.

• Estate Tax: Exemption raised to $15M.

• Pass-Throughs: QBI deduction made permanent; new minimum deduction for small business owners.

• Foreign Income: Cuts FDII/GILTI deductions; raises BEAT rate to 10.5%.

• Trump Accounts: Creates tax-free savings accounts for children; $410M for startup costs.                                                                                                                                           Depreciation and Amortization: Companies when calculating deductible interest can do so based on the full EBITDA formula.

• Research and Development: Will not be amortized over a 5-year period, but may be deduct these expenses in year one.

• Bonus Depreciation: Allows for 100% expensing over the next 10 years

  
  

2. Clean Energy & Climate Repeals

• IRA Repeals: Terminates EV tax credits (post-9/25), wind/solar investment credits (post-2027), and hydrogen/energy efficiency credits.

• Manufacturing Credits: Phases out credits for wind components and critical minerals by 2034.

• Foreign Entity Restrictions: Disallows credits for entities tied to adversarial nations (esp. China).

• Retains: Credits for nuclear, geothermal, hydro until 2033.

  
  

3.  Health & Medicaid

• Medicaid Cuts:

  • Provider tax cap reduced to 3.5% by FY2032.

  • Rural hospital grants: $50B over 5 years.

  • FMAP incentives eliminated for non-expanding states after 1/1/2026.

• Work Requirements: Mandatory by 2027 (80 hrs/month); exemptions for disabled, caregivers, etc.

• Coverage Limits: Noncitizens, including refugees/asylees, lose eligibility for Medicaid/ACA/CHIP.

• Biden Rule Rollbacks: Pauses Medicare Savings Programs and 90-day Medicaid renewal grace period.

• Doctor Pay & Staffing Rules: 2.5% Medicare pay bump in 2026; blocks CMS nursing home rule.

  
  

4. Education

• Student Loans:

  • Ends subsidized Stafford & PLUS loans after 7/1/2026.

  • New Repayment Assistance Plan (RAP) capped at 10% AGI; $50/child offset.

  • Lifetime loan cap: $257,500.

• Workforce Pell Grants: For short-term, high-wage programs; begins 2026.

• College Accountability: Bans federal loans to programs with subpar graduate earnings.

• 529 Expansions: Adds K-12 and vocational training expenses; annual limit raised to $20K.

  
  

5. Immigration & Border Security

• Funding: $132.6B for DHS; $46.6B for border wall construction; $45B for ICE detention.

• New Fees: Up to $5,000 for noncitizen violations; asylum/work permit fees codified.

• State Grants: $10B “State Border Security Reinforcement Fund” for fencing, deportations.

• Detention Centers: Authorizes family residential centers; ICE discretion on standards.

  
  

6. SNAP & Nutrition

• Work Requirements: Raises age cap to 65 for ABAWDs; limits state waivers.

• SNAP Eligibility: Cuts off refugees/asylees; limits internet as shelter expense.

• Cost-Sharing: States required to contribute based on SNAP error rates.

• TFP Reform: Blocks USDA from increasing baseline costs beyond COLA adjustments.

  
  

7. Energy & Environment

• Oil & Gas Leasing: Quarterly sales resumed; ANWR/NPRA leasing expanded.

• Royalty Rates: Offshore lowered to 12.5–16.6%; methane royalty repealed.

• Renewables: Annual rent + 3.9% of gross for wind/solar on public land.

• Permitting: Optional expedited NEPA review ($$ required).

• DOE Rescissions: Repeals large portions of IRA energy/climate funding.

  
  

8. Agriculture

• Farm Bill Extensions:

  • ARC/PLC through 2031; reference prices raised.

  • 30M new base acres; conservation funding extended.

• Commodity Support: Boosts for sugar, dairy, cotton, trees, fish, honeybees.

• Research: $285M/year for export markets; $175M/year for specialty crops.

9. Defense & National Security

• Defense Total: ~$156B.

• Missile Defense & Readiness: $24.4B for “Golden Dome,” $16.3B for maintenance.

• Shipbuilding & Aircraft: $29B for Navy vessels; $8.6B for aircraft (F-15EX, etc.).

• Border Deployment: $1B for military border operations.