US House of Representatives passes sweeping tax-cut bill amid warning from budget group

Washington: The Republican-controlled US House of Representatives has narrowly passed a sweeping tax and spending bill, despite prior warnings from budget groups that the legislation would significantly increase federal debt.

The bill was approved by a vote of 215 to 214, Xinhua news agency reported.

All Democratic lawmakers and two Republican lawmakers voted against it, while one Republican lawmaker voted “present,” neither for nor against the bill.

The bill extends the corporate and individual tax cuts enacted during US President Donald Trump’s first term in 2017, while adding new tax breaks for tips, overtime and car loans.

It also increases defence spending and allocates additional funds for deporting immigrants.

Additionally, the bill repeals many green energy policies championed by former US President Joe Biden and raises the eligibility thresholds for low-income individuals to access healthcare and food assistance programs, in an attempt to reduce federal expenditures.

The bill is sent to the Republican-controlled Senate, where it will likely face modifications.

“THE ONE, BIG, BEAUTIFUL BILL has PASSED the House of Representatives! This is arguably the most significant piece of Legislation that will ever be signed in the History of our Country!” Trump wrote on his social platform Truth Social.

Meanwhile, budget groups have expressed deep concern.

“The House’s reconciliation framework has been an insult to fiscal responsibility, adding more than $3 trillion to the debt and setting up a massive cliff of tax cuts and spending expirations that could cost trillions more to extend,” Maya MacGuineas, President of the Committee for a Responsible Federal Budget, said in a statement on Wednesday.

According to the latest data from the Treasury Department, the US national debt has surpassed $36.2 trillion.

With the House majority standing at 220-212, Speaker Mike Johnson had little room for dissent and made last-minute concessions to satisfy various Republican factions.

Johnson described the bill as “generational, truly nation-shaping legislation,” emphasising its significance in shaping America’s future.

The 1,100-page bill enshrines much of Donald Trump’s populist campaign promises, including new tax breaks on tips and car loans, increased military spending, and enhanced border enforcement.

It extends the corporate and individual tax cuts enacted in 2017 and repeals many green-energy incentives introduced under former US President Joe Biden.

However, the Congressional Budget Office (CBO) projects that the tax-cut bill will add approximately $3.8 trillion to the federal debt over the next decade, on top of the existing $36.2 trillion.

IANS