Breaking Down the One Big, Beautiful Bill: Here’s What Just Passed

After long weeks of deliberation, President Trump’s “One, Big, Beautiful Bill” (OBBB) finally passed the US House on July 3, 2025, in a 217-214 vote. Just days prior, the Senate passed it with the final deciding vote cast by Vice President Vance. This tight victory for Trump marks the penultimate step toward his self-imposed July 4 deadline for the legislation; he officially signed the legislation into law in a holiday morning ceremony. Despite its polarizing nature and many procedural holdups, the OBBB has prevailed. 

The OBBB’s SALT Cap Hike, Medicaid cuts, and deficit implications were main points of contention for politicians and laypeople alike. Three outlier Republicans voted against the bill in the Senate, while others, like Senator Lisa Murkowski (R-AK), who, despite saying she “disliked the direction of the bill,” chose to “roll up her sleeves” and make the bill work. 

The Senate-passed version of the OBBB that ultimately became law differs much from the version that the House narrowly passed in May, but the House ultimately accepted those changes in order to get the bill to President Trump’s desk. Many worried that the newest version would not pass because it increases deficits by about $110 billion, according to the CBO, as compared to the House’s older version. The many different versions of the OBBB have left many confused about what actually ended up in the final budget reconciliation law and what its implications will be. 

Here at Palmetto Promise, we thought we would break down the bill’s major points for our readers, with a special focus on what the resolution means for South Carolinians.  

Income tax cuts 

Makes Trump’s 2017 Tax Cuts and Jobs Act permanent. Reforms in the Act, which would otherwise have expired, provide tax reductions for individuals and businesses, though it tends to especially benefit higher earners. The standard deduction would increase to $15,750 for single filers and $31,500 for married individuals filing jointly.

No tax on overtime, tips, or car loan interest.

Eliminates tax on overtime and tips for eligible deductions. Individuals in jobs that traditionally and customarily receive tips, who are not “highly compensated employees” making less than $160,000 with work-eligible social security numbers, are eligible to claim the tip deduction. Overtime deductions also apply only to those with valid Social Security numbers and incomes under $160,000. Tipped income cannot be deducted as overtime to avoid a double tax benefit. The car loan interest tax deduction applies to up to $10,000 per year in auto loan interest for cars assembled in the United States and purchased between 2025 and 2028. Individuals making over $100,000 or couples making over $200,000 would be exempt from this deduction. 

Child tax credit 

Increases the child tax credit to $2,200 from the existing $2,000. This credit requires one parent and the child’s Social Security Number and will be adjusted annually for inflation after 2025. 

Raised cap on SALT tax 

Increases the State And Local Tax (SALT) cap to $40,000. The controversial change, which has been covered by Palmetto Promise, allows greater tax deductions for eligible individuals who reside disproportionately in high tax in blue states.   

Cut the Death Tax 

Raises the exemption amount for Federal Estate or Death tax to $15 million for single filers or $30 million for married individuals filing jointly. South Carolina has no State Estate tax. 

Defense Spending 

Increases defense spending by more than $200 billion. Of that spending, $79 billion is going toward Homeland Security and $144 billion is going toward the Armed Services.  

Additional Medicaid requirements 

Introduces new work requirements for adults without children or disabilities. The requirement is at least 80 work hours per month from December 2026. This requirement, along with others, generally limits Medicare coverage for certain individuals. This bill “makes clear that Medicaid should protect the vulnerable” said South Carolinian Congresswoman Sheri Biggs, a nurse practitioner. 

SNAP benefit requirements 

The Supplemental Nutrition Assistance Program (SNAP), which offers food assistance to low-income families, is now limited to individuals who fall within a more robust set of parameters, including work requirements for the able-bodied, age limitations of 18-65, and limiting aliens from receiving the benefits. 

Clean energy credit cuts 

Eliminates tax incentives created under the Biden administration to push electric vehicle use and other clean energy technologies. This cuts funding for clean vehicle credit, diesel emissions reductions, air pollution reductions, the low-emission electricity program, and more.  

Raises the debt ceiling 

Increases the national debt ceiling by $5 trillion. This trillion-dollar increase from the Senate’s proposed version of the bill is similar to increasing the credit limit of a personal credit card. It allows the U.S. Government to borrow more to fund existing financial obligations and prevent a potential default. 

Closes “De minimis” loophole 

Modifies the Smoot-Hawley Tariff Act (1930) to exempt low-value packages (under $800) from tariffs and customs. Commercial packages will no longer be able to dodge fees, and e-commerce companies will be forced to stop exploiting the loophole by shipping commercial products individually. 

Trump Accounts 

Establishes the Trump Account program and accompanying contribution plan. These accounts allow contributions of up to $1,000 upon the birth of a child and $5,000 per year after that. The money in the accounts, which grows tax-deferred, like a 529 plan, can be used for higher education, job training, and a down payment on a home. 

What’s the Impact?

Beyond the sizable deficit impact, the OBBB quietly redraws lines between federal and state authority. Some provisions—like national Medicaid and SNAP work requirements and expanded defense spending—centralize power, limiting states’ flexibility over social policy and budgeting. 

While at the same time, expanded SALT deductions, permanent income tax cuts, and the rollback of clean energy incentives decentralize power, giving states and taxpayers more autonomy to shape policy and spending. 

The OBBB is a mixed shift: stronger federal control over welfare, but looser reins on taxation and environmental strategy.

The OBBB, in a dramatic turn, was held up in the House by Minority Leader Hakeem Jeffries (D-NY). Jeffries tried to stall the bill by giving a “magic minute speech.” This House tradition allowed Jeffries to expand his 60 second allotment into a full 8 hours. Jeffries started speaking at 4:53 AM and continued into the afternoon. This stunt broke the record for the longest House speech set by Representative Kevin McCarthy (D-CA) in 2021, which was 8 hours and 32 minutes. 

The speech could not go on forever, though. Trump and House Speaker Mike Johnson (R-LA) gathered enough votes to pass the bill and awaited the conclusion of the 8-hour marathon speech.  

“We are delivering in our promise to make America great again” with “the most important vote that any of us will take in our lifetimes,” Johnson said in a final speech. And much to President Trump and Speaker Johnson’s delight, the bill passed with a thunderous round of applause from the House.

During the OBBB’s signing ceremony on July 4, Trump exclaimed that the bill was “a triumph of democracy on the birthday of democracy.” 

We will certainly keep our readers informed on how the policies of the OBBB pan out here in the Palmetto State.