House Republicans Edge Closer to Passing “One Big Beautiful Bill” Amid Intraparty Negotiations

As of May 20, 2025, House Republicans are making significant strides toward passing the comprehensive tax and spending package known as the “One Big Beautiful Bill.” This legislation, a cornerstone of President Donald Trump's economic agenda, aims to extend key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) and introduce new tax reforms.

Key Provisions of the Bill

The proposed legislation encompasses several major tax and policy changes:

• Permanent Extension of TCJA Tax Cuts: Solidifying the individual and corporate tax rate reductions established in 2017.

• Tax Relief for Workers: Elimination of federal income taxes on tips and overtime pay, providing immediate benefits to service industry employees.

• Child Tax Credit Enhancement: Increasing the credit to $2,500 per child through 2028, with a subsequent adjustment to $2,000 thereafter.

• Introduction of MAGA Accounts: Establishment of “Money Accounts for Growth and Investment” (MAGA) savings accounts, offering $1,000 per child to encourage long-term savings.

• State and Local Tax (SALT) Deduction Cap Adjustment: Raising the cap from $10,000 to $30,000 for joint filers earning under $400,000, addressing concerns from high-tax states.

• Medicaid Work Requirements: Implementing work requirements for able-bodied adults without dependents, aiming to reduce program expenditures.

• Border Security and Defense Funding: Allocating additional resources for border enforcement and military spending.

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Intraparty Negotiations and Challenges

Despite the bill's advancement, internal divisions within the Republican Party have posed challenges:

• SALT Deduction Debate: Lawmakers from high-tax states, such as New York and New Jersey, have pushed for a higher SALT deduction cap. President Trump has urged these members to support the current provisions, emphasizing party unity. 

• Fiscal Concerns: Some conservative members express apprehension over the bill's potential to increase the national deficit, estimated to add $2.5 to $3.3 trillion over the next decade. 

• Medicaid and SNAP Cuts: Proposed reductions in Medicaid and Supplemental Nutrition Assistance Program (SNAP) benefits have raised concerns among moderates about the social impact of such cuts. 

Economic Projections

According to the Council of Economic Advisers, the bill is projected to:

• Boost Economic Growth: Increase real GDP growth by up to 5.2% over the next four years.

• Create Jobs: Generate up to 7.4 million full-time jobs.

• Increase Wages: Raise average worker wages by up to $11,600.

• Enhance Take-Home Pay: Provide a typical family with up to $13,300 more in take-home pay. 

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Next Steps

House Speaker Mike Johnson is working to finalize negotiations and bring the bill to a floor vote. The outcome will depend on reconciling differences within the Republican caucus and securing sufficient support. If passed, the bill will proceed to the Senate, where further deliberations are expected.

Bizora AI will continue to monitor developments on this significant legislative initiative, providing updates relevant to tax professionals, business owners, and policymakers.