Houses passes Trump budget making 2017 tax cuts permanent

After whipping potential holdouts overnight, House Republicans passed President Donald Trump’s $4.5 trillion tax breaks and spending cuts bill Thursday afternoon.

But as final debates began in the predawn hours, Democrat Leader Hakeem Jeffries took to the floor, where he has held up the legislation with a record-breaking speech lasting 8 hours and 44 minutes, where he criticized the bill and the GOP’s deference to Trump.

The so-called "One, Big Beautiful Act" passed the Senate Tuesday on a 51-50 vote after three Republicans defected, requiring Vice President JD Vance to break the tie. The Senate made several tax changes to the 940-page bill before it could pass.

Tax changes

Tax changes include:

• Income tax brackets from the 2017 Tax Cuts and Jobs Act (12%, 22%, etc.) are made permanent, including inflation indexing through 2029.
• Raises the standard deduction to $15,750 (single), $23,625 (head‑of‑household), and $31,500 (married filing jointly), retroactive to 2025 with inflation adjustments.
• Temporarily increases the SALT deduction cap from $10,000 to $40,000 (indexed) through 2029, then reverts to $10k in 2030. A 30% phase‑down applies above certain incomes.
• Eliminates federal income tax on certain tips and overtime pay, fulfilling a Trump campaign pledge.
• Makes the 20% pass‑through deduction (Section 199A) permanent and broadens income phase‑in thresholds for eligibility.
• Removes the overall limitation on itemized deductions (formerly the “Pease limitation”) and introduces a new cap mechanism.
• Solidifies corporate tax benefits—bonus depreciation, R&D incentives, interest deduction limits—as permanent instead of temporary.
• Sets the Child Tax Credit at $2,200 per child (up from $2,000), permanent but less generous than the House version’s $2,500.
• Enhances the business tax credit available for employer-sponsored child care (details to follow via Senate Finance).
• Creates tax-exempt savings accounts for children with a $1,000 federal seed and a $5,000 annual cap.
• Increases the federal estate and gift tax exemption to $15 million per person ($30 million for couples), indexed to inflation beginning in 2026.
• Exempts 50% of capital gains (up to $15 million) on certain small business stock held for 3+ years.

Fiscal conservatives said the cuts didn't go far enough and complained the legislation adds $3.3 trillion to the national deficit over a decade and requires a $5 trillion increase in the debt ceiling.