Less than six months after taking office, Donald Trump has fulfilled one of his key campaign promises. Congress yesterday passed his tax cut plan. President Trump will now be able to sign the famous "One Big Beautiful Bill" today, a national holiday, in line with the timetable he himself set.

The bill extends the 2017 tax cuts and provides additional funding for border security and the Pentagon. Other tax breaks are also planned. In particular, companies will be able to deduct all equipment purchases and R&D expenses. For households, overtime and tips will no longer be taxed.

 

Get the diary out

This is a major victory for Donald Trump, who has also shown that he has a firm grip on his majority. Many elected officials expressed their opposition to the bill during the congressional debates. Some are opposed to increasing the deficit and argued for further spending cuts. Others, however, are concerned about spending cuts for Medicaid and the end of tax credits for renewable energy, which have mainly benefited Republican states.

But despite these fundamental reservations, only three Republican lawmakers voted against the bill in the Senate and two in the House of Representatives.

Donald Trump did not hesitate to threaten those who opposed him with supporting other candidates in the next elections. Tom Tillis, Republican senator from North Carolina, announced that he would not run for re-election in 2026 after declaring that he would not support the bill.

In just six months, the US president has made considerable progress on his agenda. In the United States, with tax reform, tougher immigration policy, and certain Supreme Court decisions (notably restricting the ability of federal judges to block his administration's decisions).

Internationally, with the NATO agreement in which the Allies commit to increasing their defense spending—a long-standing demand of the United States—and trade negotiations. Although few agreements have been signed, Donald Trump now appears to be in a position of strength, and many countries are ready to make concessions that seemed unacceptable just a few months ago.

Spending cuts

While the passage of this bill is being hailed as a victory today, it could also cost Republicans politically, less than a year and a half before the midterm elections.

Alongside tax cuts, the tax bill also provides for spending cuts, particularly in Medicaid, the health insurance program for low-income Americans.

While Donald Trump has insisted that these cuts are only intended to combat "fraud, waste, and abuse," 12 million Americans are expected to lose their health coverage, according to CBO estimates.

Eligibility checks will be tightened, a work requirement will come into effect in 2027, access will be restricted for certain immigrants, and some beneficiaries will see an increase in their out-of-pocket costs.

These measures will affect the middle and working classes, Donald Trump's electoral base. Overall, various estimates show that the tax law will mainly benefit the highest income earners.

This will give Democrats ample opportunity to denounce tax breaks for the richest, financed at the expense of the poorest. This strategy was already used in 2018 during the midterm elections. At the time, Democrats denounced the tax cut plan passed in 2017. Although this was not their only argument, Republicans ultimately lost control of the House of Representatives.

For this reason, voices were raised in favor of introducing measures to "pull the rug out from under" the Democrats. This was particularly the case for Steve Bannon, former advisor to Donald Trump and still an influential figure in the MAGA sphere. The increase in the marginal tax rate was discussed at one point during the first reading in the House, before being rejected. Donald Trump himself did not oppose the measure.

The question of timing

According to a recent Pew Research Center poll, 49% of Americans oppose the tax bill, while only 29% support it. Pew says concerns are focused on worsening the budget deficit and harming low-income households.

While Republicans currently control both chambers, their majority is slim (220 seats to 212 in the House and 53 seats to 47 in the Senate).

GOP (Grand Old Party) lawmakers hope that tax cuts will be more visible to Americans than spending cuts. "Politics is about simplifying things. Cuts to Medicaid are quite complex, while extending the current tax system is easy for the public to understand," says Paul Sracic, a senior fellow at the conservative Hudson Institute.

Above all, the cuts to Medicaid will not take effect immediately. "Nothing related to Medicaid will impact anyone for two years," said Nebraska Republican Representative Mike Flood.

In fact, the requirement to work at least 80 hours per month to qualify for Medicaid will not take effect until January 1, 2027. The midterm elections, meanwhile, will be held in November 2026.