One Big Beautiful Bill Act (OBBB)
H.R. 1, An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14, Public Law 119‑21, also known as the One Big Beautiful Bill Act (OBBB) was signed into law by President Trump on July 4, 2025. The Act introduced broad changes to the federal tax code, restructured funding for several federal programs, and modified the operations of various federal agencies.
In the tax domain, the Act made certain provisions from the 2017 Tax Cuts and Jobs Act permanent. It preserved current income tax rates and brackets, introduced new tax deductions for tips, overtime wages, and auto loan interest, increased the cap on state and local tax (SALT) deductions from $10,000 to $40,000, and expanded child tax credits. Corporate tax provisions were also revised, including the reinstatement of amortization for domestic research and development expenditures, resulting in increased tax relief for businesses.
The Act significantly reduced Medicaid funding and imposed stricter eligibility criteria. Beneficiaries must now re-enroll every six months, and adults with children aged 15 or older must complete at least 80 hours per month of work or volunteer service to remain eligible. The Supplemental Nutrition Assistance Program (SNAP) was modified to require state co-funding beginning in 2027, transitioning from a fully federally funded model. Eligibility requirements were also changed: adults under the age of 65, including those with dependents aged 14 or older, must work a minimum of 80 hours per month to qualify.
The Act substantially increased defense and immigration enforcement spending. It allocated $150 billion to military programs, including the Golden Dome missile defense initiative. Funding for the Immigration and Customs Enforcement agency (ICE) is scheduled to rise from $10 billion to $100 billion by 2029.
Additionally, the Act imposed new caps on unsubsidized student loans. Graduate students may borrow up to $20,500 per year with a lifetime limit of $100,000. Students pursuing professional degrees face a cap of $50,000 annually and a $257,000 lifetime limit. The Graduate PLUS loan program was eliminated.
Overall, the Act is projected to lower tax revenue by $5 trillion. Even after factoring in additional revenue and spending cuts, the Act will still increase the deficit by about $3 trillion over the course of ten years.
[Last reviewed in August of 2025 by the Wex Definitions Team]
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