Big Beautiful Bill: Opening Act in America’s Fiscal Drama – After a 27-hour Senate session that ended on 1 July 2025, Trump’s ‘One Big Beautiful Bill Act’ (OBBBA) passed the Senate by a single vote – Vice President JD Vance broke the 50-50 tie. The bill now returns to the House. If the House changes anything in the OBBBA, the Senate must vote again.
– Tax cuts extended: The bill continues and expands the 2017 tax cuts, which were due to end in December 2025.
– No tax on tips and overtime: From 1 January 2026 to 31 December 2028, workers earning under $150,000 can exclude up to $25,000 in tips and overtime from taxable income.
– Child Tax Credit: Increased to $2,200 per child from 2026, and will rise with inflation. However, fewer families will qualify due to stricter rules.
– MAGA savings accounts: New savings accounts for children’s education or housing, launching mid-2026. Think of it like a hybrid between a baby bonus, an education fund, and a first home saver account – with less tax magic than a super or education plan.
– Medicaid: A government health program for low-income Americans. Cuts begin in 2026, with full impact by 2034. Up to 17 million people could lose coverage.
– SNAP: The Supplemental Nutrition Assistance Program (food stamps) will have stricter rules from FY2026 (Fiscal year starts 1 Oct 2025).
– Pell Grants: Financial aid for students will be harder to get.
– Climate policy: Clean energy tax credits from the 2022 Inflation Reduction Act will end on 1 October 2025.
– 1 July 2025: The S&P 500 (a major stock index) dipped 0.11%. The Dow Jones rose 0.91%.
– 2 July 2025: The 10-year Treasury bond yield rose to 4.25%. This suggests investors are worried about future debt.
– Currency shift: The Australian dollar hit a 9-month high against the US dollar.
This bill is a mixed bag. Some Americans will see more money in their paychecks. But others, especially low-income families, may lose access to healthcare and food support.
Public opinion is firmly against it: Polls show that the One Big Beautiful Bill Act (OBBBA) is deeply unpopular with the American public. A June 2025 Quinnipiac poll found that 55% oppose the bill, with 29% in support. Independent voters and lower-income households are especially critical of the proposed changes.
Even Elon Musk is fuming: The former head of the Department of Government Efficiency and once-close Trump ally has called the bill “utterly insane and destructive”. Musk argues it props up outdated industries while undermining future-focused sectors like clean technology and AI. He’s warned it could “destroy millions of jobs” and labelled it “political suicide” for Republicans.
Markets are global: US fiscal policy affects interest rates, inflation, and investor sentiment worldwide. A blowout in U.S. debt could push up global bond yields, including here in Australia.
Currency ripple effects: The Aussie dollar has already surged to a 9-month high against the USD. If the US dollar weakens, it could impact trade, tourism and commodity prices.
Climate rollback: The bill guts clean energy incentives from the Inflation Reduction Act. That’s a setback for global climate goals, especially as Australia ramps up its own transition.
Tech and trade tensions: Provisions like Section 899 target foreign companies in “unfair” tax jurisdictions. That could affect multinationals operating in Australia and strain US trade relations.
After a marathon overnight session on 3 July 2025, the House passed the Senate’s version of the bill by 218–214, sealing its fate. Trump and Fox News ramped up behind-the-scenes pressure, targeting four Republican holdouts with calls, broadcasts and backdoor briefings … a high-stakes hustle behind closed curtains that tipped the vote and delivered Trump his legislative victory.
The bill now heads to Trump’s desk for signing on 4 July, symbolically wrapping this act in stars, stripes and a storm of controversy.
The markets are watching closely: If inflation rises or debt becomes a bigger concern, we could see a sharp reaction, not just in the US, but across global economies.
References:
– Congressional Budget Office. (2025). *Estimated budgetary effects of H.R.1, the One Big Beautiful Bill Act*. Retrieved from [18]
– Know Your Congress. (2025). *An analysis of H.R.1 (119th Congress), the One Big Beautiful Bill Act*. Retrieved from [18]
– SBS News. (2025, July 2). *One Big Beautiful Bill Act passes US Senate – just*. Retrieved from [1]
– Wikipedia contributors. (2025). *One Big Beautiful Bill Act*. Wikipedia. Retrieved from [16]
– Molen & Associates. (2025, July 1). *Breaking down the One Big Beautiful Bill (OBBB): What the 2025 tax reform means for you*.
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