Donald Trump is about to secure the brink of flagship tax and spending legislation on the lower house of Congress.
The massive bill that would cut U.S. taxes and increase spending is at the heart of the president's second term agenda and has been the center of fierce battles between House Republicans.
Parliamentarians have disagreements over spending on health and social care programs and fears of the country’s fierce debt. The president repeatedly intervened to force them to pass the bill, warning last week: "We don't need Republican viewers."
What's in the bill?
The thousands of pages of legislation, known as Trump's "a big beauty bill" - extends many of the 2017 tax cuts he passed during his first term, which will expire at the end of the year. These include personal income tax relief and increased child tax credits and eliminate taxes on tips and overtime pay, central campaign commitments during last year's election.
Other measures include increased real estate and giveaway duty exemptions and extensive business tax benefits, as well as more than $50 billion to improve border security, including further construction of walls along Mexico that Trump vowed to complete.
Republicans have lowered the bill's price tag by cutting nearly $80 billion from Medicaid, the health care plan for the poor in the United States, while food stamp programs and clean energy tax credits have also increased by hundreds of millions of dollars. This will also increase investment income taxes for universities and private foundations, raising more than $22 billion, according to the Joint Tax Commission.
What happens after Congress passes?
Once the House passes legislation, it develops into a Republican-controlled Senate. There are 100 members in the House of Representatives, and at least 50 of the 53 Republican senators must support Trump's bill to sign it into the law.
If the Senate makes any changes to legislation, it must go back to the House for another vote. Since Democrats are expected to oppose the bill, its fate in the House of Lords will depend on whether Republican Majority Leader John Thune can compromise between moderate lawmakers such as Susan Collins in Maine and hardcores in anti-government spending, such as Mike of Mike of Utah and Rand Paul of Kentucky.
But, as in the House of Representatives, Trump will put pressure on his party to support legislation.
How will it affect the public finances in the United States?
Analysis by independent agencies, such as nonpartisan committees responsible for budgets and Wharton University School of Pennsylvania, said the bill would increase U.S. debt by $330 million over the next 10 years.
This means that by the end of maturity, the debt-to-GDP level of the world's largest economy will rise from 98% to 125%, which is a level that has been reached after World War II far above previous highs.
Trump's team said the legislation, along with pro-growth policies such as tax cuts and deregulation, will help cut the U.S. yawning fiscal deficit in half, which was 6.4% as of 2024 and only 3% by the end of his term.
The President's Economic Advisory Board claims that the bill will increase real economic growth by up to 5.2% over the next four years, create or save up to 7.4 million jobs and increase investment by up to 14.5%.
But others warn that the impact of tax cuts and other measures will undermine the U.S. economy. They "may be effective for growth, but not enough to offset the impact on the debt-to-GDP ratio on the settlement bill," said Maury Obstfeld, former chief economist at the IMF.
He added that the bill "could put the U.S. Department of Treasury into triple B status" days after the U.S. lost its triple A credit rating.
What does this mean for Trump?
The passage of the legislation is crucial to the president's second term agenda, which he sees as a huge political victory. He will also hope that this will increase his approval rate, which is 47.3%, according to the voting average of RealClearpolitics.
If lawmakers fail to approve the bill, tax rates will be raised across the board next year, causing a fiscal blow to families and businesses within the midterm election year.
However, the legislation may backfire and be suitable for Trump. The Democratic attack on his initial 2017 tax cuts helped him control the home in mid-2018.