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2d ago

Trump’s Tax and Budget Law Takes Effect as Midterm Battle Lines Form

The law’s most unpopular provisions are on hold until 2027 to mute backlash before voters head to the polls next year.

FILE – U.S. Rep. David Valadao, R-Calif., poses for a photo in Washington on Jan. 6, 2015. (AP Photo/Jacquelyn Martin, File)
An oil pumpjack is seen near a field of wind turbines on October 4, 2023 in Nolan, Texas.
President Donald Trump signs his tax and budget bill from the South Lawn of the White House on July 4, in Washington, DC.
Republican North Carolina Sen. Thom Tillis speaks to reporters at the US Capitol Building on June 30, 2025 in Washington, DC.

Overview

  • Permanent extensions of Trump’s 2017 tax cuts, new deductions for tips and overtime, and increased funding for defense and immigration enforcement have taken effect under the One Big Beautiful Bill Act.
  • Deep cuts to Medicaid funding and new work requirements along with SNAP reductions have been postponed until 2027 to limit voter backlash ahead of the 2026 midterm elections.
  • The Congressional Budget Office estimates the legislation will add $3.4 trillion to the federal deficit over the next decade and strip health coverage from roughly 11.8 million people.
  • House Speaker Mike Johnson plans to push additional reconciliation bills this fall and spring to reinforce Trump’s agenda and reverse Biden-era spending decisions.
  • Senate and House Democrats are gearing up targeted campaigns in swing districts to spotlight the law’s delayed safety-net cuts as a centerpiece of their 2026 midterm strategy.