Permanent tax cuts, safety-net changes, and a big spending shift

HR1 is an omnibus reconciliation law that touches most major Federal programs. On taxes, it makes the lower individual income tax rates and larger standard deduction permanent, tightens the cap on state and local tax deductions but raises the dollar limit, expands the Child Tax Credit and Earned Income Tax Credit rules, and creates temporary deductions for tips and overtime pay and interest on certain car loans. It extends and enlarges many business tax breaks, including 100 percent expensing of equipment and U. S.

research, higher limits on small‑business expensing, and more generous international tax rules for U. S. companies. The Act makes large changes to safety‑net and health programs. It adjusts SNAP (food stamps) benefit calculations, tightens work rules, and adds new cost‑sharing for states. It narrows Medicaid and Medicare eligibility for some non‑citizens, adds new work and reporting requirements for some Medicaid adults, and limits retroactive Medicaid coverage. It creates new Medicaid audits and reduces or delays some nursing‑home and eligibility rules.

It also changes student financial aid, capping and ending some graduate and parent loans, revising income‑based repayment, and adding new Pell Grants for short workforce programs. The law cancels or rescinds many Inflation Reduction Act climate, clean energy, and environmental justice funds, and ends or shortens several clean‑energy tax credits, while promoting oil, gas, mining, and nuclear energy leasing and infrastructure.

It appropriates very large new sums for the Defense Department, nuclear forces, Coast Guard, NASA space programs, rural America, and border security, including walls, detention beds, immigration courts, and ICE and CBP staffing. It adds numerous new immigration‑related filing and user fees, creates new excise and user fees (for space launches, spectrum, airline systems, remittance transfers), and raises the statutory federal debt limit by $5 trillion.