HR-1-119

An act to provide for reconciliation pursuant to title II of H. Con. Res. 14.

SignedHouse119th CongressEconomy

Introduced: May 20, 2025
Latest action: Jul 4, 2025

Became Public Law No: 119-21.

What it does

This law makes sweeping changes across the federal government through the budget reconciliation process. It permanently extends and expands 2017 individual and business tax reductions, restructures federal student loan and Medicaid programs, increases defense and border security spending, rescinds billions in clean energy and environmental funding, expands domestic fossil fuel leasing, imposes new work and cost-sharing requirements on Medicaid recipients, tightens SNAP eligibility and adds state cost-sharing, eliminates or phases out numerous clean energy tax credits, and raises the federal debt limit by $4 trillion. It also imposes a 10-year moratorium on state regulation of artificial intelligence and makes significant changes to federal employee retirement benefits.

Who benefits

High-income households receiving larger tax reductions from permanent TCJA rates, higher estate tax exemptions, and increased SALT deduction caps. Business owners benefiting from extended bonus depreciation, expanded Section 179 expensing, and higher qualified business income deductions. Workers in tipped or overtime jobs receiving new above-the-line deductions through 2028. Fossil fuel industries gaining expanded federal leasing, reduced royalty rates, and streamlined permitting. Defense contractors and military personnel receiving increased DOD funding. Border security agencies receiving substantial new funding. Dairy, grain, and specialty crop farmers benefiting from extended commodity support programs. For-profit colleges freed from the 90/10 rule. AI companies freed from state-level regulation for 10 years. Families using 529 plans for expanded education expenses. Small businesses receiving new health coverage tax credits. Newborns (2025–2029) receiving $1,000 federal MAGA account deposits. Orphan drug manufacturers gaining expanded Medicare negotiation exemptions.

Who is hurt

Low-income SNAP recipients facing tighter work requirements, reduced state exemptions, and new state cost-sharing that may reduce benefit availability. Medicaid expansion enrollees subject to new work requirements, cost-sharing, and more frequent eligibility redeterminations. Unauthorized immigrants and certain lawfully present immigrants losing access to Medicaid, CHIP, and premium tax credits. Planned Parenthood and similar providers losing Medicaid reimbursement for 10 years. Transgender minors and their families losing Medicaid and ACA coverage for gender-affirming care. Graduate students and parents losing certain federal loan options. Borrowers losing income-driven repayment flexibility and deferment options. Clean energy industries — solar, wind, EV, hydrogen — losing tax credits they relied on for project financing. EV and hybrid vehicle owners paying new annual registration fees. Consumers of goods transported by ship facing higher port tonnage duties. Federal employees facing higher retirement contribution rates, reduced annuity benefits, and new at-will employment conditions. Environmental and low-income communities losing EPA grant programs and air quality monitoring funding. States facing higher SNAP and Medicaid administrative cost burdens. Coastal and rural communities losing NOAA climate resilience funding.

Supporters argue

Supporters argue that making the 2017 tax reductions permanent prevents a large tax increase on working and middle-class families — the Congressional Budget Office estimated that expiration would raise taxes on roughly 62% of filers — while the new deductions for tips, overtime, and auto loans provide targeted relief to working-class households. They contend that Medicaid and SNAP work requirements restore program integrity and fiscal sustainability, noting that the Medicaid expansion population was designed for able-bodied working-age adults, and that similar state-level work requirements have shown increased employment among participants. They further argue that rescinding unspent clean energy subsidies and expanding domestic energy production will lower energy costs, reduce dependence on foreign supply chains, and generate federal revenue through new lease sales and royalties.

Opponents argue

Opponents argue that independent analyses, including CBO projections, estimate the bill would add $3–4 trillion to the federal deficit over 10 years, with the largest tax benefits flowing to the highest-income households while Medicaid and SNAP cuts fall disproportionately on low-income families, children, and people with disabilities. They contend that Medicaid work requirements have historically reduced coverage without meaningfully increasing employment — Arkansas's 2018 pilot resulted in 18,000 people losing coverage before courts blocked it — and that the combination of eligibility restrictions, cost-sharing, and more frequent redeterminations could cause millions to lose health insurance. They further argue that abruptly terminating clean energy tax credits disrupts billions in private investment already committed based on existing law, potentially destroying jobs in manufacturing and energy sectors that had expanded in reliance on those incentives.

Constitutional context

Multiple provisions implicate active constitutional doctrines. The 10-year preemption of all state AI regulation raises Commerce Clause and anti-commandeering questions under the Tenth Amendment — Congress may preempt state law under the Supremacy Clause, but the breadth of the preemption and its application to purely intrastate AI activity may face Lopez-style limits. Agency authority provisions — including the congressional approval requirement for major revenue-raising rules and limits on ED rulemaking — intersect with the major questions doctrine (West Virginia v. EPA, 2022) and post-Chevron independent judicial review (Loper Bright v. Raimondo, 2024). The restriction on court enforcement of injunctions where no security was posted (Sec. 70302) raises separation of powers concerns regarding Congress's ability to limit judicial contempt authority.

Checks and balances

Congress gains significant power through this law: it claws back agency rulemaking authority (requiring congressional approval for major revenue rules), limits ED's regulatory authority by statute, and rescinds previously appropriated executive branch funds — while the executive branch retains implementation discretion across dozens of programs, and federal courts retain authority to review agency actions under heightened post-Loper Bright scrutiny.

Historical precedent

The Omnibus Budget Reconciliation Act of 1993 and the Tax Cuts and Jobs Act of 2017 are the closest analogues — both used the reconciliation process to enact sweeping, multi-title changes to taxes, spending, and program eligibility affecting tens of millions of Americans.

Passed neutrality audit

Vote history

HouseJul 3, 2025
Passed
218 Yea214 Nay0 Not voting1/2 required
SenateJul 1, 2025
Bill Passed (50-50, Vice President of the United States, voted Yea)
50 Yea50 Nay0 Not voting1/2 required
SenateJul 1, 2025
Amendment Agreed to (50-50, Vice President of the United States, voted Yea)
Yea