House passes Trump budget bill as critics fear cuts to services, ballooning debt

The Republican-led US House of Representatives voted Thursday to approve President Donald Trump's sprawling tax relief and spending cuts mega-bill that critics warn would decimate health care while ballooning the debt.

The "One Big, Beautiful Bill Act" – which now moves to the Senate – is a step towards Trump's vision to shrink social safety net programmes to pay for a 10-year extension of his 2017 tax cuts.

The nonpartisan Congressional Budget Office (CBO) predicted the bill would boost the incomes of the richest 10 percent while making the bottom 10 percent poorer by slashing hundreds of billions of dollars from health care and food aid.

The CBO also estimates the tax provisions in the bill will add some $3.8 trillion to the budget deficit over 10 years while cuts to Medicaid, food stamps and other social services would amount to $1 trillion less spending.

Democrats called the bill "devastating" for the middle class, pointing to CBO estimates that its cuts to public health insurance for low-income Americans would deprive 8.6 million people of coverage. 

House Minority Leader Hakeem Jeffries described the bill as "the largest cut to health care in American history ... in order to enact the largest tax breaks for billionaires in American history". 

The House budget bill also effectively put the brakes on a clean energy production boom in the United States spurred by tax credits enacted in 2022 under former president Joe Biden. 

It cancels funding for green-energy grant programmes passed in Biden's sweeping 2022 Inflation Reduction Act, including for vehicle manufacturing, home efficiency upgrades, electricity transmission and wind power.

Energy analysts at the Rhodium Group said its preliminary review of the bill found the changes amount "to the impact of a full repeal of the energy tax credits" and could raise household energy costs by 7 percent. 

The new bill also creates incentives for pipelines, natural gas exports and exploration.

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GOP celebrates, critics fear US bankruptcy

"Legislation of this magnitude is truly nation-shaping and life-changing," said House Speaker Mike Johnson ahead of the largely party-line vote, which capped a marathon debate that went through the night.

"It's the kind of transformational change that future generations will study one day. They'll look back at this day as a turning point in American history."

The mammoth package passed along party lines – 215 votes to 214 – after Republican leadership quelled a rebellion on the party's right flank that threatened its passage.

It is the lynchpin of Trump's domestic policy agenda that could define his second term in the White House, and he took to social media to celebrate its success with his trademark hyperbole in an all-caps social media post. 

"'THE ONE, BIG, BEAUTIFUL BILL' has PASSED the House of Representatives!" Trump said, adding: "This is arguably the most significant piece of Legislation that will ever be signed in the History of our Country!"

But the package had faced scepticism from Republican fiscal hawks who say the country is careening toward bankruptcy, with independent analysts warning it would increase the deficit by as much as $4 trillion over a decade.

The White House Council of Economic Advisors' own hugely ambitious projections, which are well outside the expert consensus, claim the package will spur growth of up to 5.2 percent. Trump's Press Secretary Karoline Leavitt insisted the bill "does not add to the deficit" and would actually save $1.6 trillion through spending cuts.

But investors were unconvinced, as the yield on the 10-year US Treasury note surged to its highest level since February on Wednesday amid worries over the budget-busting bill's bottom line adding to the $36 trillion US debt burden.

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Trump has seen his polling numbers plummet in his early months back in office, but success in the House for his signature legislation underlined his continued sway over the party's quarrelsome and deeply polarised lawmakers.

The bill is likely to undergo at least a month of significant rewrites in the Senate, which plans to get the package to Trump's desk by July 4. 

(FRANCE 24 with AFP and Reuters)