The U.S. House of Representatives has passed a significant tax and spending bill that introduces a series of substantial changes impacting various sectors, from energy to education. The bill’s introduced provisions call for lowering royalty rates on fossil fuel extraction. It would eliminate the federal student loan program and expand work requirements for people who get food assistance. As it stands, the bill has the ability to profoundly reshape fiscal policies. Budgeting to obstruct shows the administration’s priorities in addressing the continued budgetary crisis.
Among the most notable provisions, the bill proposes to cut royalty rates that companies pay to extract oil, gas, and coal. It is estimated that this regulatory rollback will make it easier to produce more energy, helping position the U.S. to build on its new energy independence. This legislation represents a dangerous expansion of new leasing of public lands for drilling, mining, and logging. Proponents argue this will deliver an unprecedented shot of economic activity to communities rich in natural resources.
The bill’s sponsors say it will help respond to skyrocketing educational costs. It accomplishes these things primarily by adding $330 billion in budget savings through a complete restructuring of the student loan program. This important step is a key part of the administration’s initiative to make loan repayment processes more efficient and to reduce the financial burden on students and graduates. Supporters of the bill continue to insist that these changes will encourage a more sustainable education funding environment.
The bill broadens work requirements for those applying for food assistance, showcasing a long-term trend in welfare reform debates. Proponents of this bill’s employment-first approach say that requiring work encourages independence and self-sufficiency while on the program.
Yet the bill has been roundly blasted by environmental advocates. It proposes to repeal or phase out the clean energy tax credits that President Joe Biden put in place. This provision of the bill has sparked a spirited floor discussion. The debate over future renewable energy investments and their role combating climate change.
A bigger deal, perhaps, is the elimination of the $200 tax on gun silencers. While there have been many attempts to roll back this regulation since 1934, none have succeeded. Proponents of this provision argue that it is the most pro-Second Amendment provision ever. Opponents lament the threat of public safety dangers.
The bill increases the estate tax exemption to $15 million. It will be inflated in future years. This modification is expected to disproportionately favor wealthier households and individuals who will have less tax liability after receiving their inheritance.
The bill provides parents or guardians $1,000 for each child delivered on or between January 1, 2024 and December 31, 2028. In order to qualify, they have to open up new children’s savings accounts for their children. This new program is meant to create a culture of saving early for future education and other expenses.
The bill increases border security by providing $4 billion. This seismic shift in funding will hire an additional 3,000 new Border Patrol agents and 5,000 new customs officers. This funding would be one component of a larger strategy designed to better secure our nation while addressing immigration in a smart, efficient way.
The bill increases the excise tax on certain large university endowments to 21%. This step is meant to bring in additional income while addressing issues with concentration of wealth among institutions of higher education. In addition, it raises the state and local tax deduction, a move designed to win over more moderate members of Congress.
The bill includes non-budgetary language that would cut off Medicaid funds from going to Planned Parenthood. This controversial issue has been at the center of heated political debates over the availability of reproductive health services.
For small businesses, which are crucial to economic growth, the legislation allows partnerships and S corporations to subtract 23% of their qualified business income from federal taxes. We expect this measure to be an absolute boon in providing relief to our nation’s entrepreneurs while spurring their job and creation.
The bill provides $25 billion to build a national missile defense shield. It further provides $21 billion to restock the nation’s ammunition stockpile and $34 billion to grow the size of the naval fleet. These proposed allocations are welcomed as critical investments to strengthen national defense readiness capabilities at a time of rising global tensions.
The legislation suggests almost $700 billion in increased savings in the Medicaid program. This proposed action will likely alarm advocates for low-income health access. We criticize these cuts, which critics say disproportionately harm low-income women, children and the elderly – the primary constituents that depend on Medicaid for their health care.
“Golden Dome for America”
As this big, landmark bill continues through the promise of legislative reconciliation, its impacts will be felt far and wide — across industries, modes of transportation and jurisdictions. Certain to be affected are tax policy, energy production, and social welfare programs. These changes have the potential to make a positive long-term imprint on the American economy.
