The bill seeks to make Trump’s 2017 tax cuts permanent, expand the standard state and local tax deduction which helps support home buying, increase the child tax credit, eliminate clean energy subsidies, and introduce MAGA savings accounts for children which provides a $1,000 government-paid savings account for every child born during Trump's term. It also creates new tax breaks like zero tax on tips and overtime, expands health savings account access, and imposes work requirements for Medicaid recipients. On immigration, it limits access to federal benefits for undocumented individuals. Critics argue the bill adds to the deficit despite these cuts, while supporters claim it’s a long-overdue correction to Biden-era spending and regulatory expansion.
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Just hours after the House Budget Committee torpedoed Trump’s flagship tax package, Moody’s delivered another blow: a downgrade of the U.S. credit rating from Aaa to Aa1. The agency cited soaring deficits and rising interest burdens as its reasons. While Trump’s bill promised $1.5T in spending cuts, Moody’s warned those efforts are unlikely to reverse the trajectory of a debt load projected to hit 134% of GDP by 2035.
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The White House lashed out, calling the downgrade politically motivated, and blamed long-time Trump critic Mark Zandi—despite him working for a separate Moody’s entity. But the numbers are harder to spin: deficits remain near $2T annually, and interest payments are now a dominant line item on the federal ledger. With the tax bill stalled and creditworthiness under pressure, bond markets are bracing for higher yields next week, as investors reassess the long-term sustainability of U.S. fiscal policy.

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