WASHINGTON (Reuters) -The Republican-controlled U.S. House of Representatives passed by a single vote a sweeping tax and spending bill that would enact much of President Donald Trump's policy agenda on Thursday and saddle the country with trillions of dollars in debt.
The bill would fulfill many of Trump's populist campaign pledges, delivering new tax breaks on tips and car loans and boosting spending on the military and border enforcement. It will add about $3.8 trillion to the federal government's $36.2 trillion in debt over the next decade, according to the nonpartisan Congressional Budget Office.
What Trump called the "one, big, beautiful bill" passed in a 215-214 vote, with all of the chamber's Democrats and two Republicans voting against it. A third Republican voted "present" - neither for or against the bill.
The vote came after a marathon push that kept lawmakers debating the bill through two successive nights as House Speaker Mike Johnson made tweaks to satisfy various factions of his party.
With a narrow 220-212 majority, Johnson could not afford to lose more than a handful of votes from his side.
"The House has passed generational, truly nation-shaping legislation," Johnson said.
The bill now heads to the Republican-controlled Senate, where it will likely be changed further during weeks of debate.
The 1,000-page legislation would extend corporate and individual tax cuts passed in 2017 during Trump's first term in office, cancel many green-energy incentives passed by Democratic former President Joe Biden and tighten eligibility for health and food programs for the poor. It also would fund Trump's crackdown on immigration, adding tens of thousands of border guards and creating the capacity to deport up to 1 million people each year.
The bill passed despite growing concerns over the U.S. debt, which has reached 124% of GDP, prompting a downgrade of the United States' top-notch credit rating by Moody's last week.
The U.S. government has recorded budget deficits every year of this century, as Republican and Democratic administrations alike have failed to bring spending in alignment with revenue.
Interest payments accounted for 1 out of every 8 dollars spent by the U.S. government last year, more than the amount spent on the military, according to the CBO. That share is due to grow to 1 out of every 6 dollars over the next 10 years as an aging population pushes up the government's health and pension costs, even if Trump's budget bill is not taken into account.
Investors, unnerved by the U.S.' fiscal standing and Trump's erratic tariff moves, are increasingly selling the dollar and other U.S. assets that make up the bedrock of the global financial system. U.S. stock futures were up slightly after the bill's passage, while yields on U.S. Treasury bonds rose.
"We're not rearranging deck chairs on the Titanic tonight. We're putting coal in the boiler and setting a course for the iceberg," said Representative Thomas Massie of Kentucky, one of the two Republicans to vote against the bill.
DEBT CEILING DEADLINE
The growing debt has paradoxically given urgency for Republicans to pass the bill, as it would raise the federal government's debt ceiling by $4 trillion. That would avert the prospect of default, which officials have warned could otherwise come sometime this summer.
Republicans have also argued that failure to pass the bill would mean an effective tax hike for many Americans, as Trump's 2017 tax cuts are due to expire at the end of the year.
Republicans on the party's right flank had pushed for deeper spending cuts to lessen the budget impact, but they met resistance from centrists who worried that would fall too heavily on the 71 million low-income Americans enrolled in the Medicaid health program.
Johnson made changes to address conservatives' concerns, pulling forward new work requirements for Medicaid recipients to take effect at the end of 2026, two years earlier than before. That would kick several million people off the program, according to CBO. The bill also would penalize states that expand Medicaid in the future.
Johnson also expanded a deduction break for state and local tax payments, which was a priority for a handful of centrist Republicans who represent high-tax states like New York and California.
Democrats blasted the bill as disproportionately benefiting the wealthy while cutting benefits for working Americans. CBO found it would reduce income for the poorest 10% of U.S. households and boost income for the top 10%.
"This bill is a scam, a tax scam designed to steal from you, the American people, and give to Trump's millionaire and billionaire friends," Democratic Representative Jim McGovern said.
(Reporting by David Morgan and Bo Erickson; writing by Andy Sullivan, Editing by Scott Malone, Jamie Freed, Saad Sayeed and Toby Chopra)
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