For decades, few legislative initiatives in the United States have stirred as many battles on so many fronts as the so-called Big Beautiful Bill, the massive budget proposal promoted by President Donald Trump. The plan, which has just been approved in the Senate after a nail-biting vote, combines tax exemptions, social spending cuts, military investments, and a controversial remittance tax.

Passing the bill in the upper chamber was anything but easy. According to AFP, the vote ended in a 50-50 tie, which was broken by Vice President JD Vance as provided by the Constitution. Despite the Republican majority in the Senate, three conservative senators opposed the bill, reflecting the deep internal divisions within the Republican Party.

The scale of the project is hard to overstate. Trump has set July 4, Independence Day, as a symbolic deadline to sign it into law—a gesture meant to highlight his narrative of “reinventing” the country. But its content is as vast as it is controversial. Here are some of its core elements.

A reduced remittances tax

The remittance tax was one of President Trump’s campaign proposals and will particularly affect those who send cash transfers to their families. The initial version of the project included a 5% levy. The House of Representatives reduced it to 3.5%. Finally, the Senate adopted a 1% tax, which will take effect on December 31, 2025.

The tax will apply only to cash transfers or similar instruments such as cashier’s checks. Transfers made from U.S. bank accounts and payments with U.S.-issued credit or debit cards will be exempt. According to the Inter-American Development Bank, in 2024 remittances to Latin America and the Caribbean reached a record $161 billion, with Mexico as the main recipient. The Mexican states of Chiapas and Guerrero depend heavily on these funds, which account for more than 13% of their GDP.

Mexican President Claudia Sheinbaum announced that her government will launch a program to reimburse the 1% tax to migrants who send cash transfers.

Tax cuts and rising deficits

The law extends the tax cuts approved during Trump’s first term between 2017 and 2021 and eliminates taxes such as the one levied on tips. According to the Congressional Budget Office, these measures would increase the public debt by more than $3 trillion by 2034, a projection that has alarmed both Democrats and some Republicans.

Polls show the bill is widely unpopular, partly because the tax cuts would disproportionately benefit higher-income taxpayers. Democrats plan to make this narrative a central argument in the 2026 midterm elections.

More spending on defense and border control

The Big Beautiful Bill authorizes an additional $350 billion to strengthen border security and fund mass deportation programs. The plan also allocates billions more to defense, including resources to modernize the nuclear arsenal and reinforce surveillance along the border with Mexico.

This component was one of the reasons behind the divided Senate vote and the strong opposition from several Democratic lawmakers.

Cuts to Medicaid and social programs

To partially offset the loss of revenue from tax cuts, the government plans to cut Medicaid, the public health insurance program that supports millions of low-income Americans and people with disabilities. According to estimates reported by AFP, around 12 million people could lose their health coverage if all proposed cuts are implemented.

The bill also includes restrictions on the SNAP food assistance program, fueling further criticism over the law’s social impact.

Elon Musk’s rejection and Republican divisions

Billionaire Elon Musk, a former Trump advisor and one of the most influential figures in the tech economy, became an outspoken critic of the proposal. Musk accused the budget plan of betraying the electric vehicle and clean energy revolution and even proposed creating a new political party.

Trump’s response was a veiled threat. When asked by reporters whether he would consider deporting Musk—who was born in South Africa and also holds U.S. and Canadian citizenship—the president replied: “I don’t know. We’ll have to look into it.”

A victory with unfinished battles

Senate approval is only one step. The text will now return to the House of Representatives, where Democratic opposition and some moderate Republicans still believe the cuts are excessive and the resulting deficit unsustainable.

Still, Trump seems determined to make the law the emblem of his second term. The question that remains is whether this “big and beautiful” bill will be remembered as a milestone of economic prosperity or as a factor that deepened the country’s political and social divides.

With information from AFP