How Does the US ‘Big Beautiful Bill’ Impact Global Economics? – Key Takeaways

Why Is This Important for Exams?
Current Affairs Relevance: Questions on major international policies frequently appear in SSC, PSC, and UPSC exams.
Economic Concepts: The bill’s tax cuts, debt ceiling changes, and spending cuts illustrate real-world fiscal policy—key for economics sections.
Comparative Politics: Understanding US legislative processes helps in answering questions about governance (e.g., NIFT/NID GD topics).
Environmental Policies: The rollback of green energy incentives ties into sustainability debates, common in design entrance exams.
Critical Analysis: Exams like FDDI test analytical skills; dissecting such bills improves structured reasoning.


Key Provisions of the ‘Big Beautiful Bill’
1. Tax Reforms
Makes Trump’s 2017 $4.5 trillion tax cuts permanent.
Eliminates taxes on tips—a promise from Trump’s 2024 campaign.
Raises SALT deduction cap (state/local taxes) from $10,000 to $40,000.

2. Spending Cuts
$1.2 trillion reductions in Medicaid and food stamps.
Stricter work requirements for low-income families and seniors.

3. Border Security & Immigration
$350 billion allocated for border walls, deportations, and ICE staffing.
New $100 fee for asylum seekers (down from $1,000).

4. Energy Policy Shifts
Ends tax credits for electric vehicles and renewables.
Shuts down the Greenhouse Gas Reduction Fund.

5. Debt Ceiling & Child Tax Credit
Raises national debt limit by $5 trillion to avoid default.
Child tax credit increased to $2,200 (permanently).


Sample Exam Questions & Answers
Q1: What is the primary economic impact of the ‘Big Beautiful Bill’?
*A1: It extends $4.5 trillion in tax cuts and adds new breaks (e.g., tax-free tips), but may increase the federal deficit by $3.4 trillion over a decade.*
Q2: How does the bill affect Medicaid?
A2: Imposes work requirements, reduces coverage for 12 million Americans, and blocks gender transition funding.
Q3: Why is the bill controversial regarding climate policy?
A3: It rolls back renewable energy incentives, potentially slowing the US transition to green energy.
Q4: What change was made to the SALT deduction?
*A4: The cap increased from $10,000 to $40,000 for five years, benefiting high-tax states.*
Q5: How might this bill influence US-India relations indirectly?
A5: Policy shifts in US immigration (e.g., stricter rules) could impact Indian students and professionals seeking visas.