On May 22, the U.S. House of Representatives passed H.R. 1, the “One Big Beautiful Bill Act,” by a vote of 215 to 214, with one member voting present. The vote followed extended negotiations and a prolonged floor debate. All Democratic members voted against the legislation. Two Republican members, Representatives Thomas Massie (KY) and Warren Davidson (OH), also opposed the bill, while Representative Andy Harris (MD) voted present. The vote result reflects a narrowly unified Republican caucus following several days of internal discussions and revisions to the bill’s language. 

What’s Included in the Bill? 
Substantive revisions were made via a manager’s amendment approved by the House Rules Committee late Wednesday. Unlike typical technical adjustments, this amendment reflected key policy changes negotiated among House Republicans. The total bill spans over 1,000 pages and contains a wide range of fiscal and policy changes. For a comprehensive summary of the provisions, click here.  

Some key provisions include: 

Tax Reforms 

• Extensions of 2017 Tax Cuts: The bill makes permanent the tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA). 

• New Tax Breaks: 

• Raises the standard deduction and child tax credit to $2,500 through 2028. 

• Increases the State and Local Tax (SALT) deduction cap to $40,000 for taxpayers earning below $500,000.  

• Modernizes LIHTC: The bill includes several key enhancements to the Low-Income Housing Tax Credit (LIHTC) program. It increases the annual volume cap for 9 percent Housing Credit allocations by 12.5 percent for calendar years 2026 through 2029. It also reduces the bond financing threshold from 50 percent to 25 percent for 4 percent Housing Credit properties placed in service after December 31, 2025, provided the bonds are issued between December 31, 2025, and January 1, 2030. Additionally, the bill allows state Housing Credit agencies to grant a basis boost of up to 30 percent for properties located in rural and Native American areas, if those properties are placed in service between January 1, 2026, and December 31, 2029. 

• Expands Opportunity Zones: The bill reforms and expands the Opportunity Zones (OZ) tax incentive by updating the criteria for what qualifies as a low-income community. It mandates greater inclusion of rural areas in OZ designations and offers enhanced tax benefits for investments in those rural zones. The original OZ designations, established under the 2017 tax law, will expire on December 31, 2026. Governors will then be required to designate new OZs based on the updated eligibility rules. These newly designated zones will receive OZ benefits from January 1, 2027, through December 31, 2033. 

• Does Not Extend New Markets Tax Credit: The bill does not extend the New Markets Tax Credit (NMTC) that promotes community development and economic growth by attracting private investment in low-income communities with high unemployment and poverty. 

• Repeals Several Clean Energy Tax Credits: 

• The bill rescinds unobligated funds from the Green and resilient Retrofit Program. 

• The bill also repeals the Energy Efficient Home Improvement Credit, Residential Clean Energy Credit, and New Energy Efficient Home Credit. It would also accelerate the phase out of the Clean Electricity Investment Credit. 

Spending Allocations 

• Healthcare: Implements work requirements for Medicaid, introduces new verification processes, and prohibits Medicaid funding for gender-affirming care and nonprofits providing abortion services.  

• Education: Ends Federal Direct subsidized loans for undergraduates and eliminates the Secretary of Education’s authority to regulate based on gainful employment.  

• Regulatory Process: Includes $100 million for the Office of Management and Budget to improve “regulatory processes” at the following agencies: Education, Energy, HHS, DHS, DOJ, CFPB and EPA. 

Fiscal Impact 

• Debt Ceiling Increase: Raises the national debt ceiling by $4 trillion.  

• Projected Deficit: The Congressional Budget Office estimates the bill will add $5.7 trillion to the national debt over the next decade.  

What’s Next? 
The bill will now move to the Senate, where it is expected to be revised. It’s not yet clear whether the Senate will send the bill to committee for markup or bring it directly to the floor. The Senate’s decisions will determine which provisions remain and whether a conference committee will be needed to resolve differences with the House version. 

The bill will be considered under budget reconciliation rules, allowing it to pass with a simple majority rather than the usual 60 votes. With a 53-47 Republican majority, near-unanimous GOP support is required for passage. Debate is limited to 20 hours under reconciliation procedures. 

The Senate is expected to take up the bill in early June. Republicans aim to have it passed by both chambers by July 4. 

NADO will continue to monitor further developments and update you as things change. 

What is Budget Reconciliation? 
Reconciliation is a special legislative process that allows for expedited consideration of certain budget-related bills. It was created by the Congressional Budget Act (Budget Act) of 1974 and is used to align spending, revenue, and debt-limit laws with the priorities set in the annual budget resolution.  

Unlike most legislation, reconciliation bills cannot be filibustered in the Senate, meaning they can pass with a simple majority (51 votes) instead of the usual 60 needed to overcome a filibuster. This makes reconciliation a powerful tool for passing controversial fiscal measures. However, its use is limited to provisions that directly affect federal spending or revenues, and a special rule (Byrd Rule) restricts inclusion of non-budgetary items.  

For more information on the process, NADO has put together a FAQ document.