Syllabus
GS2: Effect of Policies and Politics of Developed and Developing Countries on India’s Interests, Indian Diaspora.
Context:
Recently, the US House of Representatives passed a new Bill called the One Big Beautiful Bill Act of 2025 (OBBBA).
More on the News
- The Bill, also known as HR.1, is a budget reconciliation Bill that includes a range of legislative items on taxes, immigration, and healthcare meant to usher in President Trump’s domestic policy agenda and campaign promises.
- The Bill now moves to the US Senate, where it may undergo revisions before being approved by both houses and sent to the president to become law.
- The passage of the Bill has raised concerns that have significant ramifications both for the health of the US economy and the electoral prospects of the Republican Party, which currently dominates both the federal executive and the legislature.
Key Aspects of the Bill
- Tax Cuts Made Permanent: The first element is that it extends and permanently enacts the income and estate tax cuts introduced by Trump in 2017 during his first term.
- New Tax Reduction: The second introduces new tax cuts on overtime, tips, and Social Security income, with the White House claiming a 15% tax reduction next year for Americans earning $30K–$80K.
- Boost in Security Spending: The third key element is increased spending on border security and strengthening U.S. military and defense capabilities.
- Reducing Government Waste: The fourth element is to cut down on “waste, fraud and abuse” in government spending.
- Raising the Debt Ceiling: The fifth element is raising the debt ceiling, the limit on U.S. government borrowing, essential to avoid default and ensure bills are paid.
Bill views on AI:
An AI moratorium is enshrined in Section 43201 of the OBBBA.
It prohibits any US state or political subdivision from enacting or enforcing laws or regulations on:
- Artificial intelligence models
- AI systems
- Automated decision systems for 10 years from the date of enactment.
The Bill mandates the Commerce Department to:
- Fund modernization and security of Federal IT systems using commercial AI.
- Mandate federal AI adoption for efficiency, automation, and cybersecurity.