The Senate passed President Donald Trump’s “One Big Beautiful Bill” yesterday… just barely.
JD Vance cast the tie-breaking vote. That means it’s now headed to the House.
You’ve probably heard a lot about this legislation by now. Some people are raving about it. Others are ranting, including one-time ally and former DOGE (Department of Government Efficiency) director Elon Musk.
Right or wrong, for better or worse, the world’s richest man has made his position about the bill very clear. Last month, he called it a “disgusting abomination” for increasing government spending after he’d worked so hard to cut it.
At least that was his stated reasoning. Some have speculated that his real objection is how the bill eliminates tax credit for electric vehicles (“EVs”).
(More on that shortly.)
Regardless, Musk hasn’t changed his mind, as evidenced by his X post Monday night. It featured a picture of Pinocchio on fire with the caption, “LIAR Voted to increase America’s DEBT by 5,000,000,000.00.” Then he added the threat:
Anyone who campaigned on the PROMISE OF REDUCING SPENDING but continues to vote on the BIGGEST DEBT ceiling increase in HISTORY will see their face on this poster in the primary next year.
There is a lot of spending in the One Big Beautiful Bill. Moreover, I’m sure it includes stuff it doesn’t need to.
We are talking about the U.S. government, after all. It’s known for overspending, plenty of “pork,” and sweetheart deals.
But, with all due respect to Elon Musk, we’re also talking about Donald Trump. I’ve met the man before. I’ve studied him. I’ve strategized with him.
Everything I’ve seen and continue to see points to him being a tough negotiator who epitomizes the “art of the deal.”
Trump is far from perfect. So, I don’t expect perfection in legislation he backs – big and beautiful as they may be. But I do trust him to do everything he can to point this country in the right direction and to build wealth for all hard-working American citizens.
And that’s precisely what I see in (most) of the One Big Beautiful Bill.
Extending the Tax Cuts
One of the most significant areas the One Big Beautiful Bill addresses is the 2017 tax cuts… which are currently set to expire at the end of this year.
Back when it was first debated and passed under Trump 1.0, these provisions were billed as being all about “the rich.” And yes, there were corporate tax cuts in it, reducing the top rate from 35% to 21%.
That’s a 40% drop.
But that money did come back to everyday people. With American companies sitting on a pile of cash they hadn’t been expecting, many returned that capital to investors in the form of generous buybacks and special dividends. All else equal, that’s never a bad thing.
And as a small business owner – and as someone who knows plenty of other small business owners – I can tell you it made an enormous difference for us “little guys” as well. After 2017, we had more money to grow our businesses, hiring more people and signing up for more programs.
And those efforts stimulated even more economic growth along the way.
The same goes for individuals who saw their federal requirements fall as well. Most tax brackets for both individuals and those who are married and filing jointly found out they had more in the bank after 2017.
The Big Beautiful Bill also provides for additional tax relief with an extra inflation adjustment (one year) which reduces income taxes and boosts take-home pay (excludes the top income tax bracket of 37%).
If it doesn’t pass, those financial benefits will expire… and you’ll find yourself with a noticeable drop in your take-home pay.
100% Bonus Depreciation
I wrote an article a few months ago explaining how the bill extends the 100% bonus depreciation clause. As I said at the time, “[This] allows companies to accelerate depreciation by recovering the cost of acquired assets, such as equipment or machinery, in the purchase year rather than over the course of their useful life.”
This allows them to invest and grow more quickly rather than wait for those depreciation benefits to trickle in.
If the One Big Beautiful Bill passes, businesses will be able to immediately expense the entire cost of qualified property purchased on or after January 20, 2025. Under the existing sunset provision, restoration would be at 40% in 2025 and 20% in 2026.
This is a significant catalyst for manufacturers especially, reducing their cost of capital for new equipment. The same holds true for the aviation sector, allowing it to make new purchases more quickly and with less debt.
(One of our picks at Wide Moat Confidential is aviation-adjacent, which means the BBB should serve as a catalyst!)
The bonus depreciation clause doesn’t apply to many commercial real estate structures like retail buildings, offices, etc. But it does cover “qualified improvement property.” Think renovations and general maintenance – HVAC, lighting, interior doors, etc.
As a CRE developer, I promise that every little bit helps.
Drill, Baby, Drill
I wrote about the “Golden Dome” aspect of the One Big Beautiful Bill back in May. And I don’t think the Senate altered those funding requests in the legislation it just approved.
(You can read my analysis right here.)
I personally think it’s a great idea – if it can be properly implemented. And the same goes for the “drill, baby, drill” aspects of this legislation.
For instance, it mandates a minimum of 30 oil and lease sales to offshore operators in the Gulf of America (formerly the Gulf of Mexico) over the next 15 years. That’s a significant uptick over the past five years when only three such sales were made.
As for onshore activity, the Department of the Interior would “immediately resume” quarterly lease sales. And Alaska specifically would:
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Hold at least four lease sales in the Arctic National Wildlife Refuge in the foreseeable future
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Hold at least six in the next decade in Cook Inlet
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Resume oil and gas programs in the National Petroleum Reserve
Remember that, under Trump’s first administration, the U.S. became a net exporter of oil and natural gas. That made us less reliant on foreign sources, which strengthened our national security and standing in the world… not to mention lowered gas prices, which helped boost economic growth all around.
I fully believe Trump can pull that off again.
The Not-So-Beautiful
What I’m more iffy on are Trump’s cuts to clean energy.
As I’ve shared on several occasions, the world is looking down the barrel of soaring energy demand over the coming years. You have the proliferation of artificial intelligence and the huge number of data centers going up to thank for that.
I’m glad the administration is emphasizing access to traditional energy sources like oil and natural gas. But this isn’t a time to be picky.
The current draft of the bill would:
- Retire the residential 30% solar tax credit 180 days after Trump signs it.
- Offer 100% of existing tax credits to solar- and wind-power projects that begin construction this year, 60% for next year, and 20% for 2027. After that, they’re on their own. (They were originally supposed to expire in 2032.)
- Phase out such incentives for new battery storage, hydropower, geothermal, and nuclear plants between 2034 and 2036.
As for those tax credits for EVs that Musk may or may not be horrified by? They’ll end six months after the bill gets signed.
If it’s signed, of course. Because, right now, it’s only a bill.
More Good Than Bad
With the One Big Beautiful Bill back in the House’s hands, it’s a safe bet that there won’t be a single Democrat who votes for it. And fiscal conservatives have already made it known how unhappy they are with the $5 trillion debt ceiling increase – a massive amount, admittedly.
There are also cuts to Medicaid that “are set to extract hundreds of billions in government savings but cause millions to lose coverage,” to quote Yahoo Finance. And the fact that illegal immigrants will still be provided for, thanks to Senator Elizabeth MacDonough, will infuriate some House members even more.
At last check, some 20 Republicans there were expressing significant misgivings. A majority in the House is 218. And there are 220 Republicans. In other words, there’s not much wiggle room.
That’s why I’m sure the next few days or weeks will be filled with political drama… rumors… accusations… name-calling from more than just Elon Musk… and who knows what else.
As I’ve already said, this One Big Beautiful Bill didn’t start out perfect. It’s not perfect now. And I sincerely doubt the final version will be flawless either.
But I do believe there are more provisions in there that will help this great nation of ours thrive again. President Trump declared that inauguration day 2025, January 20, began the “Golden Age of America,” and I still think he’ll be proven right about that in the end.
In which case, one of the catalysts toward that goal will probably be the One Big Beautiful Bill – just as soon as it finally gets passed.
Regards,
Brad Thomas
Editor, Wide Moat Daily
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