House Passes "One Big Beautiful Act" Budget Reconciliation

Published on: May 27, 2025
On Thursday, May 22, House Republicans passed their sweeping tax and spending package, H.R. 1, the One Big Beautiful Act. Only three GOP lawmakers withheld their support from the measure.
 
The measure would make permanent lower tax rates from the Tax Cuts and Jobs Act of 2017 (“TCJA”) that expire at the end of the year, add new tax breaks for tipped and overtime wages, and provide billions of dollars for border security and defense. The cost of those policies would be partially offset by limiting eligibility and federal funding for Medicaid and food assistance benefits, rolling back clean energy tax credits from Democrats’ 2022 tax and climate law, and imposing new immigration fees.
 
Below is a breakdown of NCA’s policy priorities that were included in the House-passed version of the reconciliation bill. 
 
Key Provisions in the Reconciliation Package
  1. Tax & Business Provisions:
    1. TCJA’s paid family and medical leave tax credit for employers would be made permanent under the legislation. The credit allows employers to claim nonrefundable credits ranging from 12.5% to 25% of the wages paid to workers on paid leave.
    2. The legislation would create a deduction for qualified tips for tax years 2025 through 2028.
    3. The bill would establish a deduction for overtime compensation for tax years 2025 through 2028
    4. The bill would allow businesses to calculate their "adjusted taxable income” without including deductions for depreciation and amortization for tax years 2025 through 2029.
    5. The bill would restore the 100% bonus depreciation for certain property placed in service in 2025 through 2029.
    6. The original bill presented to the committee included a provision that would tax revenue from name and logo royalties. This provision was removed from the bill that was reported out of the House.
  2. Healthcare Provisions:
    1. The bill would codify a 2019 Trump administration rule allowing employers to help workers pay for health insurance on the individual market. It allows employers to contribute money to a tax-preferred individual coverage health reimbursement arrangement (“CHOICE arrangement”) employees can use to pay for individual insurance premiums.
      1. The bill would also create a new, two-year tax credit for small businesses that offer CHOICE arrangements for the first time.
    2. The bill includes an amended version of the Personal Health Investment Today Act (PHIT Act) that would extend health savings account eligibility to qualified fitness expenses, including gym memberships. The language included in the reconciliation measure excludes equipment for fitness activities, which was included in the PHIT Act as reintroduced this year. The provision also specifically excludes private clubs as well as golf and equestrian activities from eligibility.
  3. Immigration Provisions:
    1. The bill would establish new mandatory immigration fees, which would be adjusted annually for inflation beginning in fiscal 2026, including:
      1. $1,000 to apply for asylum with USCIS or in an immigration court.
      2. $1,000 for individuals paroled into the US.
      3. $550 for an asylum applicant, a noncitizen paroled into the U.S., or a noncitizen with temporary protected status to apply for or renew a work authorization, which would be limited to six months.
      4. $250 to apply for any nonimmigrant visa, which would be returned to visa holders who don’t seek admission to the U.S. and comply with the visa’s requirement.
Next Steps
Senate Majority Leader John Thune (R-S.D.) has signaled he expects the Senate will amend certain portions of the legislation, despite House Republicans’ preferences for as few changes as possible. For instance, there are several senators, led by Sen. Josh Hawley (R-Mo.), who have expressed concern about Medicaid cuts included in the House-passed version. 
 
Before the Senate can vote on the reconciliation package, the bill must go through the “Byrd Bath”—a critical step of the reconciliation process during which the Senate parliamentarian will review the legislation and determine whether there are any non-budgetary provisions subject to removal from the final text. 
 
If the Senate amends the reconciliation legislation, the House will need to approve the changes or go to a conference committee with the Senate. Senate GOP leadership is aiming to pass a final version by July 4. With the inclusion of a debt ceiling hike in the package, both chambers are facing a tight deadline. The U.S. Department of Treasury could hit its borrowing limit as soon as August.
 
NCA will continue to update its members on all developments as the reconciliation measure progresses through Congress. 
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