Every year, the Office of Management and Budget presents the President’s request for the next year’s discretionary funding.
The Trump administration unveiled their Fiscal Year 2026 budget proposal in May and by May 25, 2025, “The Big Beautiful Bill” (as it was called by President Trump) passed the House (215-214 with all Democrats and 2 Republicans opposed.) As of July 1, it passed the Senate (more or less intact) where 50 Republicans voted yes, 45 Democrats, 2 Independents, and 3 Republicans (Tillis, Paul and Collins) voted no. VP Vance provided the tie vote. It went back to the House where the $4 trillion final version (218-214) passed on Thursday, July 3. The bill went to President Trump for signing which he did on July 4, 2025.
At 887 pages, the legislation is a sprawling collection of tax breaks, spending cuts and other Republican priorities, including new money for national defense and deportations.
DETAILS --- PRIMARILY AS THEY RELATE TO CLIMATE
- The bill largely erases the landmark investment in cleaner energy, jobs and communities that a Democratic-led Congress made only three years ago in the Inflation Reduction Act.
- It stomps out incentives for purchasing electric vehicles (credits will be gone by 9/30/25) and efficient appliances.
- Homeowners who were planning to install rooftop solar panels or install electric heat pumps only have until the end of this year to act before a tax break potentially worth thousands of dollars expires. Previously, all of those credits would have been available into the 2030s.
- The Clean Electricity Production Tax Credit (45Y) and the Clean Electricity Investment Tax Credit (48E) for wind and solar projects are being phased out. Companies hoping to build large-scale wind and solar farms will have to race to beat the new deadline. Previously, they would have qualified for a tax break worth at least 30 percent of project costs as long as they began construction by 2034. Now, any new projects will most likely need to start construction within a year of the law’s enactment — so roughly before July 2026 — to order to be certain that they can qualify for the full credit, which quickly disappears after that.
Democratic Oregon Sen. Ron Wyden went so far as to call the GOP provisions a “death sentence for America’s wind and solar industries and an inevitable hike in utility bills.”
- Other phase-outs also come quickly: A tax credit for installing electric vehicle chargers will now expire at the end of June 2026. A credit for making hydrogen fuels only applies to projects that begin construction before the end of 2027. (Other existing tax breaks for developing technologies like nuclear power, geothermal plants, battery storage or carbon capture will stay around until the early 2030s, albeit with new restrictions.)
- The new law could derail much of the manufacturing boom which was designed to grow out of the tax breaks for domestically made solar panels, wind turbines, batteries and EVs.
- While the Biden administration had restricted oil and gas leasing in Alaska, the bill reinstates fossil fuel lease sales in the Arctic National Wildlife Refuge, with Alaska receiving a majority of the royalties from this new production.
- The bill repeals the IRA’s historic increases on oil and gas royalty rates, lowering them to 12.5 percent from 16.6 percent; brings coal royalty rates from 12.5 percent to 7 percent—changes that make drilling and mining on federal land more profitable for companies and less so for taxpayers.
- The bill also establishes mandatory timber sales; rescinds federal funding to protect old-growth forests and boost forest resiliency; and implements minimum leasing mandates for minerals in public lands and waters.
- A last-minute addition to the bill would also provide millions of dollars of tax credits to U.S. companies producing metallurgical coal, often exported overseas for steelmaking. It also makes 4 million acres of known coal reserves available for leasing and authorizes mining on federal lands .
- Trump’s bill cuts off all the funding that the Inflation Reduction Act was pouring into communities—especially the most vulnerable ones—to help increase energy efficiency and climate resiliency and hasten their transition to cleaner energy. It wipes out any spending on greening the federal government.
- A slew of initiatives—ranging from efforts to address air pollution at schools, to cutting heavy vehicle diesel emissions—were rescinded.
- And, there is solid summary here.
GO HERE FOR A COMPLETE BREAKDOWN
The New York Times created an extremely detailed table on July 3, 2025 listing nearly every provision that would affect the federal budget over the next ten years, as estimated by the Congressional Budget Office in an analysis published June 29, 2025.
DEFICIT ESTIMATE
The Congressional Budget Office estimates the bill will increase the deficit — how much money the government spends over the amount it brings in — by $3.4 trillion over 10 years.
