Trump's bill adds $3.9 trillion deficit, keeping Biden's energy subsidies

In the United States, the House of Representatives hastened the passage of the One Big Beautiful Bill Act, which successfully moved through the Senate on Tuesday, July 2, 2025. The legislation is anticipated to contribute a staggering $3.9 trillion to the federal deficit across the next decade, with an immediate burden of $270 billion expected next year. Critics of the bill argue that its creators have employed vague budgeting practices to obscure its true financial impact. The bill is set to retain a variety of subsidies for energy sectors that were initially included in Joe Biden's Inflation Reduction Act. Notably, tax credits for advanced nuclear power, geothermal energy, battery technologies, and hydropower are among the provisions that will endure under the new legislation. While these credits will commence phasing out for new projects starting construction in 2034 and concluding in 2036, some provisions permit pre-existing projects to secure performance tax credits as long as construction begins within a year of the bill's approval. Proponents of fossil fuel industries view this as a favorable opportunity, as certain coal used in steel production has been added to the list of qualifying materials for federal tax credits—although in practice, this mainly supports foreign steel industry production due to coal exportation. Critics have also highlighted that although the House version of the bill aims to eliminate subsidies for some energy projects by 2028, the lack of gradual phase-out plans for other subsidies could lead to abrupt financial burdens for taxpayers. Estimates indicate American taxpayers could face costs of $900 for these subsidies alone by the year 2030. As the price of the One Big Beautiful Bill Act diverges from its original estimates, expectations of its environmental benefits have similarly declined. The R Street Institute projected that the original aim to reduce greenhouse gas emissions by 3.1 billion metric tons has now fallen to an estimated reduction of only 1.8 billion metric tons. Furthermore, the costs of abatement per metric ton of carbon dioxide have surged from $336 to $600 since the passage of the IRA, indicating a trend toward increased expenses for potentially ineffective climate strategies. The cumulative impact of the bill may lead to projected subsidy costs of $4.7 trillion by 2050, further complicating the landscape of U.S. energy policy and subsidy management.