Massive Bill Boosts Farm Subsidies, Funds $50 Billion in Defense, and Imposes New Fees on Immigrants

This massive piece of legislation, spanning everything from farm subsidies to military budgets and tax policy, is essentially three or four major bills rolled into one. For busy people, the key takeaway is that it locks in significant tax relief, pumps billions into defense and border security, and fundamentally shifts the government’s approach to climate, immigration, and social safety nets.

Your Tax Bill: Permanent Relief and New Deductions

If you’re a family making less than six figures, this bill is locking in some good news. Section 70102 makes the higher standard deduction permanent, meaning more of your income is shielded from taxes. Section 70104 extends and increases the Child Tax Credit (CTC) from $2,000 to $2,200 per child, which is a welcome bump for parents. These changes, set to start after 2025, bring long-term certainty to your tax planning.

But the bill also introduces some wild, temporary ideas aimed at middle-class workers. Starting in 2025, Section 70202 creates a temporary deduction for qualified overtime compensation, capped at $12,500 annually, and Section 70201 creates a deduction for tips, capped at $25,000. Both deductions phase out if your income exceeds $150,000. If you're a server or a factory worker pulling extra shifts, this could mean a noticeable difference in your take-home pay for the next few years. The bill also temporarily allows you to deduct interest paid on car loans for U.S.-assembled vehicles purchased between 2025 and 2028, capped at $10,000 in interest per year (Sec. 70203). This is a big break for new car buyers, especially since you can claim it even if you take the standard deduction.

The Climate Policy U-Turn: Credits Terminated

For anyone planning to buy an electric vehicle or upgrade their home for energy efficiency, this bill pulls the rug out from under existing incentives. The legislation terminates or restricts nearly every major climate-related tax credit established in previous years, starting mostly in late 2025 or mid-2026.

• Electric Vehicles (Sec. 70501, 70502, 70503): The tax credits for new and used clean vehicles, including the commercial clean vehicle credit, are all terminated after September 30, 2025. If you were counting on that $7,500 credit for your next car, you have a hard deadline.
• Home & Fuel (Sec. 70505, 70506, 70511): The energy efficient home improvement credit and the residential clean energy credit (for things like solar panels) are terminated after December 31, 2025. Credits for clean hydrogen production also end early, on January 1, 2028.

Furthermore, the bill imposes tough new restrictions on who can claim remaining clean energy credits (like the clean electricity production credit, Sec. 70512), specifically barring companies with ties to “specified foreign entities” from receiving them. This is a clear move to yank federal support for the transition to cleaner energy.

Immigration: The Fee Barrier

Title X introduces a series of new, mandatory, and non-waivable fees that will drastically increase the cost of navigating the U.S. immigration system for nearly everyone. This affects individuals seeking protection and those seeking to work legally.

• Asylum (Sec. 100002, 100009): Applicants must now pay a non-waivable application fee (starting at $100 in FY2025) and a new annual fee (starting at $100 in FY2025) for every year their asylum application is pending. This is a direct financial barrier for people seeking refuge.
• Work Permits (Sec. 100003, 100012): Initial and renewal applications for employment authorization documents (EADs) for asylum seekers, parolees, and Temporary Protected Status (TPS) holders now carry mandatory, non-waivable fees starting at $550 or $275, depending on the status. For a TPS recipient already struggling, a renewal fee of $275 just to keep their job authorization is a significant burden.
• Enforcement Fees (Sec. 100016, 100017): The bill introduces a massive $5,000 fee for aliens ordered removed in absentia (if later apprehended) and a $5,000 fee for inadmissible aliens apprehended between ports of entry. These fees are also non-waivable.

Medicaid: Work Requirements and Service Limits

For those relying on Medicaid, the bill introduces significant new hurdles. Section 71119 requires states to establish community engagement requirements for certain Medicaid expansion individuals (ages 19-64, non-pregnant, not on Medicare). To keep coverage, these individuals must log at least 80 hours per month in work, community service, or school. Failure to meet this requirement or to provide the necessary proof can lead to disenrollment. While states must allow for exemptions (e.g., for caregivers or those with serious medical conditions), the complexity of proving compliance and the risk of losing coverage due to paperwork errors are high. States must begin implementing this no later than the first quarter of 2027.

The bill also tightens eligibility for non-citizens (Sec. 71109), limiting federal matching funds for most aliens starting in October 2026, and increases the home equity limit for long-term care eligibility up to $1 million (Sec. 71108). Furthermore, Section 71111 imposes a moratorium on the implementation of new federal staffing standards for long-term care facilities until 2034.

Defense and Border Security: Massive Cash Injections

Titles II and IX direct staggering sums toward defense and border security, largely bypassing the standard appropriations process.

• DoD Funding (Title II): The bill appropriates over $50 billion for the Department of Defense, with funds available until 2029. This includes $4.6 billion to fund a second Virginia-class submarine, $5.4 billion for two additional destroyers, and billions more for missile defense, munitions, and air superiority programs (Sec. 20002-20007). This is a massive, multi-year investment aimed at military modernization and readiness.
• Border Infrastructure (Title IX): The bill allocates $46.5 billion for border wall construction and technology, $45 billion for Immigrations and Customs Enforcement (ICE) detention capacity, and $10 billion for a new State Border Security Reinforcement Fund (Sec. 90001, 90003, 90005). This level of funding signals a complete federal commitment to physical barriers and detention-based enforcement.

Agriculture: Locking in Higher Prices

For farmers, the bill is a win for stability. Section 10301 sets new, higher reference prices for major commodities starting in 2025, including wheat ($6.35/bushel), corn ($4.10/bushel), and soybeans ($10.00/bushel). These prices are the floor used to calculate federal subsidies, meaning higher potential payouts when market prices drop. The bill also extends the major farm safety net programs, including Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC), through 2031, providing long-term predictability for the agricultural sector.