If you’re trying to figure out the economic impact of the fiscal 2025 spending bill just passed by Congress, you need to look not just at what’s in the bill, but when its provisions go into effect.
Republican politicians who voted for the bill are, after all, politicians. So it shouldn’t come as a surprise that the bill loaded tax cuts into 2025–before the mid-term election–and pushed out painful cuts into 2026–after the mid-term elections.
The bill generates bigger refunds for some taxpayers when they file their returns next spring. And puts off significant cuts to Medicaid and other aid programs that will hurt lower income taxpayers.
As a matter of pure economics the effect is to pull forward stimulus from the tax cuts and push off reductions in spending power for lower income families.
Here’s a summary of when provisions in the bill go into effect.
TAX CUTS
Higher standard deduction Starting in 2025
No taxes on tips and overtime Starting in 2025
Higher caps state/local taxes Starting in 2025
SAFETY NET CUTS
Food stamp work requirements Potentially in 2025
New rules on health insurance Starting in 2026
Medicaid work requirements Dec. 31, 2026 for most states
Medicaid and food stamp cuts Starting in 2028
CLEAN ENERGY CUTS
Electric vehicle credits Ends by Sept. 30, 2025
Home energy credits Ends by Dec. 31, 2025
