President Trump’s sprawling reconciliation bill did not include a crypto-specific amendment industry leaders had been hoping for. Sen. Cynthia Lummis (R-WY) had pushed Monday to include several crypto-related tax perks in the legislation.
Based on the https://www.congress.gov/bill/119th-congress/house-bill/1/texthttps://www.congress.gov/bill/119th-congress/house-bill/1/text , there are no direct mentions of “crypto,” “cryptocurrency,” “blockchain,” or any related digital asset terms within Subtitle A: Homeland Security Provisions, or in the broader context of TITLE IX: Committee on Homeland Security and Governmental Affairs, or indeed anywhere else in the provided text excerpts.
As discussed previously, Subtitle A: Homeland Security Provisions within TITLE IX primarily focuses on significant appropriations and directives for various aspects of border security, immigration enforcement, and federal protection. The funding allocated, largely for fiscal year 2025 and available through September 30, 2029, is designated for tangible assets and personnel, and technological enhancements for specific operational purposes.
While “crypto” is not mentioned, the sources do indicate a focus on modernizing capabilities through other advanced technologies within homeland security and defense. For instance, Subtitle A, Section 90004: Border Security, Technology, and Screening, specifically appropriates funds for the “Procurement and integration of new nonintrusive inspection equipment and associated civil works, including artificial intelligence, machine learning, and other innovative technologies” to combat illicit narcotics at ports of entry and along borders. This section also defines “autonomous” capabilities in surveillance towers as systems designed to apply “artificial intelligence, machine learning, computer vision, or other algorithms to accurately detect, identify, classify, and track items of interest in real time”.
Beyond TITLE IX, other committees and their provisions in the larger document also highlight investments in advanced technologies, such as:
- TITLE II: Committee on Armed Services includes sections on “Enhancement of Department of Defense resources for improving the efficiency and cybersecurity of the Department of Defense”, “accelerated development and integration of advanced 5G/6G technologies for military use”, and the “advancement of the artificial intelligence ecosystem”.
- TITLE IV: Committee on Commerce, Science, and Transportation mentions improving “maritime domain awareness… in the cyber domain”.
- TITLE V: Committee on Energy and Natural Resources discusses “Transformational artificial intelligence models” at National Laboratories for scientific research and data sharing.
It is important to clarify that while these sources emphasize the integration of artificial intelligence, machine learning, and cybersecurity into various federal operations, these technologies are distinct from “crypto” or “cryptocurrency.” The provided text does not draw any connection between the mentioned advanced technologies and digital currencies or blockchain, nor does it indicate any provisions or concerns related to them.
The proposed legislation, H.R. 1, significantly influences the balance of federal funding across various sectors through a combination of new appropriations, rescissions of existing funds, and modifications to tax policies and program structures.
Here’s a breakdown of how federal funding is influenced across different sectors:
I. National Security and Border Operations:
- Department of Defense (DOD): The legislation proposes substantial increases in federal funding for various defense initiatives, often available until September 30, 2029:
- Quality of Life for Military Personnel: Includes $590,000,000 to increase the Temporary Lodging Expense Allowance, $100,000,000 for Impact Aid payments, and $62,000,000 for childcare center staffing modernization.
- Shipbuilding: Provides specific appropriations totaling billions, such as $188,360,000 for maritime robotic autonomous systems, $250,000,000 for wave-powered unmanned underwater vehicles, and $150,000,000 for retention of inactive reserve fleet ships.
- Integrated Air and Missile Defense: Allocates billions of dollars, including $250,000,000 for directed energy capabilities, $2,000,000,000 for air moving target indicator military satellites, $5,600,000,000 for space-based and boost phase intercept capabilities, $7,200,000,000 for military space-based sensors, and $2,550,000,000 for military missile defense capabilities. It also includes $3,300,000,000 for grants and purchase commitments under the Industrial Base Fund.
- Low-Cost Weapons Production: Appropriates significant funds, such as $600,000,000 for the acceleration of Strategic Capabilities Office programs and $1,000,000,000 to the “Department of Defense Credit Program Account” for capital assistance programs.
- Efficiency and Cybersecurity: Directs $150,000,000 for business systems replacement to accelerate audits and $20,000,000 for defense cybersecurity programs.
- Air Superiority: Provides $3,150,000,000 to increase F-15EX aircraft production and funds to prevent the retirement of F-22 and F-15E aircraft.
- Indo-Pacific Command: Allocates $3,650,000,000 for the development, procurement, and integration of United States military satellites and their protection.
- Border Support and Counter-Drug Missions: Appropriates $1,000,000,000 for the deployment of military personnel and operations in support of border and counter-drug missions.
- Department of Homeland Security (DHS) & Related Agencies: A massive increase in federal funding is directed towards border security and immigration enforcement, generally available until September 30, 2029:
- Border Infrastructure and Wall System: $46,550,000,000 is appropriated for elements of the border infrastructure and wall system.
- Personnel, Fleet, and Facilities: Provides $4,000,000,000 for U.S. Customs and Border Protection (CBP) personnel, fleet vehicles, and facilities.
- Detention Capacity: Allocates $2,500,000,000 for family residential centers.
- Border Security, Technology, and Screening: Appropriates $6,168,000,000 for enhancing border security, including combating drug trafficking.
- State and Local Assistance: Includes $15,000,000,000 for a new “State Border Security Reinforcement Fund” for grants to state and local governments for border security purposes, along with funds for specific events like the FIFA World Cup and Olympics security.
- DHS Border Support Reimbursement: $10,000,000,000 is appropriated for reimbursement of costs incurred by states in supporting DHS border missions.
- U.S. Immigration and Customs Enforcement (ICE): $29,850,000,000 is appropriated for enforcement and removal operations, investigations, and related support.
- Federal Law Enforcement Training Centers: Receives $750,000,000, with $285,000,000 for training and $465,000,000 for facilities.
- Department of Justice (DOJ): Receives $3,330,000,000 for various purposes, including hiring immigration judges and support staff, combating drug trafficking, prosecuting immigration matters, and compensating states for incarcerating criminal aliens.
- Bureau of Prisons: Appropriates $5,000,000,000, with $3,000,000,000 for hiring and training new employees and for salaries and benefits of the current workforce.
II. Agriculture, Nutrition, and Rural Development:
- Nutrition Programs (SNAP): The federal share for SNAP administrative cost sharing is reduced from 50% to 25% for fiscal year 2027 and thereafter, potentially shifting a greater financial burden to states. Matching funds requirements for SNAP also change based on state payment error rates, which could alter federal contributions.
- Forestry: Unobligated balances are rescinded from previous forestry provisions, indicating a reduction in federal forestry funding.
- Commodities: $50,000,000 is made available for the implementation of subtitle C of Title I, focusing on effective reference prices, base acres, and payment mechanisms for agricultural commodities.
- Crop Insurance: The funding for program compliance and integrity under the Federal Crop Insurance Act is increased to $6,000,000 for FY 2026 and subsequent years (from $4,000,000). Similarly, funding for reviews, compliance, and integrity is increased to $10,000,000 for FY 2026 and thereafter.
- Conservation: While some new funding is allocated for conservation programs (e.g., $625,000,000 for FY 2026 increasing to $700,000,000 for FY 2029-2031 for general conservation, $425,000,000 for FY 2026 for Regional Conservation Partnership Program), unobligated balances are also rescinded from previous conservation appropriations.
- Supplemental Agricultural Trade Promotion Program: A new program is established with $285,000,000 for fiscal year 2027 and each fiscal year thereafter to promote U.S. agricultural exports.
- Research: Various research initiatives receive new funding, including $37,000,000 for the Foundation for Food and Agriculture Research, $60,000,000 for scholarships at 1890 Institutions for fiscal year 2026, $8,000,000 for the Assistive Technology Program for Farmers with Disabilities for fiscal year 2026, and $175,000,000 for the Specialty Crop Research Initiative for fiscal year 2026.
- Horticulture: Provides $90,000,000 for FY 2026 for Plant Pest and Disease Management, $100,000,000 for FY 2026 for Specialty Crop Block Grants, and $10,000,000 for FY 2026-2031 for the Organic Production and Market Data Initiative.
- Miscellaneous Agricultural: Includes $233,000,000 for each of fiscal years 2026 through 2030 for Animal Disease Prevention and Management.
III. Banking, Housing, and Urban Affairs:
- Bureau of Consumer Financial Protection: The funding cap for the Bureau of Consumer Financial Protection is reduced from 12% to 6.5%, a significant reduction in its funding allocation.
- Green and Resilient Retrofit Program for Multifamily Housing: Unobligated balances are rescinded from this program, cutting federal funding for green housing retrofits.
- Defense Production Act: $1,000,000,000 is appropriated for fiscal year 2025 to carry out the Defense Production Act.
IV. Commerce, Science, and Transportation:
- Coast Guard Mission Readiness: Provides new appropriations, including $162,000,000 for Waterways Commerce Cutters and $75,000,000 for autonomous maritime systems.
- Spectrum Auctions: $50,000,000 is appropriated to the Department of Commerce for fiscal year 2025 to support spectrum analysis and reporting.
- Air Traffic Control Improvements: Allocates significant new funding, such as $4,750,000,000 for telecommunications infrastructure modernization and $1,900,000,000 for constructing a new air route traffic control center.
- Space Exploration (NASA): $9,995,000,000 is appropriated for fiscal year 2025 for Mars missions, Artemis missions, and the Moon to Mars program, available until September 30, 2032.
- National Oceanic and Atmospheric Administration (NOAA): Unobligated balances are rescinded from various NOAA appropriations, reducing federal funding for these areas.
- Travel Promotion Fund: Annual transfers to the Travel Promotion Fund are reduced from $100,000,000 to $20,000,000, a significant federal funding reduction for tourism promotion.
- Alternative Fuel and Low-Emission Aviation Technology: Unobligated funds are rescinded.
- Public Wireless Supply Chain Innovation Fund: $850,000,000 is permanently rescinded from this fund.
V. Energy and Natural Resources:
- Oil and Gas Leasing: Repeals provisions from Public Law 117–169 that increased onshore and offshore oil and gas royalty rates. It also repeals royalties on extracted methane, and changes the revenue sharing for Alaska oil and gas leasing, with 70% of receipts going to Alaska starting in FY 2034. This indicates a policy shift to promote oil and gas activity, potentially reducing federal revenue from these sources in the short term, but increasing state share of revenues in the long term.
- Coal Leasing: The coal royalty rate is reduced to not more than 7% (from 12.5%) through September 30, 2034, which will reduce federal revenue from coal leases.
- National Park Service and Bureau of Land Management: Unobligated balances are rescinded from funds made available by Public Law 117–169.
- Celebrating America’s 250th Anniversary: Appropriates $150,000,000 for fiscal year 2025 for events and activities.
- Energy Dominance Financing: $1,000,000,000 is appropriated for fiscal year 2025 to carry out activities under the Energy Policy Act of 2005 to support energy and critical minerals infrastructure.
- Artificial Intelligence Models: Allocates $150,000,000 to the Department of Energy for transformational artificial intelligence models.
- Water Conveyance and Storage: Provides $1,000,000,000 for fiscal year 2025 for construction and activities that restore or increase capacity of existing Bureau of Reclamation facilities.
VI. Environment and Public Works:
- Clean Energy and Environmental Programs: The legislation implements numerous and significant rescissions of unobligated funding from various clean energy, environmental protection, and low-carbon programs, primarily those established under Public Law 117–169 (the “Inflation Reduction Act of 2022”). This marks a major reduction in federal investment in these areas, including funds for clean heavy-duty vehicles, the Greenhouse Gas Reduction Fund, diesel emissions reductions, air pollution, methane emissions, environmental product declarations, and environmental/climate justice block grants.
- John F. Kennedy Center for the Performing Arts: Receives $256,657,000 for fiscal year 2025 for capital repair, restoration, and maintenance.
VII. Ways and Means (Tax and Health):
- Tax Reforms: The bill introduces numerous tax code changes that influence federal revenue and expenditures through adjustments to individual and business tax deductions, credits, and international tax rules. These include:
- Permanent Tax Relief: Permanently extends reduced individual income tax rates.
- Business Tax Reform: Makes full expensing for certain business property permanent and allows full expensing of domestic research and experimental expenditures. It also enhances the advanced manufacturing investment credit from 25% to 35%.
- International Tax Reforms: Modifies foreign tax credit limitations and rules related to foreign-derived deduction eligible income and net CFC tested income. It also increases the base erosion minimum tax from 10% to 10.5%.
- Family and Small Business Investments: Enhances the employer-provided child care credit and the dependent care assistance program, and makes permanent enhancements to the low-income housing tax credit and new markets tax credit.
- “Green New Deal” Spending Termination: Terminates or restricts various clean energy tax credits, including those for previously-owned clean vehicles, clean vehicles, and qualified commercial clean vehicles. It also introduces restrictions related to “prohibited foreign entities” for certain energy credits. This represents a significant shift away from federal subsidies for certain clean energy initiatives.
- America-First Energy Policy: Extends and modifies the clean fuel production credit, but prohibits foreign feedstocks and negative emission rates. It also restricts the carbon oxide sequestration credit.
- New Revenue Streams: Imposes a 1% excise tax on certain remittance transfers.
- COVID-ERTC Enforcement: Includes provisions to enforce and recover potentially erroneous COVID-related employee retention credits.
- Direct File Task Force: Appropriates $15,000,000 to the Treasury for a report on free tax filing options.
- Health Programs (Medicaid/Medicare):
- Medicaid Fraud and Enrollment: Provides funding for CMS to establish systems to reduce duplicate enrollment ($10,000,000 for FY 2026) and ensure deceased individuals do not remain enrolled ($5,000,000 for FY 2026). It also appropriates $75,000,000 for FY 2026 for eligibility redeterminations.
- Medicaid Eligibility Restrictions: Restricts Alien Medicaid eligibility from October 1, 2026 ($15,000,000 for FY 2026 for implementation), and limits the Federal Medical Assistance Percentage (FMAP) for emergency Medicaid for aliens. These changes could reduce federal Medicaid expenditures.
- Wasteful Spending Prevention: Moratoriums are placed on certain rules regarding staffing standards for long-term care facilities and retroactivity of Medicaid coverage for new applicants. It also introduces new rules for provider taxes to reduce state Medicaid costs and sunshines certain increased FMAP incentives. Federal payments to certain “prohibited entities” are also restricted for a year.
- Medicaid Demonstration Projects: Requires budget neutrality for Medicaid demonstration projects under Section 1115 beginning January 1, 2027, aiming to limit federal expenditures.
- Community Engagement Requirements: Allocates $200,000,000 for FY 2026 to CMS for implementation, alongside $200,000,000 in grants to states for establishing necessary systems.
- Home or Community-Based Services: Provides $50,000,000 for FY 2026 and $100,000,000 for FY 2027 for adjustments to Medicaid coverage for these services.
- Rural Health Transformation Program: This is a massive new federal investment, appropriating $10,000,000,000 annually for fiscal years 2026 through 2030 to states for improving access to rural health care, with an additional $200,000,000 for FY 2025 for implementation.
VIII. Health, Education, Labor, and Pensions:
- Student Loan Programs: Introduces significant policy changes that will impact federal spending and revenue related to student loans:
- Establishes loan limits for graduate and professional students and terminates PLUS loans for these groups.
- Transitions borrowers to new income-based repayment plans and eliminates certain income-contingent repayment options.
- Expands eligibility for Public Service Loan Forgiveness to include payments under the new Repayment Assistance Plan.
- Delays new federal rules related to borrower defense to repayment and closed school discharges for loans originating before July 1, 2035, aiming to avoid potential federal spending on loan discharges.
- Pell Grants:
- Expands the definition of “adjusted gross income” for Pell Grant eligibility to include foreign income from July 1, 2026, and makes students with a high Student Aid Index ineligible, which may restrict eligibility.
- Establishes a new “Workforce Pell Grant Program” for eligible students in certain workforce programs.
- Significantly increases the Pell shortfall amount to $12,670,000,000 (from $2,170,000,000), representing a major federal funding increase for Pell Grants.
- Office of Refugee Resettlement: Appropriates $300,000,000 for fiscal year 2025 for potential sponsor vetting for unaccompanied alien children.
IX. Judiciary:
- Immigration Fees: Introduces or increases various fees for immigration applications, renewals, and appeals. While these are fees, a portion of the revenue generated is often credited to specific agencies (like USCIS or Executive Office for Immigration Review) or deposited into the general fund of the Treasury, effectively acting as new federal revenue sources to support immigration services and enforcement. For example, 25% of certain employment authorization fees go to USCIS for fraud prevention.
- Courts: Appropriates $1,250,000 annually for FY 2025-2028 to the Administrative Office of the United States Courts and $1,000,000 annually for FY 2025-2028 to the Federal Judicial Center for analyses and training.
- Radiation Exposure Compensation: Extends the termination date of the Radiation Exposure Compensation Fund to December 31, 2028, continuing this federal compensation program.
X. Debt Limit:
- The public debt limit is increased by $5,000,000,000,000, which does not directly appropriate funds but enables further federal borrowing and spending.
In summary, the proposed legislation indicates a strong emphasis on increasing federal spending for national security, border enforcement, and related law enforcement activities, alongside significant new investments in rural health and certain agricultural research/promotion areas. Concurrently, it enacts sweeping reductions and rescissions of federal funding for environmental protection and clean energy initiatives, representing a notable policy shift in federal priorities. The bill also reconfigures various tax code provisions and student loan programs, which will indirectly impact federal revenue and expenditure streams.
The proposed legislation includes several provisions designed to help companies manage their tax liabilities as they grow, primarily by offering deductions, credits, and adjustments to reporting thresholds that can reduce tax burdens or administrative complexities associated with growth.
Here’s how the legislation addresses concerns about tax liabilities and growth:
- Enhanced Qualified Business Income (QBI) Deduction:
- The taxable income limitation phase-in amounts for the QBI deduction are increased from $50,000 ($100,000 for joint returns) to $75,000 ($150,000 for joint returns). This means that more pass-through business income can qualify for the deduction before the limitations begin to apply, allowing small business owners to keep more of their earnings as their income grows.
- A minimum deduction of $400 for active qualified business income is introduced for taxpayers with at least $1,000 in aggregate qualified business income, with these amounts adjusted for inflation after 2026. This ensures a baseline tax benefit for small, actively engaged businesses.
- Full Expensing and Increased Depreciation Limits for Business Property:
- The provision makes 100% full expensing permanent for certain qualified business property acquired after January 19, 2025. This allows businesses to immediately deduct the full cost of eligible new or used property, rather than depreciating it over many years. This significantly reduces taxable income in the year of acquisition, freeing up capital for further investment and growth.
- The Section 179 expensing limit is increased from $1,000,000 to $2,500,000, and the phase-out threshold is raised from $2,500,000 to $4,000,000. These higher limits, adjusted for inflation, mean that more businesses can deduct a larger amount of equipment purchases immediately, encouraging capital investment without incurring high immediate tax burdens.
- A new 100% special depreciation allowance is introduced for qualified production property placed in service after the date of enactment, provided its construction began between January 19, 2025, and January 1, 2029. This offers substantial immediate tax savings for businesses investing in manufacturing or other qualified production facilities.
- Favorable Treatment for Research and Business Interest:
- Full expensing of domestic research and experimental expenditures is allowed by creating a new Section 174A. Businesses can charge these expenditures to a capital account and amortize them over 60 months or longer. This provides a direct tax incentive for companies to invest in domestic research and development.
- The limitation on business interest deductions is modified by removing the sunset clause, effectively making a more favorable deduction permanent. This change is beneficial for businesses by allowing them to deduct a greater portion of their business interest expenses, reducing their overall taxable income. It also expands floor plan financing to include certain trailers and campers. These changes apply to taxable years beginning after December 31, 2024.
- Reduced Administrative Burden and Enhanced Investment Opportunities:
- The exclusion for gain from Qualified Small Business Stock (QSBS) is expanded. For stock acquired after the applicable date, a phased increase in exclusion is introduced, reaching 100% for stock held for 5 years or more. The per-issuer dollar limit for eligible gain is also increased from $10,000,000 to $15,000,000 for stock acquired after the applicable date. Furthermore, the aggregate gross assets limit for a qualified small business is increased from $50,000,000 to $75,000,000. These changes make investing in and growing small businesses significantly more attractive by reducing the capital gains tax burden upon exit.
- The de minimis rules for third-party network transactions are reverted to higher thresholds of $20,000 and 200 transactions. This reduces the reporting burden for many small businesses and individuals who sell goods or services through platforms like PayPal, preventing unexpected tax forms for lower levels of activity.
- The threshold for requiring information reporting (e.g., Form 1099-NEC) is increased from $600 to $2,000. This reduces the administrative burden for businesses making payments to contractors and for contractors receiving smaller amounts, simplifying tax compliance for smaller operations.
- Targeted Agricultural Benefits:
- Payment limitations for certain agricultural programs are increased from $125,000 to $155,000 and are subject to annual inflation adjustments. This allows larger agricultural operations to continue receiving substantial government support as they grow.
- An exception to the adjusted gross income limitation is created for certain agricultural payments, allowing businesses deriving 75% or more of their gross income from farming, ranching, or silviculture activities to remain eligible for benefits regardless of their AGI. This ensures that growing agricultural businesses are not penalized by losing access to crucial support programs.
- Taxpayers can elect to pay capital gains tax from the sale of qualified farmland property to a qualified farmer in four equal installments. This provides cash flow relief, which can facilitate property transfers and encourage new or expanding farm operations.
