The OBBA: For Businesses, Investors, and Your Finances

September 16, 2025

The recently passed One Big Beautiful Bill Act (OBBBA) is one of the most sweeping pieces of economic legislation in years. While headlines tend to focus on household tax cuts, the ripple effects extend far beyond. This bill reshapes federal spending, revives major business tax incentives, and adds trillions to the national deficit—changes that will affect businesses, investors, and financial markets for decades to come.

Shifts in Federal Spending Priorities

The OBBBA redirects hundreds of billions in federal dollars. About $170 billion is earmarked for border security and another $150 billion for defense, highlighting national security as a top priority. But these gains come at a cost: reduced funding for Medicaid, SNAP, and clean energy programs.

This reallocation has clear winners and losers. Defense contractors and fossil fuel producers stand to benefit, while renewable energy companies face headwinds after years of strong federal support. Healthcare providers, particularly rural hospitals, may also feel the strain from a projected $1 trillion reduction in federal healthcare spending over the next decade.

From a fiscal perspective, spending cuts don’t fully offset the revenue lost through permanent tax breaks. With U.S. deficits already elevated, ratings agencies are warning of further credit downgrades—potentially pushing long-term borrowing costs higher.

Tax Incentives for Businesses

One of the most significant impacts of the OBBBA is its restoration of 100% bonus depreciation for qualifying assets placed in service after January 19, 2025. This allows businesses to fully deduct certain capital investments in the first year rather than spreading deductions over time.

A new category, Qualified Production Property (QPP), also allows companies to expense equipment and certain types of real property tied to manufacturing and industrial expansion. Although temporary—construction must begin before 2031—this provision is designed to jumpstart investment in U.S.-based production.

Other highlights include:

●     Section 179 expensing limit doubled: Businesses can now deduct up to $2.5 million in assets (phasing out at $4 million).

●     R&D costs expensed immediately: No more five-year amortization for domestic research expenses. Small firms may even claim retroactive benefits back to 2022.

These measures strengthen cash flow and encourage investment across a wide range of industries.

The QBI Deduction Made Permanent

For small businesses, one of the most impactful changes is the permanent extension of the 20% Qualified Business Income (QBI) deduction. Previously set to expire in 2025, this deduction is now a long-term fixture for pass-through entities such as partnerships, LLCs, and sole proprietorships.

This permanence provides clarity for millions of business owners, although income phase-outs and service-business restrictions still apply.

Rising Deficits and Debt Levels

The Congressional Budget Office estimates the OBBBA will add $3.3 trillion to deficits over the next decade—a figure that rises closer to $4 trillion once interest costs are factored in. To accommodate this, the debt ceiling has been lifted by $5 trillion. By 2034, the national debt could reach as much as 130% of GDP, surpassing levels seen after World War II.

Larger deficits mean heavier reliance on borrowing, which in turn could keep Treasury yields elevated and increase financing costs for businesses and households alike.

Market and Economic Implications

The OBBBA sends mixed signals to markets. On one hand, permanent tax breaks and bonus depreciation should support corporate earnings and investment. On the other, reduced safety net spending, higher tariffs, and tighter immigration policies could fuel inflation, forcing the Federal Reserve to keep interest rates higher for longer.

Investors should be prepared for:

●     Opportunities in technology, manufacturing, and defense.

●     Headwinds for healthcare providers and consumer staples reliant on discretionary household spending.

●     A market environment where diversification beyond U.S. large-cap growth may provide better balance.

Balancing Opportunity and Risk

The OBBBA delivers powerful incentives for business growth, but it also raises significant long-term fiscal challenges. For clients, success will come from a dual approach:

●     Seizing tax and investment opportunities created by the new law.

●     Preparing portfolios for higher interest rates, shifting sector dynamics, and increased volatility.

As always, thoughtful planning and diversification are the best tools to navigate this evolving landscape.

Sources:

Taylor, Debra. “The OBBBA's Business, Fiscal and Market Impacts." www.horsesmouth.com. 15 Sept. 2025. https://www.horsesmouth.com/the-obbbas-business-fiscal-and-market-impacts. Accessed on 15 Sept 2025.

Disclosure:

This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.

This material is provided as a courtesy and for educational purposes only.

These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your