The bill would fulfil many of Trump's populist campaign pledges, delivering new tax breaks on tips and car loans and boosting spending on the military and border enforcement.
It will add about $US3.8 trillion ($A5.9 trillion) to the federal government's $US36.2 trillion in debt over the next decade, according to the nonpartisan Congressional Budget Office.
What Trump called the "one, big, beautiful bill" passed in a 215-214 vote, with all of the chamber's Democrats and two Republicans voting against it. A third Republican voted "present".
The package must also win approval in the Republican-controlled Senate before Trump can sign it into law.
The vote early on Thursday came after a marathon push that kept lawmakers debating the bill through two successive nights.
The 1000-page legislation would extend corporate and individual tax cuts passed in 2017 during Trump's first term in office, cancel many green-energy incentives passed by Democratic former President Joe Biden and tighten eligibility for health and food programs for the poor.
It also would fund Trump's crackdown on immigration, creating the capacity to deport up to one million people each year.
The bill passed despite growing concerns over the US debt, which has reached 124 per cent of GDP, prompted a downgrade of the United States' top-notch credit rating by Moody's last week.
The US government has recorded budget deficits every year of this century, under Republican and Democratic administrations alike.
Interest payments accounted for one out of every eight dollars spent by the US government in 2024, more than the amount spent on the military, according to the CBO.
That share is due to grow to one out of every six dollars over the next 10 years as an ageing population pushes up the government's health and pension costs, even if Trump's budget bill is not taken into account.
Investors, unnerved by the US's fiscal standing and Trump's erratic tariff moves, are increasingly selling the dollar and other US assets that make up the bedrock of the global financial system.
"We're not rearranging deck chairs on the Titanic tonight. We're putting coal in the boiler and setting a course for the iceberg," said representative Thomas Massie, one of the two Republicans to vote against the bill.
Republican supporters of the bill had argued that failure to pass it would have raised taxes for many American households.
They also plan to use the bill to raise the federal government's debt ceiling, a step Congress must take by summer or risk triggering a devastating default.
"The success of the country depends on it," Republican representative Stephanie Bice said on Wednesday.
"These are pro-growth objectives that the president's very in favour of, and so we're moving forward."
With a narrow 220-212 majority, House Speaker Mike Johnson could not afford to lose more than a handful of votes from his side.
The Senate, where Republicans hold a 53-47 majority, is not expected to take the bill up until early June and might face significant changes before it's passed.
