Key Details of the Proposed Legislation
The U.S. Senate Republicans have released their version of President Donald Trump’s extensive tax cuts and spending reduction bill, paving the way for an initial vote on Saturday that could lead to a marathon weekend session and full Congressional approval by the following week.
The 940-page bill, published late Friday, would expand on the 2017 tax cuts that were Trump’s primary legislative achievement during his first term, further reduce taxes, and boost military and border security spending.
Impact on National Debt
Nonpartisan analysts estimate that a version passed by the House last month would add approximately $3 trillion to the nation’s $26.2 trillion public debt.
Trump’s Push for Timely Approval
President Trump has been pushing Congress to approve the bill before Independence Day, July 4th. The White House stated earlier this month that the legislation, titled “One Big Beautiful Bill Act,” would reduce the annual deficit by $1.4 trillion.
Contentious Provisions
Senate Republicans have been deeply divided over plans to partially offset the bill’s strong impact on the deficit, including cuts to the Medicaid health insurance program for low-income Americans.
Republican senators from states with large rural populations have opposed reducing state tax revenues for Medicaid providers, including rural hospitals. The new legislation postpones this reduction and includes $25 billion to support rural Medicaid providers from 2028 to 2032.
The bill raises the federal tax deduction cap for state and local taxes to $40,000, with an annual adjustment of 1% inflation until 2029, after which it will revert to the current $10,000. The bill also gradually reduces the limit for those earning more than $500,000 annually.
Republican Maneuvering in the Senate
Due to their narrow margins in both the Senate and House, Republicans cannot afford more than three defections in either chamber to pass legislation opposed by Democrats, who argue that the bill disproportionately benefits high-income Americans at the expense of low- and middle-income individuals.
So far, one Republican in each chamber has opposed the bill from the start. Although a handful of Republicans from both chambers have voiced opposition to some bill elements, this Congress has not yet rejected any of Trump’s legislative priorities.
Democratic Response
Democrats will focus their efforts on amendments aimed at reversing Republican spending cuts to government-backed healthcare programs for the elderly, poor, and disabled, as well as food assistance for low-income families.
Senate Democratic Leader Chuck Schumer summarized his party’s opposition to the bill in a press conference on Friday, stating that it contains “the largest cuts to food assistance in history” and could cause over 2 million people to lose their jobs. He also highlighted the Republican rollback of Biden administration clean energy initiatives.
Senate Majority Leader John Thune emphasized tax cuts in a speech on Friday, stating that “the cornerstone of our bill is permanent tax relief for the American people.” He claimed this measure would “help get our economy back to full speed.”
The bill would also raise the legal limit on Treasury Department borrowing by trillions of dollars to prevent a default on its debt in the coming months.
Next Steps
If the Senate successfully passes Trump’s primary legislative goal early next week, the House could quickly approve it and send it to Trump for signature, turning it into law.
