Speaker of the House Mike Johnson, R-La., speaks at a press conference at the U.S. Capitol on June 4.
Kevin Dietsch/Getty Images
Republican lawmakers on Capitol Hill are in the final stages of getting massive legislation containing much of President Trump’s domestic agenda through Congress.
By a vote of 51-50, the Senate narrowly passed the bill on Tuesday, with Vice President JD Vance casting the tie breaking vote. Now, the fate of the bill rests in the House of Representatives.
The House passed an initial version of the bill in late May, but the Senate has since made changes, and House members will need to agree on the latest bill before it can head to the president’s desk.
Republicans in both chambers agree on the legislation’s key pillars, including an extension of President Trump’s 2017 tax cuts as well as increased funding for border security, defense and energy production.
However, deep disagreements remain over how to pay for those policies, and some of the changes in the Senate-passed bill may prove challenging for some House Republicans to rally behind. Notably, the Senate bill includes a higher increase to the debt limit and additional cuts to Medicaid, the joint federal/state program that provides health care for low-income, elderly and disabled Americans.
Multiple House Republicans have already expressed concern with parts of the Senate bill, which could be a problem for House Speaker Mike Johnson, R-La., who is working with a razor thin majority and can’t afford many defections if lawmakers want to get the bill to Trump’s desk by a self-imposed July 4th deadline.
As House Republicans inch closer to a final vote, here’s a quick look at some of the changes made by Senate Republicans to the original House bill.
Congressional Republicans have included many of the president’s tax-related campaign promises in the bill. The Senate’s text includes temporary changes that would allow Americans to deduct up to $25,000 for tip wages and $12,500 for overtime pay through 2028. The Senate version also says that overtime and tip deductions will be reduced for Americans with incomes higher than $150,000. Those limits were not included in the House version.
The Senate bill also increases the child tax credit from $2,000 to $2,200 per child and adjusts the amount for inflation after 2025. That’s slightly different than the House plan to temporarily increase the credit to $2,500 before cutting it back to the current level and adjusting for inflation.
In addition, the Senate text would permanently expand the standard deduction, marking a key difference from the House bill, which temporarily expands it through 2028. Senators also boosted a tax deduction for people over 65 to $6,000 through 2028, compared to $4,000 in the House bill. Both chambers included a phase out for people earning over $75,000.
The Senate plan would lift the nation’s debt limit by $5 trillion, a sizable increase compared to the House bill, which agreed to $4 trillion.
Lifting the debt limit doesn’t authorize new spending. Instead, it allows the government to pay for programs that Congress has already authorized. If the cap isn’t lifted and the government can’t meet its obligations, then it will be at risk of default — a scenario that economists say would be catastrophic not just for the U.S., but the global financial system as a whole. An estimate from the nonpartisan Congressional Budget Office found that without action from Congress, the U.S. will run out of money to pay its bills at some point between mid-August and the end of September.
Earlier this month, 38 members signed onto a letter addressed to Senate Majority Leader John Thune, R-S.D., criticizing the size of the increase.
Both the Senate and House outlined reforms for the Supplemental Nutrition Assistance Program, known as SNAP, which provides aid for food to more than 40 million low-income Americans.
The Senate bill includes expanded work requirements that “able bodied adults” continue to work up to age 64. There are exemptions for parents with children under 14 and limits on the ways states can offer waivers for those requirements.
The bill would also force states to take on a greater share of the cost of providing food assistance. The amount a state owes would be based on a formula set by the percentage of erroneous payments reported each year. Those changes would go into effect in 2028.
One of the thorniest issues during negotiations has been the state and local tax deduction, also known as SALT. The deduction is particularly important to a small number of GOP lawmakers in the House from blue states with high taxes, such as California and New York. Trump’s 2017 tax cuts capped the SALT deduction at $10,000. The Senate plan would temporarily lift the cap to $40,000 for married couples with incomes up to $500,000. But that provision would expire after 2028 — an effort to buoy the blue-state Republicans through the 2026 midterm and 2028 election cycles, while limiting the long-term impact of the cuts on federal tax revenue.
Changes to Medicaid have remained one of the most divisive issues throughout both House and Senate negotiations.
The Senate plan would require able bodied adults to work 80 hours per month until age 65 to qualify for benefits. There are carve outs for parents of children under 14 and those with disabilities. But even with those exceptions, the bill’s cuts could lead to nearly 12 million people losing health coverage, according to estimates from the CBO.
The plan would also cap and gradually reduce the tax states can impose on Medicaid providers. The phase out would begin in 2028, ultimately ending in a 3.5% cap on that tax. It’s a change that some GOP Senators expressed concern with, arguing the tax is a critical funding stream for rural hospitals in particular, and cutting it could put many of these hospitals at risk of closing.
In an effort to alleviate some of those concerns, Senate GOP leaders included a new $50 billion fund to support rural hospitals. That program would also begin in 2028 and funds would be spread out over five years.
