The Senate Finance Committee late Monday afternoon released the long-awaited text for its portion of the Republican budget reconciliation bill, including key changes to thorny elements of the House version of the legislation that could upset the delicate balance GOP leaders need to pass the package.
The 549-page bill calls for:
* Steeper Medicaid cuts than in the House plan. “Republican senators are proposing deeper cuts to Medicaid spending by lowering the provider tax that certain states are allowed to assess,” Axios reports. “For states that have adopted Medicaid expansion, it gradually lowers the provider tax from 6% to 3.5% in 2031.”
The legislation still would impose work requirements on Medicaid beneficiaries starting at age 19, but the Senate reportedly would also apply those requirements to adults with dependent children older than 14, unlike the House bill, which would exempt all adults with dependent children.
* Making various business tax provisions permanent. That includes full expensing for domestic research and development as well as new capital investments in equipment.
* A $10,000 cap on state and local tax (SALT) deductions. Blue-state moderates in the House had insisted on an increase to the $10,000 limit set by the GOP’s 2017 tax law, and they won a boost to $40,000 after weeks of negotiations. The Senate bill undoes that, restoring the $10,000 number, reportedly as a placeholder pending further negotiations — a move that some moderate House Republicans said could threaten the entire package. The House SALT Caucus includes enough members to derail the plan. “If the Senate reduces the SALT number, I will vote NO, and the bill will fail in the House,” New York Republican Rep. Mike Lawler warned.
* Tweaks to the phaseout of clean energy tax credits. The Senate plan reportedly would allow more projects to take advantage of the tax credits, which were introduced as part of the Biden-era Inflation Reduction Act, before they are eliminated. That could create problems with House hardliners who pushed to roll back the credits faster.
* A smaller increase in the Child Tax Credit. The credit would be raised from $2,000 to $2,200, less than the $2,500 in the House plan.
* A larger debt-limit increase. The Senate bill would increase the debt limit by $5 trillion, or $1 trillion more than the House-passed plan.
What’s next: This is a short week for the Senate because of the Juneteenth holiday, but Republicans are still racing to get their full package to President Trump’s desk by July 4, meaning the coming days will be key as GOP leaders work to whip the votes they need. Now that this final portion of the Senate package is out, Republicans will also have to make sure their plans comply with the Senate’s “Byrd Rule” governing what can and cannot be included in a reconciliation bill.