The Senate has made notable changes to the House-approved version of President Trump’s “One Big Beautiful Bill,” which cleared a crucial procedural vote late Saturday.
In this recent vote, two Republican senators—Tom Tillis from North Carolina and Rand Paul from Kentucky—were the only GOP members to dissent, resulting in a close 51-49 tally after party leadership rallied support for the massive trillion-dollar package.
This latest iteration of the bill has ballooned to 940 pages, reflecting adjustments from the narrower House approval in May. A final Senate vote on the bill is anticipated as early as Monday.
Both the Senate and House versions aim to make the tax cuts from 2017 permanent, reduce taxes on tips and overtime, enhance border security funding, and roll back the Green Energy Tax Credit implemented during the Biden administration.
However, for the bill to move forward, both chambers must reconcile their differences and seek President Trump’s approval for it to be fully enacted.
Tax Reduction
Regarding tax incentives, both versions aim for cuts totaling approximately $3.8 trillion, with some differences in specifics. For instance, the Senate allows for tip income deductions of up to $12,500, and up to $25,000 for overtime wages through 2028, while the House version does not impose such limits.
The child tax credit is set to increase from $2,000 to $2,200 per child under the Senate bill, adjusting for inflation from this year forward. On the other hand, the House version proposes a temporary boost to $2,500, which would revert to $2,000 to account for inflation later.
Another significant contrast in the Senate proposal is the permanent expansion of the standard deduction, while the House bill only allows for a temporary extension until 2028. Additionally, the tax credit for seniors is raised to $6,000 in the Senate version, compared to $4,000 in the House’s proposal.
Increase Debt Cap
The Senate version also plans to elevate the U.S. debt limit to $5 trillion, exceeding the House’s proposal of $4 trillion by 20%. A higher debt ceiling could allow Congress to avoid contentious debates on national debt and government spending for a while.
If the bill doesn’t pass, the federal government risks running out of borrowing capacity by August or September.
Food Stamp Spending Reduction
Both Senate and House versions intend to cut government spending on the Supplemental Nutrition Assistance Program (commonly known as food stamps), which assists around 40 million low-income individuals. The Senate version mandates that “healthy adults” work until age 64, with some exceptions for parents with children under 14, while the House demands that all adults, including children over six, must work to access benefits.
Furthermore, states will need to contribute more to support food assistance, with changes scheduled to take effect in 2028.
State and Local Tax Credits (Salt)
A key focus in the New York City area revolves around the SALT deduction, which caps the amount of state and local taxes that can be deducted on federal tax returns. Presently, this deduction is limited to $10,000, but both proposals would increase it to $40,000 for married couples earning up to $500,000 a year.
The Senate version plans to keep this higher cap until 2029, reverting back to $10,000 afterward, whereas the House intends for the increase to remain permanent.
Medicaid
A contentious aspect of the legislation is a proposed alteration regarding Medicaid, which provides medical assistance to low-income individuals, people with disabilities, and seniors. In the House version, childless adults would need to work 80 hours a month to qualify, while the Senate version expands this requirement to include adults with children over 15.
The Non-partisan Congressional Budget Office estimates that the House package would add $2.4 trillion to the U.S. deficit over the next decade, but it also considers the anticipated impacts of the Senate version.
