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Senate Passes Trump’s Tax and Spending Bill, Moving Closer to Final Approval
Republican lawmakers progress on significant legislation aimed at tax cuts and immigration measures.
Key Highlights:
- Legislation includes tax breaks and funding for immigration initiatives.
- The bill will return to the House of Representatives for final approval.
- Republicans maintain a slim 220-212 majority in the House.
On Tuesday, the Republican-led U.S. Senate approved a comprehensive tax and spending legislation pushed by President Donald Trump, affirming a significant package that aims to solidify many of his key objectives into law—despite a projected $3.3 trillion increase in the national debt.
The bill is now set to return to the House for its last endorsement. Trump is advocating for the legislation to reach his desk ahead of the July 4th Independence Day celebrations.
Navigating a narrow margin, Republicans managed to pass the 940-page bill amid Democratic opposition, affording them only a three-vote cushion in both chambers. Debates on specific tax breaks and health care initiatives have sparked concerns about significant impacts on various sectors and potential loss of coverage for millions.
Despite these challenges, Republicans displayed considerable unity, with only three of the Senate’s 53 GOP members siding with Democrats against the measure, resulting in a tight 51-50 vote—a decision determined by Vice President JD Vance’s tie-breaking vote.
The upcoming House vote is expected to be similarly contentious, given the close 220-212 Republican majority.
Concerns Over Fiscal Responsibility
The earlier version of the bill barely passed in May, with only two votes to spare. Several House Republicans have expressed skepticism regarding the Senate’s version, which the nonpartisan Congressional Budget Office projects will add $800 billion more to the national debt compared to the House iteration.
The House Freedom Caucus—a coalition of hardline conservatives—has insisted on further expenditure restrictions beyond what the Senate has proposed. They highlighted, “The Senate’s version adds $651 billion to the deficit before interest costs, which will almost double that total. This isn’t fiscal responsibility; it’s not what we agreed upon.”
Moderate House Republicans, particularly those representing lower-income districts, have voiced objections to the more significant Medicaid cuts included in the Senate’s framework. Representative David Valadao from California declared during the weekend discussions, “I cannot support a bill that eliminates crucial funding that our hospitals depend on.”
Nevertheless, pressure from the Trump administration is anticipated to mount on House Republicans to support the overarching bill in the coming days.
Provisions in the Controversial Bill
Dubbed the "One Big Beautiful Bill Act," this legislation would permanently extend Trump’s 2017 tax reductions for businesses and individuals, set to expire at year’s end, while introducing new tax breaks for tipped income, overtime, and senior citizens—campaign promises made during the 2024 election. It allocates substantial funds for immigration enforcement and seeks to dismantle numerous green-energy incentives set forth by Democratic President Joe Biden.
Analysts indicate that the bill would restrict access to food and health safety net programs, effectively reducing income for lower-income Americans who will face higher costs for these essential services.
The CBO further estimates that this latest version of the bill would contribute an alarming $3.3 trillion to the existing $36.2 trillion national debt—seen as a wealth transfer from younger to older generations, impacting economic growth and heightened borrowing costs.
Additionally, the legislation proposes to raise the country’s borrowing limit by $5 trillion, averting a debt default this summer, which could lead to economic instability.
While GOP members contest the CBO’s cost assessments, foreign investors are increasingly considering diversifying out of U.S. Treasuries as deficits expand.
Republicans assert that the package intends to bolster families and small businesses while moving benefit programs like Medicaid onto a more sustainable trajectory. Nonetheless, divisions remain over the funding structure for Medicaid and a crucial state and local tax deduction that appeals to House Republicans from high-tax regions like New York, New Jersey, and California. There are also fears that tightening funding for Medicaid could result in diminished services in rural locations.
Some factions within the party are advocating for more aggressive cuts to Medicare to alleviate the budgetary consequences.
Trump has particularly targeted dissenting Republicans via his Truth Social platform, often excluding them from White House engagements. Few are prepared to resist him since his return to the presidency in January, with Senator Thom Tillis of North Carolina—one of the three GOP senators who opposed this measure—having announced he will not seek re-election next year.
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