WASHINGTON – President Donald Trump has declared, “NO ONE GOES ON VACATION” until his ambitious bill lands on his desk by the Fourth of July. Congressional Republicans are working tirelessly to meet this deadline.
Immediate Impact
The Senate is preparing for a weekend of intense negotiations, while House Speaker Mike Johnson has urged lawmakers to keep their schedules “flexible” for upcoming votes. Senate Majority Leader John Thune, R-S.D., expressed optimism, stating that the Senate is likely to pass the bill by week’s end, sending it back to the House for swift action.
Key Details Emerge
The bill aims to avert a projected $3.8 trillion tax hike by making permanent the tax cuts introduced during Trump’s first term. Additionally, it proposes new tax breaks such as no taxes on tips, overtime pay, and certain automotive loans. The Senate draft also includes a larger $6,000 deduction for seniors earning under $75,000 annually.
Middle income taxpayers would benefit from a tax break of $500 to $1,500, according to the Congressional Budget Office (CBO).
Provisions for Families
The Senate version proposes increasing the child tax credit from $2,000 to $2,200, while the House suggests a $2,500 credit. However, lower-income families might not receive the full benefit. A contentious issue is the proposed $40,000 cap on state and local tax deductions, which some GOP senators argue is excessive.
By the Numbers
The CBO estimates that the bill would cost the poorest Americans $1,600 annually, while the wealthiest households would see a $12,000 increase in deductions.
Funding Trump’s Agenda
The package allocates $350 billion for Trump’s border and national security initiatives, including the largest deportation operation in U.S. history. It proposes hiring 10,000 new ICE officers and creating 100,000 immigration detention beds, aiming to deport one million individuals annually.
Additional Security Measures
The bill also funds Trump’s “Golden Dome” missile defense system and seeks to establish a “National Garden of American Heroes.”
How to Pay for It?
To offset the tax cuts, the bill proposes cuts to Medicaid, SNAP, and green energy programs, unraveling policies from previous Democratic administrations. Republicans argue these cuts are necessary to eliminate waste and refocus the programs on their original beneficiaries.
80 million Americans rely on Medicaid, and 40 million on SNAP, with most already employed, according to analysts.
Proposed Program Changes
The bill introduces new work requirements for Medicaid and SNAP recipients, which House Speaker Johnson claims are “wildly popular.” However, the Senate parliamentarian has questioned some proposed SNAP cuts, prompting revisions.
What Comes Next
As the Senate and House work towards a consensus, key Republican senators warn that cuts to Medicaid could harm rural hospitals. A new rural hospital fund is under consideration, but details remain unresolved.
Green Energy Rollbacks
Both chambers propose significant reductions in Biden-era green energy tax incentives, potentially saving $1.5 trillion. These cuts target electric vehicle credits and renewable energy project incentives.
Background Context
The bill’s estimated cost is $3.8 trillion over ten years, with spending cuts providing $1.5 trillion in savings. The CBO projects the House version would increase the national deficit by $2.4 trillion, though Senate Republicans argue that existing tax breaks should not be counted as new costs.
Senate Republicans propose a $441 billion cost for tax provisions, while the Committee for a Responsible Federal Budget estimates $4.2 trillion over a decade.
Expert Analysis
Sen. Jeff Merkley criticized the Senate’s approach as “magic math,” arguing that it obscures the bill’s true cost. Meanwhile, Trump, en route to a NATO meeting in Europe, has urged senators to remain locked in negotiations until the bill is finalized.
The legislative process continues as lawmakers strive to reconcile these differences, with potential long-term implications for the nation’s fiscal policy and social programs.
Associated Press writers Darlene Superville and Mary Clare Jalonick contributed to this report.
