Republicans’ megabill to enact President Trump’s agenda began coming together this week, as a trio of committees released, debated and approved critical pieces of legislation that House leaders hope to bring to a vote as soon as next week.
It would slash taxes, while providing the biggest savings to the wealthy, and steer more money to the military and immigration enforcement, while cutting health, nutrition, education and clean energy programs to pay for it.
Major portions of the sprawling package remain unresolved, amid Republican divisions over cuts to Medicaid and details of the tax plan, among other issues. But the emerging package provides a newly detailed picture of the party’s policy priorities, as well as a road map of the sticking points that could derail what Mr. Trump calls the “big, beautiful bill.”
Republicans are pushing the package through Congress using a special process known as budget reconciliation that allows them to steer around a filibuster and win approval without a single Democratic vote. But with tiny majorities in both chambers, they can afford to lose no more than three Republican votes in both the House and Senate. The first test will come in the House, where leaders want to bring it up before Memorial Day.
Here’s a look at the bill, and the biggest remaining areas of disagreement within the party:
Cutting taxes
The bottom line: The heart of the bill is a roughly $3.8 trillion tax cut that would lock in many of the tax cuts Republicans passed in 2017, including lower marginal income rates, a larger standard deduction and a higher threshold for the estate tax, with some tweaks.
The measure also includes several new, temporary tax cuts that Mr. Trump campaigned on, including his promises not to tax tips or overtime. His pitch not to tax Social Security benefits takes the form of a bonus $4,000 deduction available to Americans over 65, with the benefit shrinking at higher income levels. Americans would also be able to deduct interest on car loans from their taxable income, though the car has to be made in the United States.
The reductions would last only through 2028, as would a $1,000 addition to the standard deduction and a $500 bonus to the child tax credit, which now maxes out at $2,000. Children born over the next four years would receive $1,000 deposited in a so-called “MAGA account” that is invested in the stock market.
Businesses would receive several tax cuts, including valuable deductions for research and investment spending, as well as a new tax break for building factories. A deduction available to the owners of many businesses would become slightly more generous and be extended indefinitely.
The bill also includes tax hikes on universities, noncitizens and some families with children. A tax on the investment income that university endowments earn would rise substantially, from 1.4 percent to as high as 21 percent. Immigrants authorized to live in the United States — but who are not citizens or green card holders — would be barred from receiving tax credits covering the cost of health insurance premiums. And tighter eligibility rules for the child tax credit would take the benefit away from roughly two million children.
The sticking points: The biggest problem for the tax plan, for now, is the state and local tax deduction. The bill would triple the current $10,000 limit on the cap to $30,000. But a group of holdout Republicans from high-tax states like New York have demanded an even higher increase to the cap, a challenging prospect for Republican leaders who also need the support of conservatives who hate the expensive tax break.
Scaling back Medicaid
The bottom line: The bill makes major changes to reduce the cost of the health insurance program for the poor and disabled. The centerpiece of those efforts is a strict work requirement for childless adults without disabilities, which would require beneficiaries to document 80 hours of work every month or prove they qualified for an exception, or else risk losing their benefits. Those new rules would not kick in until 2029, after the next presidential election.
More immediately, the legislation would make it easier for states to cancel people’s coverage by allowing them to increase paperwork requirements and drop those who don’t respond to requests to verify their income or residency. It also would require states to impose co-payments for a wide array of medical services for adults on Medicaid who live above the poverty line, a policy some Democrats described as a “sick tax.”
Another provision would reduce Medicaid funding to states that use their own tax revenues to provide health coverage to undocumented immigrants, a change that could affect financing for 12 mostly Democratically controlled states. The legislation would bar Medicaid from providing funding to Planned Parenthood as long as the organization continued to provide abortions. The committee overseeing Medicaid also approved measures that would limit strategies that states have developed to tax medical providers and pay them higher prices for Medicaid services.
Taken together with policies that would affect private Obamacare coverage, the Congressional Budget Office estimated that the legislation would cause 8.6 million more Americans to be uninsured at the end of a decade, while reducing federal spending on health care by more than $700 billion. That estimate may be updated in the coming weeks as the office continues to analyze the bill.
The sticking points: Democrats have made the Medicaid changes the main focus of their critique of the bill, arguing that Republicans are slashing health coverage for poor Americans to finance tax cuts for the rich. In an effort to insulate their most vulnerable incumbents from backlash, G.O.P. leaders omitted more substantial overhaul proposals that would have slashed the program more deeply. But one populist Republican, Senator Josh Hawley of Missouri, has called the cuts a nonstarter, saying they amount to “taxing the poor to give to the rich.” And some conservative lawmakers in the House who wanted much larger reductions say they can’t support a package with Medicaid changes that fail to restructure the program.
Ending clean energy programs
The bottom line: The bill would sharply curtail most of the big tax credits for clean energy contained in the Inflation Reduction Act of 2022. Many of those incentives were expected to last a decade and have so far led businesses to announce more than $841 billion in investments, from wind farms in Wyoming to battery factories in Georgia.
Among the major changes: A $7,500 tax break for buyers of electric cars would largely phase out by the end of 2025, with a one-year extension for automakers that have not sold many models yet. Tax credits for low-emissions electricity sources like wind, solar, nuclear and geothermal power would be available in full only to power plants in service before the end of 2028, and then would zero out within three years. A credit for making hydrogen fuels would end this year.
The bill would also impose new “foreign entity of concern” restrictions on tax breaks for both power plants and factories that build solar panels, batteries or other low-carbon technologies by disqualifying companies that use components from China. That’s a steep hurdle, since China dominates global supply chains. The bill would also end by 2028 a practice that allowed smaller firms with little tax liability to claim the credits and sell them for cash, making the incentives more widely accessible.
Not all energy sources were affected. A tax credit for biofuels, which is popular in farm states, received a four-year extension in the bill. And a credit for capturing carbon dioxide from polluting facilities and burying it underground, which is backed by oil and gas companies, was mostly kept intact.
Other portions of the bill would expedite federal approvals for oil and gas projects in exchange for up to $10 million in fees, scrap Biden-era rules on tailpipe pollution from cars and trucks and repeal an E.P.A. program aimed at curbing methane leaks from oil and gas operations. The legislation also pulls back unspent funds from the Energy Department’s Loan Programs Office, which has nearly $400 billion in lending authority for emerging technologies.
The sticking points: Slashing the energy credits has been contentious even among Republicans, since more than three-quarters of the investments driven by the Inflation Reduction Act have occurred in red districts. At least three dozen Republicans in the House and four in the Senate have spoken out in favor of preserving at least some of the incentives, such as for nuclear power or domestic manufacturing, to protect jobs and bolster U.S. energy security.
Slashing food stamps
The bottom line: In a bid to save money and restrict benefits, the bill would make a series of changes to scale back the Supplemental Nutrition Assistance Program, or SNAP, which provides monthly aid known as food stamps to about 42 million low-income people.
Under the proposal, food stamp recipients between the ages of 18 and 64 would have to obtain work in order to receive federal aid. That mandate would also apply to parents with children older than age 7. Current law subjects only beneficiaries up to age 54 to work requirements, and carves out parents with dependents.
Additionally, the bill would force states to shoulder some of the costs of SNAP, which historically has been funded by the federal government. It would limit the ability of future administrations to raise food stamp benefit amounts. And SNAP would be restricted to U.S. citizens and lawful permanent residents.
By Wednesday, the nonpartisan Congressional Budget Office had not released an analysis about the full effects of these and other changes. Past reports about similar proposals have found that strict work requirements could result in millions of food stamp recipients losing access to benefits.
The sticking points: Some Republicans from districts with high concentrations of food stamp recipients have balked in the past at cuts to the program, and insisted on allowing states to relax work requirements, which the bill would limit their ability to do. But so far, there has been no outcry in the G.O.P. against the SNAP cuts.
Boosting national security and immigration enforcement
The bottom line: The plan would devote an additional $150 billion in military spending, to help boost shipbuilding efforts, and to build a new space-based missile defense system Mr. Trump has proposed that the military is calling Golden Dome.
It also includes about $175 billion in new spending to enforce Mr. Trump’s ambitious anti-immigration agenda, including for bulking up the barriers at the nation’s southern border and for additional Border Patrol agents and facilities. Those measures are considered the least controversial in the legislative package and are meant to entice Republicans to vote for it.
Cutting education programs
The bottom line: The bill would slice $330 billion out of education spending over a decade. The biggest change would eliminate for new borrowers the Biden-era student loan repayment program known as SAVE — which ties loan payments to income and household size — as well as the Pay As You Earn plan and the Income-Contingent Repayment plan.
It would replace those with other, more costly repayment plans.
The bill also would make it more difficult for students to obtain Pell Grants, increasing the number of credits per semester required for the maximum award from 12 to 15, and requiring them to be enrolled at least half of the time to qualify at all.
Raising the debt ceiling
The bottom line: The legislation would increase the nation’s statutory debt limit by $4 trillion. Treasury Secretary Scott Bessent said earlier this month that the United States could run out of money to pay its bills by August if Congress does not raise or suspend the nation’s debt limit.
Many ultraconservative Republicans have long prided themselves on refusing to back any increase to the nation’s borrowing cap, and refused to do so in December even at Mr. Trump’s urging. But some have conceded they would rather raise the debt limit through the reconciliation bill — which allows them to pass legislation without a single Democratic vote — to deprive the minority party of any negotiating leverage.
Margot Sanger-Katz is a reporter covering health care policy and public health for the Upshot section of The Times.
Andrew Duehren covers tax policy for The Times from Washington.
Brad Plumer is a Times reporter who covers technology and policy efforts to address global warming.
Tony Romm is a reporter covering economic policy and the Trump administration for The Times, based in Washington.
Catie Edmondson covers Congress for The Times.
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