Senate Republicans on Monday released legislation that would cut Medicaid far more aggressively than would the House-passed bill to deliver President Trump’s domestic agenda, while also salvaging or slowing the elimination of some clean-energy tax credits, setting up a fight over their party’s marquee policy package.
The measure, released by the Senate Finance Committee, contains the core provisions of that chamber’s version of the legislation that Republicans muscled through the House last month and are hoping to speed through the Senate and deliver to Mr. Trump’s desk by July 4. But its differences with that bill are substantial and are all but certain to complicate the measure’s path to enactment, casting doubt on that timetable.
Most notably, the proposal would take a slower and less sweeping approach to phasing out clean-energy tax credits created during the Biden administration, and cover part of the cost of doing so by imposing deeper and more expansive cuts to Medicaid.
While the House measure would add a new work requirement to Medicaid for childless adults, the Senate proposal would expand its application to the parents of older children. It also would crack down even harder than the House bill on strategies that many states have developed to tax medical providers and pay them higher prices for Medicaid services.
In making the case for the bill, Republicans focused on another, far more politically popular element of the measure: its extension of tax cuts that were enacted in 2017 and are set to expire at the end of the year.
“This bill prevents an over-$4 trillion tax hike and makes the successful 2017 Trump tax cuts permanent, enabling families and businesses to save and plan for the future,” Senator Mike Crapo of Idaho, the chairman of the Finance Committee, said in a statement. “I look forward to continued coordination with our colleagues in the House and the administration to deliver President Trump’s bold economic agenda for the American people as quickly as possible.”
But the changes in the Senate bill could make final passage in the House more difficult. After pushing the bill through the House by a single vote, Speaker Mike Johnson had implored senators repeatedly not to make major changes, reminding them that he is working with narrow margins.
At least two factions of House Republicans on Monday said they were disappointed with the Senate provisions.
Senators have yet to decide how to handle the limit on the state and local tax deduction, angering House lawmakers from high-tax states who are lobbying to raise the cap, and who have demanded that senators accept the higher one they negotiated. The House-passed bill would quadruple the current $10,000 limit. The cap would shrink for people making more than $500,000.
The proposal also drew the ire of conservatives in the House who want to entirely phase out the clean-energy tax credits created by President Joseph R. Biden Jr.’s climate law.
“That’s not close to enough,” Representative Chip Roy of Texas wrote on social media, describing the measure’s attempt to balance additional Medicaid cuts against salvaging some tax credits into the next decade. The climate law “needs to be terminated as President Trump said.”
But much of the focus is likely to center on the Senate’s Medicaid work requirement. The changes add to a House bill that already made around $1 trillion in cuts to spending on federal health programs, including Medicaid and marketplaces established under Obamacare, which together the Congressional Budget Office has estimated would cause around 11 million more Americans to be uninsured in 2034.
“The Republican Senate Finance draft cuts to Medicaid are deeper and more devastating than even the Republican House’s disaster of a bill,” Senator Chuck Schumer, Democrat of New York and the minority leader, said in a statement.
Unlike the House version, the Senate bill would require adults with children over age 14 to work or volunteer at least 80 hours a month to qualify for the health insurance program. The work requirement in the House bill was already the strictest Republicans have ever proposed — estimated to cause around 5.2 million Americans to lose Medicaid coverage by the end of the decade. Adding parents to the program would likely mean a larger number of people would lose coverage.
The bill also would lower federal funding to many states that have expanded their Medicaid programs through a complicated formula adjustment. The change would limit how much states are allowed to tax certain health care providers from a cap of 6 percent to a new top rate of 3.5 percent, with the change phasing in over several years. The taxes, which are used in every state but Alaska, have allowed states to increase federal funding for their programs. They have been decried by critics as a form of “money laundering,” but the reduction would mean significant holes in state Medicaid budgets, and could result in lower payments to hospitals or other cuts to state budgets.
Like the House measure, the Senate bill would quickly end many federal tax credits for clean energy, but it phases out a few others more slowly.
Some Republican senators, including Lisa Murkowski of Alaska, Thom Tillis of North Carolina, and John Curtis of Utah, had expressed concerns that the House bill would withdraw support from energy companies too abruptly.
A lucrative tax credit for businesses that build wind and solar farms would begin rapidly winding down. Companies could qualify for the full tax break if they begin construction this year, 60 percent of the tax break if they begin in 2026 and 20 percent of the tax credit if they begin in 2027. After that, the credit would disappear.
That’s a slightly longer runway for renewable energy than allowed by the House bill, which would have ended these tax breaks almost immediately. But it is a much quicker phaseout than many clean-energy proponents had pushed for.
In another notable change, the Senate bill would preserve existing tax credits for companies that build nuclear reactors, geothermal plants, hydropower dams or battery storage through 2033. Energy Secretary Chris Wright and some companies had urged Congress to keep credits for so-called base load electricity sources that can operate at all hours, unlike wind and solar power.
Other tax breaks would end almost immediately: A $7,500 tax credit for buyers of electric cars would phase out within 180 days of the bill’s enactment. Tax credits for homeowners who install solar panels on their rooftops or install heat pumps would also end within that time frame. A subsidy for making hydrogen fuels would expire this year.
The Senate measure, like the House version, also adds new 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 certain components from China.
Many companies had complained that the House language on “foreign entities of concern” was far too restrictive, since China dominates global supply chains. While the Senate version makes numerous adjustments, industry groups said they were still reviewing the new language.
The measure looks to deliver on the president’s promises to eliminate taxes on tips and overtime pay, but would make some key tweaks. The amount that individuals could claim is capped under each, and the benefits are phased out starting at new income levels.
The House version of the legislation sought to make good on Mr. Trump’s campaign promise to eliminate taxes on Social Security benefits by instead creating a bonus $4,000 deduction available to Americans 65 and older, with the benefit shrinking at higher income levels. The Senate bill would grant them a $6,000 tax deduction.
The child tax credit is also handled differently. Senate Republicans proposed to permanently increase the credit to $2,200 per child beginning in the 2025 tax year. House Republicans had proposed to bump up the credit to $2,500, but only through 2028.
It also would grant some of businesses’s most sought-after tax deductions, including for research and development, on a permanent basis, unlike the House bill.
The provisions proposed by the Senate would increase the debt limit by $5 trillion; the House-passed bill called for lifting it by $4 trillion, a move that was expected to allow the nation to continue borrowing money through the 2026 midterm elections.
Catie Edmondson covers Congress for The Times.
Margot Sanger-Katz is a reporter covering health care policy and public health for the Upshot section of The Times.
Tony Romm is a reporter covering economic policy and the Trump administration for The Times, based in Washington.
Brad Plumer is a Times reporter who covers technology and policy efforts to address global warming.
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