Though the majority of Senate Republicans left a closed-door briefing on newly released provisions in the Senate Finance Committee’s portion of President Donald Trump’s megabill to fund his second-term agenda, enough are raising major concerns that might mean a tricky path forward for the legislation.
Senate Majority Leader John Thune can afford to lose only three Republican senators when Trump’s “big, beautiful bill goes to the Senate floor.
Right now, there are not three who are expressly stating that they’ll vote against the package, but there are at least that many who are raising very serious concerns about the bill, calling into question whether the massive package will have the support it needs to pass the Senate.
Sen. Ron Johnson, a deficit hawk who has long been critical of the spending in the bill, said he’s not supporting it “at this point.”
“We’re not doing anything to significantly alter the course of the past and future in this country,” he said, noting that when the Congressional Budget Office report comes out later this week, “you’ll just see why I’m not particularly uplifting” on the legislation.
“There are many good things about what the House is doing,” he added. “The problem is it just simply doesn’t meet the moment.”
Johnson also insisted the bill would not get to Trump’s desk by Republicans’ July Fourth deadline.
“No, not by July. No way. We haven’t had the discussions we need,” he said.
Sen. Josh Hawley said he was “alarmed” by what he heard in the meeting. His biggest concern is the way that Medicaid changes to provider taxes could harm rural hospitals in Missouri.
“This is a whole new system that is going to defund rural hospitals effectively in order to what? Pay for solar panels in China? I mean, this needs a lot of work, in my view,” he said.
Sen. Rick Scott said while he’s optimistic about the bill, he has serious concerns about the provider tax provisions.
“I’m an optimist, OK, that we’re all going to be able to come together and we’ll get some fiscal sanity and we will also make sure that states like mine that didn’t expand their Medicaid are not treated unfairly,” Scott said.
Sen. Rand Paul is also expected to oppose the legislation because of language that would raise the federal debt limit by $5 trillion.
In spite of those objections, the majority of Senate Republicans appeared optimistic about the state of the bill.
Sen. Steve Daines remained optimistic about Thune’s ability to get the bill across the finish line.
“He’s delivered every time he’s needed to, whether it’s on budget resolutions, reconciliation bill, yearlong [continuing resolutions] — he’s batting a thousand,” Daines said. “It’s always difficult, but he’s delivering it. I wouldn’t, I wouldn’t bet against him right now.”
Republicans are using a legislative procedure called reconciliation, which is limited it to taxes and spending, to try to get the bill passed with a simple majority. But House Speaker Mike Johnson has warned the Senate to make minimal changes to the bill to ensure it can pass, given the razor-thin margin in the lower chamber.
There are also a number of senators who have conditioned their support for the bill on certain proposals in the Senate version.
Here are potential sticking points in the legislation:
State and local taxes cap
The Senate legislation as drafted would keep the cap on state and local tax (SALT) deductions at $10,000 a year, while the House bill offers deductions up to $40,000 per year for those making less than $500,000 annually.
Some House Republicans have said they will vote no on the final bill if the deduction is any lower than the $40,000 they painstakingly negotiated.
Senators have said the $10,000 cap is currently just a placeholder, is not finalized, and is still being negotiated. Including a value allows the nonpartisan Congressional Budget Office to begin scoring the bill, but senators say the score could be modified as the SALT cap changes.
Sen. Markwayne Mullin, who has been a key negotiator with House Republicans over SALT, was actively in talks with one hardline House SALT Republican, Rep. Mike Lawler, who said after the Senate Finance Committee text dropped on Monday that he wouldn’t back the bill should it be sent to the House with its current changes.
“I talked to Mike about it. Yeah, we understand it. We’re in a …” he paused, “place,” Mullin said.
Medicaid
Similar to the House’s version, the Senate bill implements work requirements on Medicaid for “able bodied adults who are choosing not to work and do not have dependent children or elderly parents in their care.”
It also increases the frequency of eligibility verifications for able-bodied adults.
Able-bodied adults without dependents can work, participate in a work training program, enroll in school, or volunteer for 20 hours per week in order to receive taxpayer-subsidized Medicaid coverage.
It also ends taxpayer-funded Medicaid payments for abortion services and gender transition procedures and ensures immigrants lacking permanent legal status do not receive Medicaid benefits.
The biggest difference between the House and Senate plans to reduce “waste, fraud, and abuse” in Medicaid involve the provider tax, a state-imposed tax on health care providers used primarily used to help finance state Medicaid programs. Beginning in 2027, the Senate legislation would lower health care provider taxes in states that chose to expand Medicaid to 3.5%, down from 6% in the House bill, which means the burden on states to fund Medicaid could be higher under the Senate’s version.
Taxes
The Senate’s version permanently extends the Trump 2017 tax cuts, something Senate Republicans say is essential for businesses and families looking to plan for the future.
It also includes no tax on tips and no tax on overtime, a key Trump priority. The bill allows for deductions of up to $25,000 in qualified tips, and deductions of up to $12,500 in overtime. Meanwhile, the House’s version has no explicit cap on tips and overtime deductions.
The Senate’s bill would also offer seniors a new $6,000 tax deduction — more generous than the $4,000 deduction in the House version.
It would also make permanent various business and other tax incentives, including expensing of investments in equipment and research and development.
Child tax credit
The Senate bill pares back the child tax credit from $2,500 in the House version to $2,200 per child. Like the House, it excludes families with no income.
The bill also establishes savings accounts for newborns, similar to the House bill.
Debt limit
The Senate package includes a $5 trillion hike to the federal debt limit, higher than the House’s $4 trillion. Congress must act before early fall to raise the debt limit or risk default.
Phasing out of IRA tax credits
The Senate version phases out solar energy tax credits that were part of the Inflation Reduction Act at a slower rate than the House version by allowing more projects to access the credits before they end.
The Senate bill also eliminates hundreds of billions of dollars of IRA subsidies, such as immediately ending the electric vehicle tax credit and its “lease loophole,” similar to the House bill.
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