Senate passes Trump’s tax bill, sending it to House for final vote

The Senate on Tuesday narrowly approved massive tax and immigration legislation that Republicans hope will become the centerpiece of President Donald Trump’s second term, cutting taxes while axing funding for social safety net programs and undoing much of President Joe Biden’s climate law.

Vice President JD Vance cast the tiebreaking vote for the measure, which would extend trillions of dollars in tax cuts from Trump’s first term and implement new campaign promises – such as eliminating income taxes on tips and overtime wages – while spending hundreds of billions of dollars on immigration enforcement and defense.

To offset the cost, the legislation would cut about $1 trillion from Medicaid, the federal health insurance program for low-income individuals and people with disabilities, and other health care programs. It would also make reductions to SNAP, the anti-hunger Supplemental Nutrition Assistance Program, formerly known as food stamps. Nearly 12 million people will lose health care coverage if the bill becomes law, according to the nonpartisan Congressional Budget Office.

To reach the Oval Office, the bill must clear one more hurdle: the House, where many members have balked at the Senate’s changes, raising questions about whether the legislation will make it to Trump’s desk by Independence Day.

House Speaker Mike Johnson (R-Louisiana) said Tuesday that the Senate “went a little further than many of us would have preferred,” but he vowed to “get that bill over the line.”

“A lot of people didn’t get what they wanted,” Johnson said. But, he continued, “the president said it’s his bill. It’s not a House bill, it’s not a Senate bill. It’s the American people’s bill.”

Fiscal hawks in the House may take some convincing. “What’s happened is our bill has been completely changed,” said Rep. Ralph Norman (R-South Carolina), a member of the influential Rules Committee and the archconservative House Freedom Caucus. “It’s a nonstarter. This bill doesn’t do what the president wants it to do.”

The bruising battle to pass the bill split Senate Republicans, as some pressed for deeper spending reductions and others balked at the cuts to Medicaid and other programs. Lawmakers spent nearly 48 consecutive hours reading, debating and amending the legislation on the Senate floor. And in the end, three Republicans voted against the measure: Sens. Rand Paul (Kentucky), Thom Tillis (North Carolina) and Susan Collins (Maine).

“There will be a day that conservatives will rue the fact that some of them actually voted for this,” Paul said after the vote.

Tillis abruptly announced Sunday that he would not seek another term next year after voting against beginning debate on the measure – and drawing Trump’s ire online. His decision will force Republicans to defend an open seat in a swing state that Democrats are determined to pick up in the midterms.

Collins, a moderate up for re-election next year in a blue state, joined Tillis in opposing the bill, citing her concerns about Medicaid cuts. Paul, a deficit hawk, opposed it on different grounds: that it didn’t cut spending enough.

Sen. Lisa Murkowski (R-Alaska), who expressed concerns about the legislation’s Medicaid cuts, ultimately voted for it. The bill was loaded with benefits for Alaska, including a special tax break for whaling captains.

She said her decision to back the legislation was “agonizing” and described the Senate’s process as “rushed” – to the detriment of “the deliberative approach to good legislating” – to meet Trump’s “artificial timeline.”

She added that she hopes the House amends the measure to reduce the cuts to social safety net programs.

“This is probably the most difficult and agonizing legislative 24-hour period that I have encountered, and I’ve been here quite awhile, and you all know that I have a few battle scars underneath me,” Murkowski said. “But I held my head up and made sure the people of Alaska are not forgotten in this. But I think there is more that needs to be done, and I’m not done.”

To win her support, Republican leaders made last-minute concessions. The GOP doubled the value of a rural hospital bailout fund meant to ease the institutions’ adjustment to the Medicaid cuts. The agriculture portion of the bill delayed implementation of cuts to SNAP in high-poverty states. And tax writers removed a provision that would have imposed a new duty on renewable-energy systems.

“Good things are important,” Murkowski said, “but it also is important in terms of how they are paid for, and I struggled mightily with the impact on the most vulnerable in this country when you look to the Medicaid and the SNAP provisions.”

Republicans declared that their legislation would help the working-class voters who swept Trump to the White House and the GOP to unified control of Congress in November’s elections.

The bill would increase the child tax credit and add a bonus to the standard deduction for seniors, a provision inspired by Trump’s campaign pledge to stop taxing Social Security benefits. It would also create savings accounts for newborns, seeded with $1,000 of taxpayer money, and it would allow buyers of American-made cars to deduct up to $10,000 in car loan interest.

“This is delivering on President Trump’s promises. That’s the key,” said Sen. Eric Schmitt (R-Missouri).

But beyond those populist flourishes, the measure is starkly regressive. The 10 percent of households with the lowest incomes would stand to be worse off by an average of $1,600 per year because of benefits cuts, according to the Congressional Budget Office’s analysis of the House version of the bill. The 10 percent of households with the highest incomes would be better off by $12,000 on average.

The legislation would make permanent a trio of corporate tax deductions that make it easier for companies to invest in research and purchase new equipment.

Adding in the impact of Trump’s tariffs – which the White House has argued will help pay for the bill’s tax cuts and new spending – the bottom 80 percent of households would see their take-home incomes fall, according to the Yale Budget Lab.

“The right way to understand this bill is it is the largest wealth transfer from the poorest Americans to the richest Americans in modern history,” said Natasha Sarin, the Budget Lab’s president.

The nearly $170 billion in the bill to fund the Trump administration’s border and immigration crackdown would be one of the largest sums ever spent on homeland security, and an additional $160 billion would flow to the Defense Department, partially for Trump’s proposed “Golden Dome” continental missile defense system.

The new spending and lost tax revenue would force the federal government to borrow nearly $4 trillion more over the next decade, according to the congressional bookkeepers. To shove the measure through the cumbersome budget reconciliation process, the GOP weakened the Senate’s filibuster in a way that will make addressing the nation’s poor financial health more difficult.

Republicans began their tax-writing process shortly after November electoral victories with pledges to dramatically reduce government spending and annual deficits, wary of adding to a national debt that already totals more than $36 trillion.

Budget reconciliation, the process Republicans used to bypass a Democratic Senate filibuster, requires both chambers to approve a budget resolution with broad policy outlines for the bill, then to pass the legislation itself.

Would-be GOP rebels voiced debt concerns when the House took up a budget resolution in February, then again in April on an amended budget and finally in May on the tax legislation itself. Each time, they ultimately voted for the measure.

The bill also would raise the debt ceiling – a cap on how much the country can borrow to pay for spending already required by law – by $5 trillion, which Republicans hope will be enough to keep Trump from having to deal with the issue again during his presidency.

“If the economy continues to climb the way it is and our deficit reduction continues to go into effect, it could get there, but the math is going to be tough. There’s a lot of factors,” said Sen. Markwayne Mullin (R-Oklahoma), a key interlocutor between Senate leadership and House skeptics.

Paul vowed to vote against the bill because it included such a large debt limit increase, arguing that Congress should raise the limit in smaller increments to keep up the pressure to cut spending.

Senate Majority Leader John Thune (R-South Dakota) insisted that his conference had a larger appetite for deficit reduction than his House colleagues did.

Sen. Ron Johnson (R-Wisconsin) repeatedly vowed that the bill would not pass without deeper spending cuts. Instead, the Senate Finance Committee wrote a bill hundreds of billions of dollars more expensive than the House’s, and more punitive toward Medicaid.

That sent Tillis to the floor outraged with his party over he what he described as a betrayal of constituents on the federal health insurance program.

“The effect of this bill is to break a promise,” Tillis bellowed Sunday on the Senate floor.

“What do I tell 663,000 people in two years or three years,” he added, “when President Trump breaks his promise by pushing them off of Medicaid because the funding’s not there anymore?”