The Senate Finance Committee released its version of President Donald Trump’s “Big, Beautiful” tax and budget bill, which appears dead on arrival in both the Senate and House. Republicans in the committee made key changes to Medicaid, state and local tax deductions, and child tax credits, each of which could cause the package to lose support.
“Consider this the response to the Senate’s ‘negotiating mark’: DEAD ON ARRIVAL,” Rep. Mike Lawler, R-N.Y., posted on X.
Tax deductions
Lawler led a group of Republicans from high-tax blue states in negotiating an increase in the state and local tax deduction, or SALT, from $10,000 to $40,000. The Senate’s version lowered it back to $10,000.
The bill changes the child tax credit from $2,500 per child in the House bill to $2,200. Both are an increase from the current $2,000.
Sen. Josh Hawley, R-Mo., has said he wants to increase the credit to $5,000 per child and allow parents to receive it in installments throughout the year, not just as a refund during tax season.
Medicaid changes
Hawley has also spoken out against changes to Medicaid, which this bill includes. The Senate version lowers the Medicaid provider tax from the current 6% to 3.5% by 2031. The House did not lower the tax but did block states from raising it.
Medicaid provider taxes help states fund their programs. Medicaid has a state-federal cost share, and states tax Medicaid health providers to raise a portion of their share. As long as the state meets certain criteria, the federal government will match what the state pays using the funds raised through the tax.
The bill also increases Medicaid work requirements to include those with dependent children over 14 years old.
Sens. Hawley, Susan Collins, R-Maine, Jerry Moran, R-Kan., and Lisa Murkowski, R-Alaska, have previously stated they would not support further cuts to Medicaid or work requirement expansions.
Raising the deficit
The Senate version may also increase the deficit over the next 10 years by $5 trillion, instead of the $4 trillion increase from the House version. While the final number is still being calculated, any increase could lead fiscal hawks like Sens. Rand Paul, R-Ky., and Ron Johnson, R-Wis., to vote no.
Johnson told multiple reporters on Capitol Hill that he is a “no” on the newly released bill and will need to see significant changes to support it.
Each of these votes matters because they can only lose three in both the House and Senate to get it approved. The House passed its version by a single vote in May. If they lose three votes in the Senate, Vice President JD Vance will have to be the tiebreaker.
The White House is trying to add pressure to not only get it done, but do it soon.
“IT’S CALLED THE ONE BIG BEAUTIFUL BILL — and there’s never been a more critical moment to get it to President Trump’s desk and signed into law. The American people can’t wait any longer,” the White House posted on X.
For now, the bill will get what is called a “Byrd bath.” The Senate parliamentarian will go through each section to make sure the provisions are directly related to the federal budget. Any that are not will be removed.
Republicans are passing this bill through budget reconciliation, which allows them to pass legislation with a simple majority in both chambers. The process can only be used for making alterations to current federal spending; otherwise, it has to go through the normal legislative process and is subject to a Senate filibuster.
contributed to this report.