The House reconciliation bill, now officially called “One Big Beautiful Bill,” passed by a vote of 215-214 prior to the Memorial Day recess. It is intended to implement President Trump’s domestic agenda by extending expiring tax cuts; removing taxes on tips and overtime pay; increasing funding for border security, including continued construction of a border wall, and enhanced military funding, including a golden dome satellite defense system. In addition, the bill cuts spending on Medicaid, food aid, higher education and clean energy investments to pay for these new initiatives and to reduce overall federal expenditures. According to Congressional Budget Office estimates, however, the bill is expected to increase budget deficits by $3.3 trillion by 2034, compared with doing nothing, though a final official estimate is not yet available. Also included in the bill is a $4 billion increase in the debt ceiling over the next two years.
Now the legislation moves on to the Senate where GOP senators are calling for a rewrite of the bill to address concerns ranging from Medicaid reforms and the phaseout of clean energy incentives to the sale of government-owned spectrum bands and the bill’s projected impact on the federal debt. The biggest obstacle may be the threatened opposition from Senate conservatives who say the bill doesn’t do nearly enough to cut future deficits. Kentucky Sen. Rand Paul (R) immediately announced his opposition to the House-passed bill, vowing to vote against it unless Senate Republican leaders remove the provision to raise the federal debt limit.
A group of Senate Republicans concerned about Medicaid reforms pose another major obstacle to the bill. This group includes Sens. Josh Hawley (R-Mo.), Susan Collins (R-Maine), Lisa Murkowski (R-Alaska) and Jerry Moran (R-Kan.). In addition a provision in the bill to increase the cap on deducting state and local taxes (SALT) from $10,000 to $40,000 does not sit well with another group of Republican senators.
Speaker Mike Johnson (R-LA) has urged the Senate to not tinker with the House bill as it was a finely tuned compromise among the various Republican factions. However, Majority Leader Thune (R-SD) says Senate Republicans fully intend to have Senate committees of jurisdiction write their parts of the bill regardless of what’s in the House bill.