Senate Finance Committee Chair Mike Crapo (R-Idaho) on Monday released the Senate’s long-awaited version of President Trump’s tax agenda, which would make the 2017 corporate tax cuts permanent, cut hundreds of billions of dollars in Medicaid spending and phase out renewable-energy tax cuts enacted under President Biden.
The legislative text crafted by Senate Finance Committee Republicans represents the core of Trump’s “big, beautiful bill” and includes the populist tax breaks that the president campaigned on, including provisions to shield tipped income from taxation.
It encompasses the most controversial sections of the bill, such as proposals to impose stricter work and eligibility requirements for Medicaid and to reduce the federal government’s share of Medicaid spending in states.
It also contains the issues most likely to set the Senate on a collision course with the House.
Crapo will present the newly drafted provisions in the bill to Republican colleagues at a meeting scheduled for late Monday afternoon.
Two Republican aides familiar with the legislation drafted by the Finance panel say it will go further than House-passed language to tighten Medicaid eligibility requirements and to restrict states from using health care provider taxes to collect more federal Medicaid funding.
“It’s still f’d up,” a GOP aide said of the Senate’s changes to the House-passed Medicaid provisions.
Several Republican senators have raised concerns about the Medicaid spending cuts endorsed by the House, including Sens. Susan Collins (Maine), Josh Hawley (Mo.), Jerry Moran (Kan.) and Lisa Murkowski (Alaska).
The Congressional Budget Office (CBO) estimated earlier this month that the House-passed bill would cut federal spending on Medicaid and the Children’s Health Insurance Program (CHIP) by $863 billion over ten years.
The agency projected that the number of uninsured people in the country would increase by 10.9 million over the next decade if the House proposals become law.
The deeper cuts to Medicaid spending come in response to a large number of Republican senators, including Senate Budget Committee Chairman Lindsey Graham (R-S.C.), who called for the legislation to further reduce the deficit.
The House-passed bill would cut spending by $1.6 trillion over ten years but, according to the Congressional Budget Office, add $2.4 trillion to the federal deficit.
The Senate legislation as drafted would keep the cap on state and local tax (SALT) deductions at $10,000 a year, rolling back the deal that Speaker Mike Johnson (R-La.) painstakingly cut with blue state Republicans to raise the limit on SALT deductions to $40,000 a year for households earning less than $500,000 annually.
Members of the House SALT Caucus have repeatedly warned the Senate against reneging on their deal with Johnson.
“Instead of undermining the deal already in place and putting the entire bill at risk, the Senate should work with us to keep our promise of historic tax relief and deliver on our Republican agenda,” co-chairs Reps. Young Kim (R-Calif.) and Andrew Garbarino (R-N.Y.) wrote Monday.
Developing.
