The Senate Finance Committees portion of President Trumps big, beautiful bill contains some of the thorniest provisions and could set them on a collision course with the House.
The House narrowly passed its version of the legislation last month. Heres whats in the Senates bill.
2017 tax cuts: The bill makes many of the core elements of their 2017 tax cuts permanent but scales back additional cuts from what the House passed. The Senate bill locks in existing federal tax brackets, boosts the standard deduction and maintains the termination of personal exemptions all without sunsets. In contrast with the House version, the bill sets a lower increase for the child tax credit, raising it to $2,200 per child as opposed to the Houses $2,500.
Taxes on tips: The bill creates new deductions for taxes on tips, overtime pay and car loan interest a priority of Trumps that he campaigned on but doesnt make them fully deductible. Tips are deductible up to $25,000 through 2028. Overtime pay is deductible up to $12,500, or $25,000 for joint filers, through 2028. Auto loan interest is deductible up to $10,000, also through 2028.
Medicaid funding: Senate Republicans are taking a bigger swing at Medicaid in their version of the bill. The legislation would effectively cap provider taxes at 3.5 percent by 2031, down from the current 6 percent, but only for the states that expanded Medicaid under the Affordable Care Act.
The cap would be phased in by lowering it 0.5 percent annually, starting in 2027. Nonexpansion states would also be prohibited from imposing new taxes, but as was true in the House-passed version, their rates would be frozen at current levels. The lower cap would not apply to nursing homes or intermediate care facilities.
Check out the rest from The Hill here.
Welcome to The Hills Business & Economy newsletter, Im Aris Folley covering the intersection of Wall Street and Pennsylvania Avenue.
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Key business and economic news with implications this week and beyond:
The Senate on Tuesday passed legislation creating a regulatory framework for payment stablecoins in a major milestone for the crypto industry.
The House-passed version of President Trumps tax cut and domestic policy bill would add $3.3 trillion to the national debt, even when accounting for its impact on economic growth, according to an analysis released Tuesday by the Congressional Budget Office (CBO).
The Federal Reserve looks set to maintain its pause on interest rate cuts at its meeting this week amid President Trumps ongoing trade war and geopolitical tensions that are roiling commodity markets.
A group of plaintiffs suing President Trump over his reciprocal Liberation Day tariffs said they asked the Supreme Court to leapfrog a lower court to immediately take up whether the levies are legal.
New estimate finds Trump tax bill adds $3.3T to debt
The House-passed version of President Trumps tax cut and domestic policy bill would add $3.3 trillion to the national debt, even when accounting for its impact on economic growth, a new analysis by the Congressional Budget Office (CBO) finds.
The new estimate, which factors in how the bills policies would affect economic growth, found that the One Big Beautiful Bill Act would add $3.3 trillion to the national debt by the end of 2034.
The national debt, currently north of $36 trillion, would equal 125 percent of gross domestic product (GDP) by 2034.
CBO said the bill would increase GDP by just 0.5 percent over the span of that decade.
CBO Director Phillip Swagel said the bills economic effects would increase deficits and interest rates, leading to an on-net increase in the national debt. Trumps tax cuts, among other measures, would lead to a $3.7 trillion decline in federal revenue over the next ten years.
The new CBO score comes as the House-passed bill faces several obstacles in the Senate, which is already plowing ahead with its own version of Trumps policy bill. Republican senators have objected to issues including the overall cost of the bill, cuts to Medicaid and other health programs and tax provisions.
The Hills Sylvan Lane has more here.
Tax Watch is a regular feature focused on the fight over tax reform and extending the 2017 Trump tax cuts this year. Email a tip
Upcoming news themes and events were watching:
- The Federal Reserve holds its June policy meeting this week in Washington, D.C.
Branch out with more stories from the day:
Business and economic news weve flagged from other outlets:
- Stock futures slip ahead of the Federal Reserves rate decision (CNBC)
- Toy company challenges Trumps tariffs before the Supreme Court in long shot bid for quick decision (The Associated Press)
- Amazon CEO says rollout of Generative AI will reshape companys workforce (CBS News)
Top stories on The Hill right now:
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