WASHINGTON – Senate Republicans presented more extensive Medicaid reductions on Monday, which include additional work obligations for parents of teenagers. This suggestion aims to cover the expenses associated with making President Donald Trump’s tax reductions permanent, as they introduced the initial version of his significant legislative proposal.
Republican proposals maintain the existing $10,000 state and local tax deduction, known as SALT, which met with immediate criticism from GOP legislators from high-tax states like New York. These lawmakers had advocated for a $40,000 limit in the bill passed by the House. Senators assured further discussions on this matter.
Furthermore, the Senate’s blueprint enhances Trump’s suggested new tax relief for senior citizens, offering a larger $6,000 deduction for elderly households with low to moderate incomes not exceeding $75,000 annually for single individuals and $150,000 for married couples.
All told, the text unveiled by the Senate Finance Committee Republicans provides the most comprehensive look yet at changes the GOP senators want to make to the 1,000-page package approved by House Republicans last month. GOP leaders are pushing to fast-track the bill for a vote by Trump’s Fourth of July deadline.
Sen. Mike Crapo, R-Idaho, the chairman, said the proposal would prevent a tax hike and achieve “significant savings” by slashing green energy funds “and targeting waste, fraud and abuse.”
It comes as Americans broadly support levels of funding for popular safety net programs, according to the poll from The Associated Press-NORC Center for Public Affairs Research. Many Americans see Medicaid and food assistance programs as underfunded.
What’s in the big bill, so far
Trump’s big bill is the centerpiece of his domestic policy agenda, a hodgepodge of GOP priorities all rolled into what he calls the “beautiful bill” that Republicans are trying to swiftly pass over unified opposition from Democrats — a tall order for the slow-moving Senate.
Fundamental to the package is the extension of some $4.5 trillion in tax breaks approved during his first term, in 2017, that are expiring this year if Congress fails to act. There are also new ones, including no taxes on tips and a $500 increase to the child tax credit, as well as more than $1 trillion in program cuts.
After the House passed its version, the nonpartisan Congressional Budget Office estimated the bill would add $2.4 trillion to the nation’s deficits over the decade, and leave 10.9 fewer people without health insurance, due largely to the new work requirements and other changes being proposed.
The biggest tax breaks, some $12,000 a year, would go to the wealthiest households, CBO said, while the poor would see a tax hike of roughly $1,600. Middle-income households would see tax breaks of $500 to $1,000 a year, CBO said.
Both the House and Senate packages are eyeing a massive $350 billion buildup of Homeland Security and Pentagon funds, including some $175 billion for Trump’s mass deportation efforts, such as the hiring of 10,000 more officers for Immigration and Customs Enforcement, or ICE.
This comes as protests over deporting migrants have erupted nationwide — including the stunning handcuffing of Sen. Alex Padilla last week in Los Angeles — and as deficit hawks such as Kentucky Sen. Rand Paul are questioning the vast spending on Homeland Security.
Senate Democratic Leader Chuck Schumer warned that the Senate GOP’s draft “cuts to Medicaid are deeper and more devastating than even the Republican House’s disaster of a bill.”
Tradeoffs in bill risk GOP support
As the package now moves to the Senate, the changes to Medicaid, SALT and green energy programs are part of a series of tradeoffs GOP leaders are making as they try to push the package to passage with their slim majorities, with almost no votes to spare.
But criticism of the Senate’s version came quickly after House Speaker Mike Johnson warned senators off making substantial changes.
“We have been crystal clear that the SALT deal we negotiated in good faith with the Speaker and the White House must remain in the final bill,” the co-chairs of the House SALT caucus, Reps. Young Kim, R-Calif., and Andrew Garbarino, R-N.Y., said in a joint statement Monday.
Republican Rep. Nicole Malliotakis of New York posted on X that the $10,000 cap in the Senate bill was not only insulting, but a “slap in the face to the Republican districts that delivered our majority and trifecta” with the White House.
Medicaid and green energy cuts
Some of the largest cost savings in the package come from the GOP plan to impose new work requirements on able-bodied single adults, ages 18 to 64 and without dependents, who receive Medicaid, the health care program used by 80 million Americans.
While the House first proposed the new Medicaid work requirement, it exempted parents with dependents. The Senate’s version broadens the requirement to include parents of children older than 14, as part of their effort to combat waste in the program and push personal responsibility.
Already, the Republicans had proposed expanding work requirements in the Supplemental Nutritional Assistance Program, known as SNAP, to include older Americans up to age 64 and parents of school-age children older than 10. The House had imposed the requirement on parents of children older than 7.
People would need to work 80 hours a month or be engaged in a community service program to qualify.
One Republican, Missouri Sen. Josh Hawley, has joined a few others pushing to save Medicaid from steep cuts that would kick people off the program — including to the so-called provider tax that almost all states levy on hospitals as a way to help fund their programs.
The Senate plan proposes phasing down that provider tax, which is now allowed to go up to 6%. Starting in 2027, the Senate looks to lower that threshold gradually until it reaches 3.5% in 2031, with exceptions for nursing homes and intermediate care facilities.
The Senate also keeps in place the House’s proposed new $35-per-service co-pay imposed on some Medicaid patients who earn more than the poverty line, which is about $32,000 a year for a family of four, with exceptions for some primary, prenatal, pediatric and emergency room care.
And Senate Republicans are seeking a slower phase-out of some Biden-era green energy tax breaks to allow continued develop of wind, solar and other projects that the most conservative Republicans in Congress want to end more quickly. Tax breaks for electric vehicles would be immediately eliminated.
Conservative Republicans say the cuts overall don’t go far enough, and they oppose the bill’s provision to raise the national debt limit by $5 trillion to allow more borrowing to pay the bills.
“We’ve got a ways to go on this one,” said Sen. Ron Johnson, R-Wis.
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Associated Press writers Mary Clare Jalonick contributed to this report.
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