Updated July 1, 2025 at 7:48 PM EDT
Republican lawmakers on Capitol Hill are in the final stages of getting massive legislation containing much of President Trump's domestic agenda through Congress.
By a vote of 51-50, the Senate narrowly passed the bill on Tuesday, with Vice President JD Vance casting the tie breaking vote. Now, the fate of the bill rests in the House of Representatives.
The House passed an initial version of the bill in late May, but the Senate has since made changes, and House members will need to agree on the latest bill before it can head to the president's desk.
Republicans in both chambers agree on the legislation's key pillars, including an extension of President Trump's 2017 tax cuts as well as increased funding for border security, defense and energy production.
However, deep disagreements remain over how to pay for those policies, and some of the changes in the Senate-passed bill may prove challenging for some House Republicans to rally behind. Notably, the Senate bill includes a higher increase to the debt limit and additional cuts to Medicaid, the joint federal/state program that provides health care for low-income, elderly and disabled Americans.
Multiple House Republicans have already expressed concern with parts of the Senate bill, which could be a problem for House Speaker Mike Johnson, R-La., who is working with a razor thin majority and can't afford many defections if lawmakers want to get the bill to Trump's desk by a self-imposed July 4th deadline.
As House Republicans inch closer to a final vote, here's a quick look at some of the changes made by Senate Republicans to the original House bill.
Some of the biggest changes
Tax incentives
Congressional Republicans have included many of the president's tax-related campaign promises in the bill. The Senate's text includes temporary changes that would allow Americans to deduct up to $25,000 for tip wages and $12,500 for overtime pay through 2028. The Senate version also says that overtime and tip deductions will be reduced for Americans with incomes higher than $150,000. Those limits were not included in the House version.
The Senate bill also increases the child tax credit from $2,000 to $2,200 per child and adjusts the amount for inflation after 2025. That's slightly different than the House plan to temporarily increase the credit to $2,500 before cutting it back to the current level and adjusting for inflation.
In addition, the Senate text would permanently expand the standard deduction, marking a key difference from the House bill, which temporarily expands it through 2028. Senators also boosted a tax deduction for people over 65 to $6,000 through 2028, compared to $4,000 in the House bill. Both chambers included a phase out for people earning over $75,000.
Increasing the debt ceiling
The Senate plan would lift the nation's debt limit by $5 trillion, a sizable increase compared to the House bill, which agreed to $4 trillion.
Lifting the debt limit doesn't authorize new spending. Instead, it allows the government to pay for programs that Congress has already authorized. If the cap isn't lifted and the government can't meet its obligations, then it will be at risk of default — a scenario that economists say would be catastrophic not just for the U.S., but the global financial system as a whole. An estimate from the nonpartisan Congressional Budget Office found that without action from Congress, the U.S. will run out of money to pay its bills at some point between mid-August and the end of September.
Earlier this month, 38 members signed onto a letter addressed to Senate Majority Leader John Thune, R-S.D., criticizing the size of the increase.
Changes to SNAP
Both the Senate and House outlined reforms for the Supplemental Nutrition Assistance Program, known as SNAP, which provides aid for food to more than 40 million low-income Americans.
The Senate bill includes expanded work requirements that "able bodied adults" continue to work up to age 64. There are exemptions for parents with children under 14 and limits on the ways states can offer waivers for those requirements.
The bill would also force states to take on a greater share of the cost of providing food assistance. The amount a state owes would be based on a formula set by the percentage of erroneous payments reported each year. Those changes would go into effect in 2028.
State and Local Tax Deduction
One of the thorniest issues during negotiations has been the state and local tax deduction, also known as SALT. The deduction is particularly important to a small number of GOP lawmakers in the House from blue states with high taxes, such as California and New York. Trump's 2017 tax cuts capped the SALT deduction at $10,000. The Senate plan would temporarily lift the cap to $40,000 for married couples with incomes up to $500,000. But that provision would expire after 2028 — an effort to buoy the blue-state Republicans through the 2026 midterm and 2028 election cycles, while limiting the long-term impact of the cuts on federal tax revenue.
Medicaid
Changes to Medicaid have remained one of the most divisive issues throughout both House and Senate negotiations.
The Senate plan would require able bodied adults to work 80 hours per month until age 65 to qualify for benefits. There are carve outs for parents of children under 14 and those with disabilities. But even with those exceptions, the bill's cuts could lead to nearly 12 million people losing health coverage, according to estimates from the CBO.
The plan would also cap and gradually reduce the tax states can impose on Medicaid providers. The phase out would begin in 2028, ultimately ending in a 3.5% cap on that tax. It's a change that some GOP Senators expressed concern with, arguing the tax is a critical funding stream for rural hospitals in particular, and cutting it could put many of these hospitals at risk of closing.
In an effort to alleviate some of those concerns, Senate GOP leaders included a new $50 billion fund to support rural hospitals. That program would also begin in 2028 and funds would be spread out over five years.
What's stayed mostly the same
Extending the Trump tax cuts
The Senate bill calls for $4 trillion in tax cuts, which is slightly higher than the $3.8 trillion proposed in the House. That move would extend Trump's 2017 tax cuts, which are set to expire at the end of the year, meaning that without an extension, most households would see their taxes increase.
Billions for border security
Both the Senate and the House bills allocate $46.5 billion toward completing Trump's border wall. It also puts $5 billion for Customs and Border Protection facilities and $10 billion to be used for border security more broadly. The Senate bill sets aside less funding to hire and retain more agents and officers, proposing $4.1 billion compared to the $6 billion allocated in the House. The legislation also invests in upgraded technology for screenings and surveillance of U.S. borders.
New immigration fees
Much like the House-passed bill, the Senate legislation includes a handful of new or increased fees for immigration services. The bill would create a $550 charge for work authorization applications with renewal every six months.
However, the Senate parliamentarian determined that a $1,000 fee for asylum applications did not meet the rules necessary to qualify for a simple majority vote.
A student loan overhaul
Like the House-passed bill, the Senate plan would scrap several existing loan repayment options, including the Biden-era SAVE program that based payments on income and household size. It replaces them with a new, standard repayment plan and an income-based plan Republicans call their "Repayment Assistance Plan." The bill would also cap the amount that parents and graduate students can take out in federal loans each year.
One difference between the two bills concerns the Pell Grant program for low-income students. The House proposed increasing the credit hours required for full-time and part-time students in order to receive Pell Grants, but the Senate has left current enrollment rules intact. The Senate bill does bar students from qualifying for a Pell Grant if they've received a full scholarship through other sources of aid.
A new tax on wind and solar
The Senate's tax-and-spending bill phases out tax incentives for clean energy sooner than scheduled. Without the tax credits, America is likely to build fewer wind and solar projects and use more natural gas to generate electricity, according to a study this winter commissioned by the Clean Energy Buyers Association, whose members range from Amazon to ExxonMobil to Walmart.
The Solar Energy Industries Association, a trade group, said in a statement that the Senate bill "undermines the very foundation of America's manufacturing comeback and global energy leadership."
Industry executives and analysts say clean energy is crucial to meet rising electricity demand from things like data centers, because the projects are quick to build and produce electricity that's relatively cheap.
Ahead of Tuesday's Senate vote, Doug Lewin, an energy consultant in Texas, said abruptly unwinding the incentives would hit consumers through higher electricity bills.
"We will still see solar built," Lewin said. "We'll just see less of it. And it'll be more expensive."
U.S. solar manufacturers are also worried. The incentives that are being phased out encourage companies building clean energy projects to use equipment and components made in American factories. Manufacturers and their supporters warn that quickly ending the incentives would threaten a decade-long push to onshore solar manufacturing and challenge China's dominance of the sector.
"As we have been telling Members of Congress for months, this bill will lead to a flood of Chinese imports, hurting U.S. manufacturing jobs and investments," Mike Carr, executive director of the Solar Energy Manufacturers for America Coalition, said in a statement.
Michael Copley contributed reporting.
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