Senate GOP To Alter Trump’s Mega Bill

Congressional Republicans are advancing a sweeping tax and spending cut package, but key differences between the House and Senate versions could delay final passage. Both chambers aim to deliver on President Donald Trump’s push for lower taxes and reduced government overreach, yet disagreements over deductions and tax incentives remain.

The House passed its version just before Memorial Day, and now the Senate is crafting its own approach. While both bills align on core tax priorities, the road to a unified plan hinges on ironing out several high-stakes differences. President Trump is urging lawmakers to get a final bill to his desk by Independence Day.

Here’s how the two proposals stack up:

1. Bigger Tax Relief for Families

The current child tax credit sits at $2,000 per child.

• House Version: Temporarily increases the credit to $2,500 from 2025 through 2028, aligning with President Trump’s second term. Starting in 2027, it’s indexed to inflation.
• Senate Version: Offers a smaller but permanent increase to $2,200, indexed to inflation beginning in 2026.

2. Delivering on Trump’s Campaign Promises

President Trump pledged to cut taxes on tips, overtime pay, and Social Security benefits, and offer relief on auto loan interest.

Both bills follow his lead, offering temporary deductions from 2025–2028:

• Tips & Overtime:
  • House: Full deduction on all tip and overtime income.
  • Senate: Caps tip deduction at $25,000, overtime at $12,500 per taxpayer.
• Auto Loans: Both chambers offer up to $10,000 in interest deductions for loans on U.S.-made vehicles.
• Social Security: Instead of taxing benefits, both versions increase deductions for seniors:
  • House: $4,000
  • Senate: $6,000

Note: Income limits apply, and phase-outs begin above certain thresholds.

3. State and Local Tax (SALT) Deductions

The SALT deduction cap currently sits at $10,000.

• House Bill: Raises the cap to $40,000 for households earning under $500,000, appealing to Republicans in high-tax states like New York and California.
• Senate Bill: Keeps the cap at $10,000, setting the stage for a contentious negotiation.

4. Medicaid Funding Changes

A potential flashpoint lies in how the two chambers handle Medicaid provider taxes—fees hospitals pay to help states fund Medicaid.

• House: Blocks states from creating or raising such taxes.
• Senate: Gradually lowers the cap from 6% to 3.5% by 2031 for states that expanded Medicaid under Obamacare, exempting nursing homes and some care facilities.

Critics, including Sen. Josh Hawley (R-MO), warn that the Senate plan could devastate rural hospitals, which are already operating on razor-thin margins.

5. Business Tax Incentives

• House Plan: Allows full expensing of equipment purchases and R&D costs for five years.
• Senate Plan: Makes these deductions permanent, a win for manufacturers and job creators backed by the U.S. Chamber of Commerce.

6. Rolling Back Biden’s Green Energy Agenda

Both chambers aim to rein in the green energy tax credits pushed by the Biden administration.

• House: Phases out tax credits for solar, wind, and energy-efficient home upgrades at a faster pace.
• Senate: Takes a slower approach but still trims incentives, raising concerns among climate activists and renewable energy groups.

7. Other Notable Provisions

• Health Savings Accounts (HSAs):
  • House: Lets Americans use HSAs to pay for gym memberships—up to $500 for individuals and $1,000 for couples.
  • Senate: Excludes this provision.
• Charitable Giving:
  • House: Reinstates a $150 deduction for non-itemizers.
  • Senate: Raises it to $1,000, encouraging greater giving.
• EV Fees:
  • House: Imposes new annual fees—$250 for electric vehicles, $100 for hybrids—to ensure all drivers contribute to highway maintenance.
  • Senate: Omits these fees.

Bottom Line

Republicans are united on delivering relief to working families, seniors, and American businesses—but the details matter. President Trump’s tax agenda is within reach, but only if House and Senate leaders can resolve their differences in time for a July 4th signing ceremony.

As these negotiations unfold, everyday Americans—especially retirees, workers, and small business owners—stand to benefit most from a finalized bill rooted in pro-growth, pro-America priorities.