Senate GOP Unveils Tax Bill Changes Amid Internal Pushback and Budget Concerns

Senate Republicans unveiled major changes to President Donald Trump’s sweeping tax and spending bill on Monday, intensifying internal GOP divisions ahead of the July 4 deadline. The updated proposal maintains the $10,000 cap on state and local tax deductions—far below the House's $40,000 limit—sparking backlash from House Republicans whose constituents would benefit from the higher cap.

Senator Ron Johnson criticized the bill for failing to address the growing federal deficit, while others raised concerns about cuts to Medicaid. Senator Josh Hawley warned that capping Medicaid provider taxes could devastate rural hospitals. The nonpartisan Congressional Budget Office previously projected the bill could leave 4.8 million Medicaid recipients uninsured.

The revised bill includes permanent business tax breaks, such as full expensing for domestic R&D and new machinery investments, which were temporary in the House version. It also phases out Biden-era green energy and EV subsidies more aggressively, leading to a drop in solar stock prices.

Another controversial provision includes capping deductions on tipped income and overtime pay, with thresholds phasing out above $150,000 for individuals. A retaliatory tax on foreign investors is also maintained, though delayed until 2027.

The bill boosts military and border security funding and raises the debt ceiling by $5 trillion to avoid default on the $36.2 trillion national debt. With narrow GOP control in both chambers, the legislation faces resistance from fiscal hawks and social policy advocates, and is unlikely to gain any Democratic support.

Senator Mike Crapo emphasized continued collaboration with House Republicans and the Trump administration to push the bill forward. Debate continues as Senate leaders aim to reconcile differences and finalize the legislation before the deadline.