Senate Republicans Seek Tougher Medicaid Cuts and Lower SALT Deduction in Trump's Big Bill

Al Arabiya

6 hours ago

Senate Republicans proposed deeper Medicaid cuts, including new work requirements for parents of teenagers, to offset the costs of making President Donald Trump's tax breaks permanent in their draft legislation.
The proposal maintains the current $10,000 deduction of state and local taxes (SALT), drawing criticism from GOP lawmakers from high-tax states who advocated for a $40,000 cap in the House-passed bill. Senators insisted negotiations would continue. The Senate draft also increases Trump's proposed tax break for seniors with a larger $6,000 deduction for low- to moderate-income senior households earning no more than $75,000 a year for singles and $150,000 for couples.
The text unveiled by the Senate Finance Committee Republicans offers the most comprehensive look at changes senators want to make to the 1,000-page package approved by House Republicans last month. GOP leaders aim to fast-track the bill for a vote by Trump's Fourth of July deadline. Senator Mike Crapo (R-Idaho), the chairman, stated the proposal would prevent a tax hike and achieve significant savings by cutting green energy funds and targeting 'waste, fraud, and abuse.' This comes as Americans broadly support funding levels for safety net programs, with many viewing Medicaid and food assistance programs as underfunded, according to a poll from The Associated Press–NORC Center for Public Affairs Research.
Trump's 'big bill' combines GOP priorities into what he calls the 'beautiful bill.' Republicans are attempting to pass it quickly despite unified Democratic opposition. Fundamental to the package is extending some $4.5 trillion in tax breaks approved in 2017, set to expire this year. New additions include no taxes on tips, a $500 increase to the child tax credit, and over $1 trillion in program cuts. The nonpartisan Congressional Budget Office estimated the House version would add $2.4 trillion to the national deficit over a decade and leave 10.9 percent fewer people insured due to new work requirements and other changes. The CBO reported the wealthiest households would receive the largest tax breaks (around $12,000 annually), while the poor would see a tax hike of roughly $1,600, and middle-income households would receive tax breaks of $500 to $1,000 a year.
Both House and Senate packages include a $350 billion increase for Homeland Security and Pentagon funds, with $175 billion for Trump's deportation efforts, such as hiring 10,000 more Immigration and Customs Enforcement (ICE) officers. Protests over deportations have occurred nationwide, including the handcuffing of Senator Alex Padilla in Los Angeles. Deficit hawks like Senator Rand Paul (R-Kentucky) question the Homeland Security spending. Senate Democratic Leader Chuck Schumer warned that the Senate GOP's proposed Medicaid cuts are deeper than the House bill.
As the package moves to the Senate, changes to Medicaid, SALT, and green energy programs are tradeoffs GOP leaders are making to achieve passage with their slim majorities. Criticism arose quickly after House Speaker Mike Johnson warned senators against substantial changes. Representatives Young Kim (R-California) and Andrew Garbarino (R-New York), co-chairs of the House SALT caucus, insisted the negotiated SALT deal must remain. Representative Nicole Malliotakis (R-New York) called the $10,000 cap 'insulting.'
Large cost savings come from imposing new work requirements on able-bodied single adults aged 18 to 64 without dependents receiving Medicaid. The Senate version expands the requirement to parents of children older than 14. Republicans also proposed expanding work requirements in the Supplemental Nutritional Assistance Program (SNAP) to include older Americans up to age 64 and parents of children older than 10. People would need to work 80 hours monthly or participate in community service. Senator Josh Hawley (R-Missouri) joined others pushing to mitigate Medicaid cuts, including to the provider tax levied on hospitals. The Senate plan proposes phasing down the provider tax from six percent to 3.5 percent by 2031, with exceptions. A new $35 co-pay for some Medicaid patients earning above the poverty line, with exceptions, remains. Senate Republicans seek a slower phase-out of some Biden-era green energy tax breaks for wind and solar projects, while electric vehicle tax breaks would be eliminated immediately. Conservative Republicans oppose raising the national debt limit by $5 trillion.