The Controversial Senate Republican Bill: What It Promises and What It Will Cost

WASHINGTON, June 2 – Congress, under Republican control, is poised to pass a comprehensive tax and spending bill that closely aligns with President Donald Trump’s policy agenda. With the Senate already giving its approval, the legislation awaits final passage in the House of Representatives before it can be signed into law.

This sweeping proposal is designed to reshape the country’s tax code, overhaul major government programs, and bolster defense and immigration efforts. However, it also comes with significant fiscal consequences. According to independent budgetary assessments, the bill would increase the national debt by $3.3 trillion over a ten-year period. The bill is projected to cut federal income by $4.5 trillion over time, while cutting government spending by nearly $1.2 trillion.

Impact on Healthcare Access

One of the more debated outcomes centers on the expected impact to health insurance coverage. Policy changes affecting Medicaid and other healthcare programs are estimated to result in 10.9 million additional Americans going without insurance over the next decade.

INDIVIDUAL TAX CUTS

A major component of the plan is the extension—and in some cases expansion—of individual tax cuts first enacted in 2017:

• Lower Income Tax Rates Made Permanent: These cuts were set to expire in 2025. Keeping them in place indefinitely is projected to cost $2.2 trillion.
• Standard Deduction Extension: The bill preserves and expands the standard deduction at a cost of $1.4 trillion.
• Alternative Minimum Tax Expansion: Exemptions for this tax will be expanded and extended, adding another $1.4 trillion in costs.
• Child Tax Credit Increase: Raised to $2,200 per child and indexed to inflation, with an overall cost of $817 billion.
• Estate Tax Exemption Raised: The exemption increases to $15 million, with a $212 billion cost implication.
• Overtime Pay Exemption: Until 2029, workers won’t pay taxes on overtime income (Cost: $90 billion).
• Tax Relief on Tipped Income: Also exempt until 2029, estimated to cost $32 billion.
• Senior Deduction: A new $6,000 deduction for Americans aged 65 and above, active until 2029.
• Auto Loan Interest Deduction: Offers tax relief on certain auto loan interest payments (Cost: $31 billion).
• Newborn Savings Accounts: Allows parents to open tax-advantaged accounts for newborns (Cost: $15 billion).
• SALT Deduction Expansion: Raises the limit on state and local tax deductions from $10,000 to $40,000 until 2029.
• Private School Scholarship Tax Break: Up to $1,700 exempted for contributions to certain school scholarships (Cost: $26 billion).

BUSINESS TAX BREAKS

The legislation provides considerable benefits to business owners:

• Pass-Through Business Deduction: Extended and enhanced, costing $737 billion.
• Full Expensing of Equipment: Allows immediate write-offs for business equipment purchases (Cost: $363 billion).
• Research & Development Expensing: Encourages innovation through $141 billion in tax relief.
• Interest Expense Expansion: Further tax benefits for companies on interest paid (Cost: $61 billion).

OTHER TAX CHANGES

Some less conventional changes are also included:

• University Endowment Tax Hike: Endowment tax for large private universities rises from 1.4% to 21%, raising $761 million.
• Remittance Fee for Immigrants: A new 1% tax on money sent abroad, estimated to generate $10 billion.
• Firearm Silencer Tax Elimination: Removes taxes on silencers (Cost: $1.7 billion).
• Terrorist-Linked Organization Penalties: Enables the government to revoke tax-exempt status of groups tied to terrorism.

MEDICAID & HEALTH PROGRAM SAVINGS

Aimed at reducing federal outlays, the bill proposes $1.1 trillion in Medicaid and healthcare cuts:

• Work Requirements: From 2027, childless, able-bodied adults must work, study, or volunteer 80 hours monthly.
• Eligibility Scrutiny Tightened: Stricter income verification and fewer enrollment flexibilities.
• Exclusion of Some Non-Citizens: States could face penalties for covering certain non-citizens with their own funds.
• Nursing Home Staffing Rules Rolled Back: No federal mandate for minimum staff levels.
• Gender Transition Ban: No federal funds for gender transition treatments for minors.
• No Federal Funds for Some Providers: Entities like Planned Parenthood would be ineligible for payments.
• Provider Tax Reform: Limits how states use provider taxes to leverage federal funds, though rural providers get $50 billion to cushion the blow.
• Tighter ACA Eligibility Rules: More stringent requirements to qualify for exchange-based health plans.

ENERGY, ENVIRONMENT & COMMUNICATIONS

This portion scales back environmental spending:

• Green Energy Grant Cuts: Eliminates funding from previous climate-focused legislation.
• Ends Electric Vehicle & Clean Energy Incentives: Includes tax breaks and grants.
• Fuel Standards Enforcement Weakening: Less stringent automobile fuel-efficiency enforcement.
• Boost for Fossil Fuels: New incentives for natural gas, oil pipelines, and related infrastructure.
• Spectrum Auctions: Opens more airwave bands for private use, potentially increasing federal revenue.

IMMIGRATION & JUSTICE

Spending in this area totals $178 billion:

• Border Wall and Surveillance: Construction funding plus money for drones and towers.
• Immigration Staffing Increase: More personnel for border control, courts, and enforcement agencies.
• Higher Detention Capacity: Funding for more immigration detention beds.
• Presidential Protection Expansion: Boosted funding for protective services.
• Visa Fraud Investigations: Additional resources to tackle immigration-related crimes.
• Immigrant Fee Hikes: Up to $5,000 for work permits, asylum cases, and hearings.
• Border Security Reimbursements to States: Compensation for state-level enforcement efforts.
• Litigation Barriers: Allows courts to require plaintiffs to post bonds before challenging government immigration policies.

MILITARY INVESTMENT

Total cost: $153 billion

• Naval & Missile Defense Boost: Expands shipbuilding and missile capabilities.
• Weapons Procurement: Investments in munitions and nuclear arms.
• Border Assistance by Military: Defense funding directed toward support roles in immigration enforcement.

FOOD ASSISTANCE CHANGES

Estimated savings: $186 billion

• Work Requirements for SNAP: Tightened eligibility for food assistance participants.
• Cost Shifts to States: Some administrative and benefit responsibilities transferred to state governments.
• Noncitizen Exclusions: Further limits on benefits for certain noncitizens.

EDUCATION POLICY REFORMS

Significant changes to student loan programs are expected to generate over $350 billion in savings:

• New Repayment Plans: Changes to how loans are paid back (Savings: $287 billion).
• Borrowing Limits: Restrictions on how much can be borrowed under federal programs (Savings: $51 billion).
• Student Loan Forgiveness Limits: Tighter rules on when loans can be canceled (Savings: $18 billion).