The 1,000-page package passed by Senate Republicans on Tuesday locks in President Donald Trump's tax cuts and makes significant changes to Medicaid, food assistance, student loans, green energy credits, and the debt ceiling — setting the stage for a House vote before Friday's July 4 deadline, The Hill reported.
In a legislative win for Trump, Senate Republicans passed a broad policy bill that solidifies the 2017 tax overhaul while slashing key safety net programs and overhauling energy and education policies.
The legislation now heads to the House, where Republican leaders are aiming for final passage before Independence Day.
A central piece of the bill makes permanent individual income tax cuts from Trump's 2017 law. It also maintains federal tax brackets, increases the standard deduction, and keeps the termination of personal exemptions. While delivering new deductions for tipped income, overtime, and car loan interest, those will not be fully deductible.
The package also enacts significant changes to Medicaid, the joint federal-state health insurance program for low-income Americans. Starting Dec. 31, 2026, recipients will be required to work or attend school for at least 80 hours a month to maintain coverage. This rule applies to childless adults and parents of children older than 14.
Added provisions mandate more frequent eligibility checks and allow states to impose co-pays of up to 5% of the enrollee's annual income on those above the poverty line.
The Senate parliamentarian, however, ruled that two provisions violated chamber rules and had to be removed: one cutting off federal funding to states that use their own money to cover illegal immigrants, and another banning Medicaid coverage for gender transition procedures.
Regarding food assistance, the bill modifies the allocation of Supplemental Nutrition Assistance Program costs. Currently, SNAP is fully federally funded. Under the bill, states with payment error rates above 6% would begin contributing between 5% and 15% of the benefit costs.
States below that threshold would remain fully federally funded. Due to pushback from some Senate Republicans, including those from Alaska, states with the highest error rates would receive delayed implementation.
In education, the legislation overhauls the federal student loan system. Annual borrowing limits would be set at $20,500 for graduate students, $50,000 for law or medical students, and $20,000 for Parent PLUS loans. Economic hardship and unemployment deferments would be eliminated, though loan rehabilitation would be allowed twice instead of once.
The bill also boosts Pell Grant funding in 2026. A new workforce Pell Grant would support students in short-term training programs.
The bill scales back tax incentives for wind and solar energy projects. To qualify, projects must begin producing electricity by 2028.
The legislation raises the national debt ceiling by $5 trillion. The national debt now exceeds $36 trillion.
Republicans also included a new tax credit refund for donors who contribute to organizations that provide K-12 school choice scholarships. The measure is viewed as a win for the school choice movement, creating a national workaround for states that have resisted such programs.
The House is expected to consider the Senate bill this week.
Jim Thomas ✉
Jim Thomas is a writer based in Indiana. He holds a bachelor's degree in Political Science, a law degree from U.I.C. Law School, and has practiced law for more than 20 years.
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