What’s New in the Senate Version of Trump Tax and Spending Bill

Republican leaders are aiming for quick negotiations over needed changes to the newly unveiled Senate tax bill which lacks the votes to secure majorities in both chambers as written.

The prospect of prolonged talks with holdouts in both the conservative and moderate wings of the party threaten Senate Majority Leader John Thune’s goal of passing President Donald Trump’s tax-cut legislation by July 4.

The Senate bill makes much more aggressive cuts to Medicaid spending than the version the House passed last month, an aspect that is already drawing pushback from moderate Republicans and lawmakers concerned about the political ramifications of restricting health benefits for their constituents.

Finance Chair Mike Crapo told reporters he’s “not surprised” by the reaction so far to the Medicaid changes, and said they are vetting the bill with colleagues. Those provisions will likely score as saving several hundreds billions of dollars more than the House bill, he said.

Vice President JD Vance met with Senate Republicans at the Capitol on Tuesday to urge them to support the bill and said he’s confident they are on track to pass the bill around July 4.

“We have got to work through some issues,” Vance told reporters following the meeting. “It’s part of the legislative process.”Henrietta Treyz, Managing Partner and Director of Economic Policy at Veda Partners, joins Bloomberg Intelligence to discuss senate bill updates.

The Senate bill takes a hardline stance against raising the $10,000 cap on the state and local tax deduction, earning it an immediate thumbs-down from a faction of New York, New Jersey and California House members who have threatened to block the bill if it doesn’t include the $40,000 SALT cap deal they struck with House Speaker Mike Johnson.

Crapo also told reporters that the SALT provisions will have to be worked out with the House and the White House. The cap in the Senate bill is considered a placeholder.

“That’s a very big piece obviously,” he said.

Generous tax breaks for tips, overtime and pass-through businesses were also scaled back to reduce the price tag of the bill. Even still, conservatives say they aren’t satisfied with these efforts to reduce the overall cost and are plotting to delay a planned Senate vote next week to August.

“This is just the opening shot,” said Texas Senator John Cornyn, a leadership ally, adding that many Republicans just saw the bill for the first time on Monday.

The Senate can only pass the bill if a minimum of 50 out of 53 Republican senators vote for the measure and Vance breaks the tie. There are already more than three Republican senators who have said they have problems with the bill.

“This bill needs a lot of work,” Missouri Senator Josh Hawley said after learning the bill restricts a tax on Medicaid providers, a move that would reduce reimbursements to states and he says would mean the closure of rural hospitals.

Hawley that he spoke to Trump about the bill, noting that Trump told him he was “surprised” by the Senate’s Medicaid cuts. The president has said he doesn’t want to curb to benefit programs — but he’s also told lawmakers he’s open to eliminating “waste and abuse” giving Republicans wide latitude to frame the reductions stamping out fraud.

Senators Susan Collins of Maine, Lisa Murkowski of Alaska and Jim Justice of West Virginia had already objected to the less stringent Medicaid cuts in the House bill. Justice said Tuesday he has “concerns” about the Senate provider tax provision, while Murkowski said Medicaid is a “priority” issue for her and she’s not satisfied with the work requirements.

A group of moderates who advocate for clean energy tax breaks, including North Carolina’s Thom Tillis and Utah’s John Curtis said they are still studying the bill and suggested they may need more tweaks to lengthen the phaseout of tax credits for renewable energy.

Collins said she is seeking “many” changes to the bill, pointing to lengthy and complicated talks to iron out all the disagreements.

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