President Trump’s second-term agenda, encapsulated in a massive budget package that narrowly passed the House with only Republican support, now faces a challenging path through the Senate. The bill is almost certain to be revised due to opposition from a handful of GOP senators whose votes are crucial for its passage.
House Speaker Mike Johnson recently urged Senate Republicans to maintain the bill’s integrity, emphasizing party unity. However, Senate Majority Leader John Thune acknowledged the Senate’s intention to make its mark on the legislation. With the potential for a united Democratic opposition, Senate Republicans can only afford three defections from their party.
One such defector is Senator Rand Paul, who has stated his opposition due to concerns about the bill’s potential to significantly increase the national debt. The House version of the bill, including interest, is projected to add $3.1 trillion to the debt. Similar to the House, the Senate Republican caucus is divided between fiscal conservatives seeking deeper spending cuts and moderates wary of certain provisions deemed too drastic.
Several key sticking points are emerging as the bill moves through the Senate:
Medicaid Changes: Senators Susan Collins, Lisa Murkowski, and Josh Hawley have expressed concerns about proposed changes to Medicaid, including new work requirements for childless recipients and more frequent eligibility checks. While generally supportive of work requirements, some senators have warned against cuts to Medicaid benefits, with Hawley calling such cuts “morally wrong and politically suicidal.” Concerns also exist regarding freezing states’ provider taxes, which help fund their share of Medicaid costs, and new copay requirements.
Deeper Spending Cuts: A number of fiscal hawks, including Senators Ron Johnson and Rick Scott, believe the bill’s proposed $1.5 trillion in cuts is insufficient and are pushing for more substantial reductions. Senators Roger Marshall and Ted Cruz have also echoed this sentiment, suggesting the Senate will aim for cuts closer to $2 trillion.
Rolling Back IRA Clean Energy Tax Credits: Provisions in the House bill to roll back clean energy tax credits from the Inflation Reduction Act face potential opposition in the Senate. Senators Murkowski, John Curtis, Jerry Moran, and Thom Tillis have cautioned against a full-scale repeal, citing the importance of a stable tax framework for domestic energy development and warning of disruptions to the American people and the U.S.’s position as a global energy leader.
State and Local Tax Deduction (SALT): The House-passed bill includes a provision increasing the SALT deduction cap to $40,000. While this was a point of contention in the House, it is less of an issue in the Senate, as none of the blue states have Republican senators. Some Senate Republicans, like Senator Ron Johnson, have indicated their opposition to this provision.
Debt Ceiling: Fiscal conservatives are unhappy with the bill’s inclusion of a $4 trillion increase to the debt ceiling. Senator Rand Paul has been the most vocal opponent, suggesting a short-term increase to ensure spending cuts are implemented before a larger hike. Senator Johnson also supports splitting the package and a shorter extension.
Food Stamps (SNAP): The bill proposes significant cuts to the Supplemental Nutrition Assistance Program, requiring states to cover a share of the benefit costs starting in 2028. Currently, the program is fully federally funded. Senator John Boozman has indicated that this provision is a point of concern for some members and will need to be addressed.
As the Senate takes up this critical budget package, significant negotiations and potential revisions are expected to reconcile the diverse viewpoints within the Republican party and address the concerns of individual senators to ensure its passage.
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