On Monday, Senate Finance Committee Chairman Mike Crapo (R-Idaho) unveiled the Senate’s long-anticipated iteration of President Trump’s tax cuts, which seeks to make permanent the corporate tax reductions established in 2017. The proposal also includes significant cuts to Medicaid funding and the elimination of renewable energy tax incentives introduced under President Biden.
Legislative Text The draft from the Senate Treasury Committee encapsulates the essence of Trump’s “big, beautiful bill,” featuring tax credits that appeal to the populist agenda championed by the president, with measures allowing the president to derive income from taxation.
The proposal addresses some of the most contentious aspects, such as stricter job and eligibility criteria aimed at reducing the federal portion of Medicaid funding in various states.
It also raises the potential for conflicts between the Senate and the House on critical issues.
Crapo is set to present the new provisions to his Republican colleagues at a meeting scheduled for late Monday afternoon.
Sources indicate that two Republican senators involved in drafting the legislation believe it will push beyond language currently in the House to enforce stricter criteria for Medicaid eligibility and curb states’ ability to leverage healthcare provider taxes for federal Medicaid funds.
“That’s still up in the air,” remarked a GOP aide concerning the adjustments to the Senate’s Medicaid clauses from the House.
Several Republican senators have voiced concerns about the Medicaid cuts approved by the House, including Sens. Susan Collins (Maine), Josh Hawley (Missouri), Jerry Moran (Kansas), and Lisa Murkowski (Alaska).
This month, the Congressional Budget Office (CBO) projected that the House-passed legislation would lead to a $863 billion reduction in spending on Medicaid and the Children’s Health Insurance Program (CHIP) over the next decade.
The agency anticipates that if the House’s proposal is enacted, the number of uninsured individuals in the country could rise by 10.9 million over the next ten years.
Further cuts in Medicaid are being advocated by several Republican senators, including Senate Budget Committee Chairman Lindsey Graham (R-S.C.).
The House-approved bill proposes $1.6 trillion in spending cuts over a decade, while concurrently adding $2.4 trillion to the federal deficit, according to the CBO.
The Senate’s draft legislation maintains the cap on the state and local tax (SALT) deduction at $10,000 per year and reverses an agreement that would have allowed Mike Johnson (R-LA) to negotiate reduced limits for Republicans in blue states, increasing the SALT deduction limit to $40,000 annually for households earning under $500,000.
Members of the House SALT Caucus have repeatedly cautioned the Senate against abandoning its agreement with Johnson.
“Rather than undermining the agreement and jeopardizing the overall bill, the Senate should collaborate with us to uphold its historical promise of tax relief and advance the Republican agenda.”
Developing.
Source: thehill.com