WASHINGTON (Reuters) -The Republican-controlled U.S. Senate passed President Donald Trump’s tax and spending bill on Tuesday, signing off on a massive package that would enshrine many of his top priorities into law while adding $3.3 trillion to the national debt.
The bill now heads back to the House of Representatives for final approval. Trump has pushed lawmakers to get it to his desk to sign into law by the July 4 Independence Day holiday.
Trump’s Republicans have had to navigate a narrow path while shepherding the 940-page bill through a Congress that they control by the slimmest of margins. With Democrats lined up in opposition, Republicans have had only three votes to spare in both the House and Senate as they wrangled over specific tax breaks and healthcare policies that could reshape entire industries and leave millions of people uninsured.
Yet they have managed to stay largely unified so far. Only three of the Senate’s 53 Republicans joined with Democrats to vote against the package, which passed 51-50 after Vice President JD Vance cast the tiebreaking vote.
The vote in the House, where Republicans hold a 220-212 majority, is likely to be close as well.
‘NOT FISCAL RESPONSIBILITY’
An initial version passed with only two votes to spare in May, and several Republicans in that chamber have said they do not support the version that has emerged from the Senate, which the nonpartisan Congressional Budget Office estimates will add $800 billion more to the national debt than the House version.
The House Freedom Caucus, a group of hardline conservatives who repeatedly threatened to withhold their support for the tax bill, is pushing for more spending cuts than what the Senate offered.
“The Senate’s version adds $651 billion to the deficit — and that’s before interest costs, which nearly double the total,” the caucus posted online on Monday, “That’s not fiscal responsibility. It’s not what we agreed to.”
A group of more moderate House Republicans, especially those who represent lower-income areas, object to the steeper Medicaid cuts in the Senate’s plan.
“I will not support a final bill that eliminates vital funding streams our hospitals rely on,” Representative David Valadao, a California Republican, said during the weekend debate.
Still, House Republicans are likely to face enormous pressure to fall in line from Trump in the days to come.
TAX BREAKS, IMMIGRATION CRACKDOWN, TIGHTER BENEFITS
The “One Big Beautiful Bill Act” would make permanent Trump’s 2017 business and personal income tax cuts, which are due to expire at the end of this year, and dole out new tax breaks for tipped income, overtime and seniors that he promised during the 2024 election. It provides tens of billions of dollars for Trump’s immigration crackdown and would repeal many of Democratic President Joe Biden’s green-energy incentives.
The bill would also tighten eligibility for food and health safety net programs, which nonpartisan analysts say would effectively reduce income for poorer Americans who would have to pay for more of those costs.
The CBO estimates the latest version of the bill would add $3.3 trillion to the $36.2 trillion debt pile. That increased debt effectively serves as a wealth transfer from younger to older Americans, nonpartisan analysts say, as it will slow economic growth, raise borrowing costs and crowd out other government spending in the decades to come.
The bill also would raise the nation’s borrowing limit by $5 trillion, postponing the prospect of a debt default this summer that would roil global markets.
Republicans rejected the cost estimate generated by the CBO’s longstanding methodology. Nonetheless, foreign bond investors see incentives to diversify out of U.S. Treasuries as deficits deepen.
Republicans say the bill will help families and small businesses and put benefit programs like Medicaid on a more sustainable path, and they have broadly agreed on its main contours. But they have struggled to agree on the Medicaid funding mechanism and a tax break for state and local tax payments that is a top priority for a handful of House Republicans from high-tax states including New York, New Jersey and California. Others worry that a crackdown on a funding mechanism for the Medicaid health program could lead to service cutbacks in rural areas.
Some on the party’s right flank, meanwhile, have pushed for deeper Medicare cuts to lessen its budgetary impact.
Trump has singled out those Republican dissenters on his Truth Social network and excluded them from White House events, and few have been willing to defy him since he returned to office in January. Senator Thom Tillis of North Carolina, one of the three Republicans who voted against the bill, said on Sunday he would not run for re-election next year.
(Reporting by David Morgan, Richard Cowan and Bo Erickson; Editing by Andy Sullivan, Nia Williams, Scott Malone, Alex Richardson and Alistair Bell)
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