Senate Finance Committee unveils budget bill changes

Senate Finance Committee Chairman Mike Crapo, R.-Idaho, on Monday released revisions to the finance section of the One Big Beautiful Bill Act. Like the House version of the bill passed last month, the Senate’s version would make 2017 tax cuts permanent and remove taxes on tips and overtime. Unlike the House version however, the Senate’s version would place a $25,000 cap on deductions for tips and a $12,500 cap on deductions for overtime. The new text also included changes to Medicaid and a planned tax revamp. Some of the changes are expected to diminish the bill’s chances of passage when it's sent back to the House with the revisions.

What are the key changes in the Senate’s version of the budget bill?

• Raises the debt ceiling by $5 trillion, instead of the $4 trillion increase in the House version.

• Adds to the House’s new work requirements for Medicaid eligibility, requiring adults with children older than 14 to prove they work, study, or perform community service for 80 hours each month.

• Prevents states that didn’t expand Medicaid under the Affordable Care Act from increasing the rate of healthcare provider taxes to be eligible for more federal funding.

• Caps state and local tax, or SALT, deductions at $10,000 a year and makes them permanent. The House version of the bill raised the limit to $40,000 a year for households earning less than $500,000 annually, after blue-state Republican representatives said they wouldn’t support the bill without that change.

• Lowers the House’s proposed $2,500 child tax credit to $2,200 per child, but allows for adjustment for inflation.

• Institutes tax deductions on tips, overtime, and car loan interest through 2028.

• Removes a House provision that required green energy projects to start construction within 60 days of the bill’s enactment to qualify for tax credits.

• Ends the clean hydrogen tax credit on Jan. 1, 2026, unless hydrogen energy production facilities begin construction by then.

Dig deeper: Read Leo Briceno’s report on how Christian lawmakers are debating the best approach to food stamp programs.