President Trump's One Big Beautiful Bill Act cleared the Senate, thanks to a tie-breaking vote from Vice President JD Vance. Doubling a rural hospital emergency fund to $50 billion and removing a tax on renewable energy production helped the bill get across the finish line.
However, it still remains to be seen whether it the bill can clear the House in its current form. Some House GOP moderates dislike the sharper Medicaid spending curbs imposed by the Senate, while fiscal conservatives disapprove of the bill's bottom line.
Medicaid Cuts
The reality of the Big Beautiful Bill's tough trade-offs burst into the open on Sunday night, as Sen. Thom Tillis (R-N.C.) denounced Medicaid provisions that he said would cost his state $26 billion in support and kick 663,000 North Carolinians off their health plans. The speech also effectively ended his national political career, with Tillis opting to call off his 2026 reelection campaign, rather than do battle against both Trump and the Democrats.
Hospital operators including Tenet Healthcare slipped early Monday but then rallied, despite the revised Senate bill targeting $930 billion in cuts to Medicaid spending and about $230 billion in cuts to spending on tax credits to buy insurance on the Affordable Care Act health insurance exchanges.
By comparison, the House sought $793 billion in Medicaid cuts. And the Senate may not be done yet, with a vote still expected on an amendment that would gradually shift the 90%-10%, federal-state split of ACA Medicaid expansion costs closer to 50%-50%.
The Congressional Budget Office found that the House version of the OBBBA would increase the ranks of the uninsured by 10.9 million. That rises to 16 million due to the GOP's apparent decision to let enhanced premium tax credits for the ACA exchanges expire at the end of the year.
On June 24, 16 House Republicans wrote to Senate Majority Leader John Thune, taking issue with the Senate version of the bill that fails to "give hospitals time to adjust to new budgetary constraints."
Inflation Reduction Act Tax Credits
The Senate GOP's OBBBA changes to Inflation Reduction Act clean-energy tax credits also one-upped the House version. Official scores found both would reel in more than $400 billion in savings, however the Senate version went a step further. Politico and other outlets reported on an analysis by Rhodium Group that indicates new wind and solar projects would face a tax starting in 2028, raising their cost by 10% to 20%, if they source components from China.
Tesla CEO Elon Musk said the Senate bill would "destroy millions of jobs," in a Sunday post. "While it subsidizes outdated industries, it deals a severe blow to future industries." On Monday, Musk went further, threatening to create a third party to target lawmakers who back the Big Beautiful Bill.
The bill, as expected, ended the $7,500 electric vehicle tax credit.
However, a last-minute amendment killed the tax for foreign sourcing and extended the window for new projects to take advantage of IRA tax credits. That was a key in securing the vote of Alaska Sen. Lisa Murkowski. Still, Murkowski told reporters that she hopes Republicans will take their time to improve the bill, rather than have the House simply pass the Senate version.
OBBBA Budget Math
An updated score of the bill that passed the Senate isn't yet available. The prior score showed that the Senate cut a few hundred billion less than the House in food aid and student loans. That at least partly explains why the bill didn't come close to clearing the fiscal bar set by the House, which required that tax cuts exceed spending cuts by no more than $2.5 trillion over 10 years.
Based on the current law baseline, which assumes expiration of most 2017 tax cuts at the end of this year, CBO said the recent Senate version had $4.47 trillion in tax cuts and $1.21 trillion in spending cuts, raising deficits by $3.26 trillion. Based on current policy, CBO said the Senate bill would cut spending by $1.34 trillion and lower taxes by $829 billion, lowering the deficit by $508 billion.
