Trump Tax Bill: Senate Changes Explained
Senate Poised to Reshape House Republican Tax and Spending Package
Updated June 01, 2025
Following House passage of a sweeping tax and spending package, the Senate is gearing up for debate, with
significant changes expected before the self-imposed July 4 deadline. The house bill, dubbed the “one Big
Gorgeous Bill Act,” makes permanent President Donald TrumpS 2017 tax cuts and introduces new tax breaks.
However, policy experts anticipate intense negotiations in the Senate, particularly concerning the state and
local tax (SALT) deduction, the child tax credit, and proposed spending cuts to programs like Medicaid and
SNAP.
Howard Gleckman, senior fellow at the Urban-Brookings Tax policy Center, anticipates considerable debate over
the Medicaid provision and othre potential revisions. The final bill is unlikely to mirror the House version
exactly.
D.C., May 22, 2025. (Kevin Dietsch/Getty Images)
Fiscal Hawks Could ‘Stop the Process’
Senate Republicans may face hurdles due to cost concerns. Sen. Ron Johnson, R-Wis., suggested some senators
might halt the bill’s progress unless President Trump commits to spending and deficit reduction. The
Congressional Budget Office previously estimated an earlier version could increase the deficit by $3.8 trillion
over the next decade.
The Senate must also adhere to the Byrd Rule,preventing the inclusion of extraneous provisions unrelated to
federal revenue or spending.Any Senate changes will require House approval, presenting another potential
challenge given the narrow Republican majority.
Gleckman said the real battle will occur when the House considers the Senate’s revisions.
A Lower ‘SALT’ Deduction limit?
The state and local tax (SALT) deduction, capped at $10,000 under the 2017 Tax Cuts and Jobs Act (TCJA),
remains a contentious issue. The House-approved bill raises the SALT limit to $40,000, phasing it out for
incomes above $500,000. However, experts predict the Senate will likely propose a lower limit.
Alex Muresianu, senior policy analyst at the Tax Foundation, said that staying closer to the current $10,000
cap seems a natural starting point for negotiations.
Child Tax Credit Could Be More Generous
The Senate might also seek to expand the child tax credit. The House bill would make permanent the $2,000
maximum credit established by the TCJA and temporarily increase it to $2,500 from 2025 to 2028.
However,some senators,including Josh Hawley,R-Mo., have advocated for a more substantial tax break.With
concerns that the House-approved tax breaks favor higher earners, there’s recognition of the need to provide
greater support for families, Gleckman said.
Gleckman added that the upcoming Senate debate on the child tax credit will be interesting to watch.
What’s next
The Senate will now begin its deliberations on the tax and spending package, with the goal of reaching a
compromise bill by July 4.Key areas of focus will include the SALT deduction, the child tax credit, and
overall spending levels. The final outcome will have significant implications for individual taxpayers and the
economy.