The Big Beautiful Bill narrowly passed a crucial hurdle as Republican Senate leaders worked overtime to pass the spending and tax bill before President Donald Trump’s July 4 deadline.
After hours of stalled voting and negotiations, the motion was passed with a 51-49 vote.
Vice President JD Vance was present at the Capitol, prepared to cast a tie-breaking vote if needed. Two Republicans joined all Senate Democrats in opposition by voting against the motion.
940-page “Big Beautiful Bill” legislation was released just before midnight on Friday. The bill would return to the House for final approval before heading to the White House if passed by the Senate.
What Is Big Beautiful Bill About?
Bill Proposes Social Security Tax Breaks for Seniors
President Trump, during his campaign, promised to eliminate taxes on Social Security income. However, the issue is not fully addressed in the bill.
The White House version of the bill temporarily raises the standard deduction by up to $4,000 for individuals aged 65 and older between 2025 and 2028. However, the bill doesn’t completely remove the tax. The Senate bill proposes a $6,000 tax deduction for older Americans.
Big Beautiful Bill on Medicaid Rules
Both versions of the Big Beautiful Bill introduce significant changes to Medicaid. The bill proposes changes to the new work requirement for childless adults without disabilities. Medicaid is a health program in the US used by millions of low-income, elderly, and disabled people.
Among the proposed changes is a new work requirement for childless adults without disabilities. Starting December 2026, these individuals must work at least 80 hours per month to qualify for benefits.
Under the new bill, Medicaid re-enrollment is needed every six months instead of annually. It also proposes stricter income and residency verification.
Big Beautiful Bill Proposes Higher Cap on SALT Tax Deductions
The state and local tax (SALT) deduction in the bill has been a point of contention among lawmakers from high-tax states. This provision has also seen a revision in the bill.
Currently there is a $10,000 cap on federal tax deductions for SALT. It was established under the 2017 Trump-era law and is set to expire this year. The House bill raises this cap on federal tax deductions for SALT to $40,000 for married couples earning up to $500,000. The Senate has agreed to match the House proposal, but only through 2030.
SNAP Program Reforms in Big Beautiful Bill
The Supplemental Nutrition Assistance Program (SNAP), which helps over 40 million low-income Americans buy food, is also facing changes.
Under the Big Beautiful Bill, states would be required to contribute more to SNAP funding. Also, able-bodied adults without dependents would face work requirements to remain eligible for benefits.
Tax Reforms in Big Beautiful Bill
Trump had promised several tax reforms during his campaign and the Big Beautiful Bill includes several of those promises, including the provision to end federal taxes on overtime and tips.
The bill also allows Americans to deduct interest on car loans, but only on those manufactured in the US.
The child tax credit in the House version sees a raise from $2,000 to $2,500 through 2028. The Senate has also suggested a permanent increase to $2,200. It required only one parent to have a Social Security number.
The national debt ceiling is also being addressed by both chambers. While the House version proposes a $4 trillion increase, Senate Republicans seek to raise it by $5 trillion.
Big Beautiful Bill on Clean Energy Tax Credit
Both White House and Senate versions aim to eliminate Biden-era clean energy tax credits. However, the Senate Republicans favor a slower phase-out. It allows companies involved in solar and wind farm construction more time to benefit from existing credits.
