The last U.S. Senate committees have submitted revisions to the House-passed One Big Beautiful Bill Act, shoring up funding for big-ticket items while making further changes to Medicaid, SNAP, student loan options and more.
House committees worked for months to assemble the multitrillion-dollar budget reconciliation package implementing President Donald Trump’s tax, border, energy and defense priorities.
Senate committees have now put their stamp on the bill, most notably by raising the debt ceiling by $5 trillion rather than $4 trillion and by making key provisions from the expiring 2017 Tax Cuts and Jobs Act permanent, versus extending them for 10 years only.
As reported by The Center Square, that includes the boosted maximum standard deduction and across-the-board tax cuts; the 20% Qualified Business Income deduction; and $2,000 child tax credit, though the Senate Finance Committee reduced the House’s four-year $500 boost to $200.
Although the Finance committee keeps the House’s temporary nixing of taxes on tips and overtime, it caps deductions for tips at $25,000 and deductions for overtime at $12,500 for single filers.
The committee also expands the House’s charity deductions for un-itemized filers and the temporary tax cut for eligible seniors, boosting the senior $4,000 deduction to $6,000. As with the child tax credit, however, taxpayers would need a social security number to claim it.
Three key business tax credits would become permanent as well – full reimbursement for new capital investments like machinery and equipment, an expanded deduction for corporation’s interest on debt, and immediate deductions for companies’ research costs.
The cost of permanently extending the tax cuts will raise the OBBBA’s already enormous price tag, according to budget watchdogs. So Senate committees found even deeper savings than the House’s $1.7 trillion by further overhauling Medicaid and the Supplemental Nutrition Assistance Program.
Under the Senate plan, the amount states can tax Medicaid providers will cap at 3.5% by 2031, down from the House’s version of 6%. It softens the House’s new Medicaid work requirements, however, by exempting enrollees with dependents under the age of 14.
The Senate’s SNAP reforms expand on the House’s, which require states to cover 50% of administrative costs and 5% of their SNAP benefit cost share. But the Senate Committee on Agriculture, Nutrition and Forestry hikes the state administrative cost burden to 75%.
Additionally, under the House plan, states’ benefit cost contributions would increase the higher their payment error rates, with states having an average error rate of 10% paying 25% of SNAP benefit costs. The Senate version would exempt states with an error rate below 6% from this requirement and lower the 25% cost share cap to 15%
Financial aid and student loan repayment changes made by the House to extract more savings would see some edits as well. The Senate Health, Education, Labor, and Pensions Committee section keeps current Pell Grant eligibility standards in place, rather than keeping the House’s proposed restrictions, and proposes more limitations on graduate student borrowing.
It also keeps Subsidized Stafford loans — repealed in the House version — and scraps House changes to Income-Based Repayment for current borrowers.
Funding for homeland security and border initiatives remains disputed in the Senate’s version of the bill. The Homeland Security and Governmental Affairs committee, chaired by known fiscal hawk Sen. Rand Paul, R-Ky., allocates $39 billion in spending.
Dissatisfied with that amount, the Senate Budget Committee intervened, releasing its own border security funding package that allocates over $127 billion for border security activities.
Other changes Senate committees made include slowing phase outs of Inflation Reduction Act subsidies for energy projects, killing the House’s hard-fought quadrupling of the $10,000 SALT deduction cap, axing a proposed excise tax on private foundations, lowering a proposed 21% tax on university endowments to 8%, and relaxing licensing and registration requirements for certain guns and suppressors.
However, many House and Senate provisions could be stripped by the Senate parliamentarian in the coming weeks if they don’t meet the Senate’s Byrd rules, which limit budget reconciliation bills to fiscal matters.
