Key Provisions and Senate Appeal
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Tax Cuts: Permanently extends the 2017 Tax Cuts and Jobs Act (TCJA) provisions, including individual income tax rates (37% top rate) and a doubled standard deduction, preventing a $7.7 trillion tax hike if they expired in 2025, per the Tax Foundation. It adds temporary cuts (2025–2028): a $2,000 standard deduction increase ($32,000 for joint filers), a $2,500 child tax credit (up from $2,000), a $1,000 newborn credit, and no taxes on tips, overtime pay (excluding high earners), and auto loan interest, costing $3.8 trillion, per PBS. It raises the state and local tax (SALT) deduction cap to $40,000 for incomes under $500,000, per CNBC, and restores 100% bonus depreciation and R&D expensing, saving businesses $1.2 trillion, per Tax Foundation.
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Spending Cuts: Reduces Medicaid by $700 billion and SNAP by $267 billion over a decade through work requirements (starting 2027 for Medicaid, age 64 for SNAP) and cost-shifting to states (5% of SNAP benefits, 75% of administrative costs), per CBO and PBS. It eliminates Inflation Reduction Act (IRA) clean energy credits, saving $500 billion, per Tax Foundation.
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Border Security: Allocates $50 billion for border wall construction, $45 billion for ICE detention, $14 billion for deportation operations, and funds for 10,000 ICE agents and 4,100 Border Patrol agents, targeting 1 million annual deportations, per The Guardian.
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Other Provisions: Introduces “Trump Accounts” with a $1,000 federal deposit for children’s education or homeownership, doubles health savings account (HSA) limits for low earners, and adds $12.5 billion for FAA modernization, per CNBC and White House statements.
Deficit Analysis
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CBO Estimate: The CBO estimates the bill adds $3.8 trillion to the deficit from 2025–2034, primarily from tax cuts ($4.9 trillion cost), partially offset by $1.6 trillion in savings ($700 billion from Medicaid, $267 billion from SNAP, $500 billion from IRA repeals), per CBO and The Guardian. The lowest 10% of earners see reduced resources, while the top 10% gain, per CBO’s distributional analysis.
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Tax Foundation: Projects a $4.1 trillion revenue loss conventionally, or $3.3 trillion dynamically (accounting for 0.6% GDP growth), increasing deficits by $3.3–$4.0 trillion before interest costs, per Tax Foundation.
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CRFB: Estimates a $3.2–$4.1 trillion deficit increase, with a worst-case scenario of $5.3 trillion if temporary tax cuts are extended, per CRFB.
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Penn Wharton: Forecasts a $3.3 trillion deficit hike, with 0.5% GDP growth over 10 years, per Yahoo Finance.
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Moody’s Downgrade: Moody’s downgraded the U.S. AAA rating in May 2025, citing the bill’s deficit impact and Trump’s tariffs, with debt interest payments exceeding defense spending ($1 in every $7 spent), per CNN and TIME.
The White House claims $1.6 trillion in savings, with Press Secretary Karoline Leavitt asserting the bill “does not add to the deficit,” citing economic growth from tax cuts, tariffs, and deregulation, per Yahoo Finance and White House statements. However, the 2017 TCJA’s failure to pay for itself (reducing revenue, per CRFB) and low tariff revenue ($17 billion in April 2025, 3% of receipts) undermine these claims, per Yahoo Finance. Posts on X from
Senate Prospects: Challenges and Dynamics
1. GOP Divisions
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Fiscal Hawks: Sens. Ron Johnson (WI), Rand Paul (KY), Mike Lee (UT), and Rick Scott (FL) oppose the bill’s deficit increase, with Johnson predicting enough allies to “stop the process” unless spending cuts deepen, per Axios and ABC News. Johnson advocates pre-pandemic spending levels (20.6% of GDP, $6.47 trillion in FY2026, saving $8.4 trillion over a decade), criticizing the bill’s “wimpy” $1.6 trillion savings, per his Senate website. Paul opposes the $5 trillion debt ceiling hike, calling cuts “anemic,” per ABC News.
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Moderates: Sens. Susan Collins (ME) and Lisa Murkowski (AK) may resist Medicaid cuts, projected to strip coverage from 8.7–14 million by 2034, and SNAP reductions affecting 11 million, per CBO and Center for American Progress. Collins, who voted against TCJA in 2017, may demand softer cuts, per The American Prospect.
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Blue-State Republicans: The $40,000 SALT cap benefits high-tax state senators like Shelley Moore Capito (WV), but moderates may seek further concessions, per PBS.
2. Proposed Senate Changes
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Deeper Spending Cuts: Johnson and Paul push for larger Medicaid and SNAP reductions or eliminating IRA subsidies immediately, not phased to 2031, per Tax Foundation and X post by @chiproytx
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Debt Ceiling Separation: Paul and others want the $5 trillion debt ceiling hike addressed separately, per ABC News.
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Permanent Tax Cuts: Extending temporary provisions (tips, overtime) beyond 2028, though this could add $1.5 trillion to deficits, per CRFB.
3. Reconciliation Constraints
4. Political Pressures
Likelihood of Senate Passage
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Passage with Changes (Most Likely): Thune and Crapo may secure 50 votes by splitting the bill or softening Medicaid/SNAP cuts, satisfying moderates like Collins while offering fiscal hawks symbolic wins (e.g., faster IRA repeal). The revised bill would return to the House, risking another tight vote, per U.S. News.
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Stall or Failure (Moderate Risk): If Johnson, Paul, Lee, Scott, and moderates like Collins and Murkowski defect, the bill could stall, forcing a smaller package or delay past July, per Axios. Paul’s debt ceiling stance and Johnson’s deficit focus could derail it, per ABC News.
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As-Is Passage (Unlikely): Passing the House version unchanged is improbable, as at least four senators (Johnson, Paul, Lee, Scott) oppose it, and moderates demand tweaks, per The American Prospect.
Our Perspective
The bill’s TCJA extension, business tax relief, and $50 billion border security investment are vital for economic growth and national security, fulfilling Trump’s mandate, per White House and House Budget Committee. The 0.5–0.6% GDP boost, per Penn Wharton and Tax Foundation, supports GOP claims of prosperity, but the $3.2–$5.3 trillion deficit increase contradicts fiscal conservatism, echoing Sen. Johnson’s call for pre-pandemic spending, per his Senate website. Medicaid and SNAP cuts, while curbing “entitlements,” risk alienating voters, with 14 million potentially uninsured, per Center for American Progress. The SALT cap hike and Trump Accounts are populist wins but add complexity, per CNBC.
The Senate must balance Trump’s agenda with fiscal discipline to avoid midterm backlash, per The Washington Post. Splitting the bill or prioritizing tax cuts and border security could secure passage while addressing deficit concerns, though fully satisfying fiscal hawks like Johnson is unlikely.