Senate Pushes Trump’s Tax and Spending Bill: Full Details on the July 4 Deadline Rush

By NRI Globe Staff | Published: June 29, 2025

The U.S. Senate is in a rare weekend session, working feverishly to meet President Donald Trump’s ambitious July 4, 2025, deadline for passing his sweeping tax breaks and spending cuts package, dubbed the “One Big Beautiful Bill.” This 940-page legislation, a cornerstone of Trump’s second-term agenda, aims to extend his 2017 tax cuts, introduce new tax breaks, and increase spending on defense and border security while slashing social programs like Medicaid and SNAP. As Republicans push to fulfill campaign promises, Democrats are raising alarms about the bill’s potential to harm healthcare access and anti-poverty initiatives. Here’s a detailed breakdown of the bill, its implications, and the political dynamics at play.

What’s in Trump’s Tax and Spending Bill?

The “One Big Beautiful Bill” is a $3.3–$4.2 trillion package that combines tax relief with significant spending adjustments. Key provisions include:

• Extension of 2017 Tax Cuts: The bill permanently extends the Tax Cuts and Jobs Act (TCJA) of 2017, which lowered tax rates, nearly doubled the standard deduction, and increased the Child Tax Credit. These provisions, set to expire in 2025, would maintain lower tax brackets and a standard deduction of $15,000 for singles and $30,000 for joint filers.
• New Tax Breaks: The legislation introduces deductions for tipped income (capped at $25,000 annually, phasing out for incomes above $150,000 for individuals or $300,000 for joint filers) and overtime pay, both effective from 2025 to 2028. It also eliminates taxes on Social Security benefits for seniors and raises the Child Tax Credit to $2,200 (Senate version) or $2,500 (House version).
• Increased Spending: The bill boosts funding for military and border security, including Trump’s proposed “Golden Dome” missile defense program and immigration enforcement, with an estimated $521 billion allocated for defense and immigration.
• Spending Cuts: To offset the $3.7–$4.8 trillion in tax breaks, the bill includes $1.3 trillion in cuts to social programs, such as:
  • Medicaid: Significant reductions, including a crackdown on “provider taxes” that could impact rural hospitals. Democrats claim these cuts could strip healthcare from 16 million people.
  • SNAP (Food Stamps): New work requirements and reduced benefits, which Democrats argue could “rip food out of the mouths of children.”
  • Green Energy Tax Credits: Scaled-back incentives, generating nearly $600 billion in savings in the House version, though some Senate Republicans push to preserve these.
  • Student Aid: Cuts worth over $300 billion, ruled non-compliant with Senate budget rules.
• State and Local Tax (SALT) Deduction: The Senate keeps the SALT cap at $10,000, while the House proposes raising it to $40,000 for taxpayers earning up to $500,000, causing friction among Republicans from high-tax states.
• Debt Ceiling Increase: A $4–$5 trillion increase to avoid a default, opposed by fiscal hawks like Senator Rand Paul.

The Congressional Budget Office (CBO) estimates that top earners could see a $12,000 tax cut, while the poorest Americans might lose $1,600 due to reduced benefits. The bill is projected to add $2.4–$4.8 trillion to the federal deficit over 10 years, despite spending cuts.

Senate’s Weekend Push and Procedural Challenges

Senate Republicans, led by Majority Leader John Thune (R-S.D.), are using a fast-track budget reconciliation process to bypass the 60-vote filibuster threshold, requiring only a simple majority to pass the bill. However, the Senate parliamentarian, Elizabeth MacDonough, has rejected $600 billion in proposed cuts (including $250 billion in Medicaid and $300 billion in student aid) for not complying with budget rules, forcing Republicans to revise the package.

A vote on the bill was scheduled for June 28, 2025, at 4 p.m., but procedural delays have pushed the timeline, with some Republicans, like Senator John Kennedy (R-LA), noting the possibility of further postponements. The Senate’s revisions include tweaks to Medicaid cuts to protect rural hospitals and adjustments to the SALT deduction to appease House Republicans.

Political Dynamics and Opposition

Republican Divisions

Despite their Senate and House majorities, Republicans face internal dissent:

• Fiscal Hawks: Senators like Rand Paul (R-KY) and Chip Roy (R-TX) demand deeper spending cuts to curb the deficit, with Paul opposing the debt ceiling increase.
• Moderates: Senators Susan Collins (R-ME) and Josh Hawley (R-MO) worry about Medicaid cuts harming rural hospitals and low-income Americans. Collins is pushing for a $100 billion fund to mitigate these impacts.
• SALT Concerns: House Republicans from high-tax states, like New York, threaten to revolt if the Senate’s $10,000 SALT cap prevails over the House’s $40,000 proposal.

After meetings with Treasury Secretary Scott Bessent and House Speaker Mike Johnson (R-LA), Republicans reached tentative agreements to resolve some disputes, but holdouts remain a challenge.

Democratic Opposition

Democrats, led by Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader Hakeem Jeffries (D-NY), are united in opposing the bill. They argue it prioritizes tax cuts for the wealthy and corporations while gutting essential programs:

• Medicaid: Senator Chris Murphy (D-CT) claims the Senate version could eliminate coverage for 16 million people and close 360 rural hospitals.
• SNAP: Jeffries called the bill “Trump’s One Big Ugly Bill,” warning it would “rip food out of the mouths of children.”
• Green Energy: Democrats criticize cuts to clean energy incentives as shortsighted.

Democrats plan to propose amendments to reverse cuts to healthcare and food aid, though their minority status limits their influence in the reconciliation process.

Trump’s Role and Public Messaging

President Trump has been vocal in rallying support, calling the bill “the ultimate codification of our agenda” during a White House event on June 26, 2025. He has urged lawmakers not to leave for recess until the bill is passed, emphasizing its role in fulfilling 2024 campaign promises like “no tax on tips” and permanent TCJA extensions. Trump has also dismissed claims of Medicaid cuts, despite Senate provisions targeting the program.

The White House, backed by Treasury Secretary Bessent, has framed the bill as protection against a “$4 trillion tax hike” if the 2017 cuts expire. However, posts on X highlight public skepticism, with critics like Senator Elizabeth Warren (D-MA) arguing that the bill prioritizes corporate tax breaks over healthcare access.

Economic and Social Impacts

Economic Projections

The Tax Foundation estimates the Senate bill could increase long-run GDP by 1.1% but reduce federal revenue by $4.7–$4.8 trillion over 10 years. The Joint Committee on Taxation (JCT) notes that spending cuts, particularly to Medicaid, are insufficient to offset the revenue loss, raising concerns about the deficit.

Social Consequences

Democrats and some economists warn that cuts to Medicaid and SNAP could exacerbate poverty and healthcare disparities. The CBO’s analysis suggests the bill disproportionately benefits high earners while reducing aid for low-income families. Conversely, Republicans argue that programs like SNAP are “riddled with waste, fraud, and abuse” and that tax cuts will stimulate economic growth.

What’s Next?

With the July 4 deadline looming, Senate Republicans are racing to finalize revisions and secure enough votes. The bill must pass the Senate, reconcile with the House version, and gain final approval in both chambers. House GOP holdouts, particularly over the SALT deduction, could delay or derail the process. If passed, the bill would mark Trump’s most significant legislative achievement in his second term, but its long-term impact on the deficit and social programs remains contentious.

Why It Matters for NRIs

For Non-Resident Indians (NRIs) with financial ties to the U.S., the bill could affect investments, remittances, and tax obligations. The extension of TCJA cuts and new deductions may benefit NRI taxpayers, particularly those with U.S.-based businesses or tipped income. However, increased tariffs proposed by Trump could impact U.S.-India trade, potentially raising costs for NRIs involved in import-export businesses. Stay tuned to NRI Globe for updates on how this legislation could shape your financial future.

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