House vs. Senate: Decoding differences in Trump’s tax and immigration bill

The Senate has completed its review of President Donald Trump’s $3.3 trillion, 940-page agenda bill and has sent it back to the House of Representatives for further alignment before it reaches the President’s desk for approval. The bill initially passed the House with a narrow one-vote margin in late May and now requires another round of approval in the House before becoming law.

One of the significant changes made by the Senate to the legislation is the implementation of the “Byrd Bath” process, where the various measures within the bill are evaluated to ensure compliance with the strict guidelines of the budget reconciliation process. This process allows Republicans to pass Trump’s agenda on taxes, border security, energy, defense, and national debt without the need for Democratic support, as it lowers the Senate’s passage threshold from 60 to 51 votes.

Key modifications in the Senate version include provisions related to Medicaid and the debt ceiling. The bill introduces stricter work requirements for Medicaid recipients, with able-bodied, childless adults aged 18-64 required to work at least 80 hours per month to maintain benefits. Additionally, changes to the Medicaid provider tax rate were made, gradually reducing the tax rate in Medicaid expansion states from 6% to 3.5% starting in fiscal year 2028.

Regarding the debt ceiling, the Senate bill aims to raise it by $5 trillion, $1 trillion more than the House version proposed. Failure to increase the debt limit could result in a downgrade of the country’s credit rating and financial market instability, making it a priority for Trump and congressional Republicans to address.

In terms of taxes, the Senate bill offers more generous corporate tax benefits compared to the House version and makes permanent certain tax breaks introduced under Trump’s 2017 Tax Cuts and Jobs Act. The bill also includes provisions for deducting taxes on tipped wages and overtime pay, with varying limits based on income levels.

The House version contained provisions to block states from implementing their own regulations on artificial intelligence (AI), which were removed in the Senate bill following opposition from Republican senators and state governors. This change was seen as a significant win for Republican governors, President Trump’s agenda, and the American people.

Overall, the Senate’s revisions to the bill reflect a balancing act between party priorities and compliance with Senate rules. The final version will need to pass through the House once more before reaching President Trump’s desk for approval.