Trump's proposed $3.8 trillion bill heads to Senate. Here's what's in it
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Senators were working through the weekend to pass the bill and send it back to the House for a final vote. Democrats are united against it.

WASHINGTON, D.C., USA — The 940-page legislation is a comprehensive compilation of tax incentives, spending reductions, and other Republican priorities, including additional funding for national defense and deportations. The task now falls to Congress to determine if President Donald Trump’s key domestic policy initiative will be enacted into law.

Trump told Republicans, who hold majority power in the House and Senate, to skip their holiday vacations and deliver the bill by the Fourth of July.

Senators were working through the weekend to pass the bill and send it back to the House for a final vote. Democrats are united against it.

Here’s the latest on what’s in the bill. There could be changes as lawmakers negotiate.

Tax cuts are the priority

Republicans argue that the bill is essential due to a substantial tax hike looming after December, when the tax benefits from Trump’s first term are set to expire. The legislation proposes approximately $3.8 trillion in tax cuts.

Under the bill, the current tax rates and brackets would become permanent. It would also temporarily introduce new tax breaks that Trump advocated for during his campaign: no taxes on tips, overtime pay, or certain car loans, along with a larger $6,000 deduction in the Senate draft for seniors earning no more than $75,000 annually.

It would boost the $2,000 child tax credit to $2,200 under the Senate proposal. Families at lower income levels would not see the full amount.

A cap on state and local deductions, called SALT, would quadruple to $40,000 for five years. It’s a provision important to New York and other high tax states, though the House wanted it to last for 10 years.

There are scores of business-related tax cuts.

The wealthiest households would see a $12,000 increase from the legislation, which would cost the poorest people $1,600 a year, according to the nonpartisan Congressional Budget Office analysis of the House’s version.

Middle-income taxpayers would see a tax break of $500 to $1,500, the CBO said.

Money for deportations, a border wall and the Golden Dome

The bill would provide some $350 billion for Trump’s border and national security agenda, including $46 billion for the U.S.-Mexico border wall and $45 billion for 100,000 migrant detention facility beds, as he aims to fulfill his promise of the largest mass deportation operation in U.S. history.

Money would go for hiring 10,000 new Immigration and Customs Enforcement officers, with $10,000 signing bonuses and a surge of Border Patrol officers, as well. The goal is to deport some 1 million people per year.

The homeland security secretary would have a new $10 billion fund for grants for states that help with federal immigration enforcement and deportation actions. The attorney general would have $3.5 billion for a similar fund, known as Bridging Immigration-related Deficits Experienced Nationwide, or BIDEN, referring to former Democratic President Joe Biden.

To help pay for it all, immigrants would face various new fees, including when seeking asylum protections.

For the Pentagon, the bill would provide billions for ship building, munitions systems, and quality of life measures for servicemen and women, as well as $25 billion for the development of the Golden Dome missile defense system. The Defense Department would have $1 billion for border security.

How to pay for it? Cuts to Medicaid and other programs

To help partly offset the lost tax revenue and new spending, Republicans aim to cut back some long-running government programs: Medicaid, food stamps, green energy incentives and others. It’s essentially unraveling the accomplishments of the past two Democratic presidents, Biden and Barack Obama.

Republicans argue they are trying to rightsize the safety net programs for the population they were initially designed to serve, mainly pregnant women, the disabled and children, and root out what they describe as waste, fraud and abuse.

The package includes new 80-hour-a-month work requirements for many adults receiving Medicaid and food stamps, including older people up to age 65. Parents of children 14 and older would have to meet the program’s work requirements.

There’s also a proposed new $35 co-payment that can be charged to patients using Medicaid services.

Some 80 million people rely on Medicaid, which expanded under Obama’s Affordable Care Act, and 40 million use the Supplemental Nutritional Assistance Program. Most already work, according to analysts.

All told, the CBO estimates that under the House-passed bill, at least 10.9 million more people would go without health coverage and 3 million more would not qualify for food stamps.

The Senate proposes a $25 billion Rural Hospital Transformation Program to help offset reduced Medicaid dollars. It’s a new addition, intended to win over holdout GOP senators and a coalition of House Republicans warning that the proposed Medicaid provider tax cuts would hurt rural hospitals.

Both the House and Senate bills propose a dramatic rollback of the Biden-era green energy tax breaks for electric vehicles. They also would phase out or terminate the various production and investment tax credits companies use to stand up wind, solar and other renewable energy projects.

In total, cuts to Medicaid, food stamps and green energy programs would be expected to produce at least $1.5 trillion in savings.

Trump savings accounts and so, so much more

A number of extra provisions reflect other GOP priorities.

The House and Senate both have a new children’s savings program, called Trump Accounts, with a potential $1,000 deposit from the Treasury.

The Senate provided $40 million to establish Trump’s long-sought “National Garden of American Heroes.”

There’s a new excise tax on university endowments. A $200 tax on gun silencers and short-barreled rifles and shotguns was eliminated. One provision bars money to family planning providers, namely Planned Parenthood, while $88 million is earmarked for a pandemic response accountability committee. Another section expands the Radiation Exposure Compensation Act, a hard-fought provision from Sen. Josh Hawley of Missouri, for those impacted by nuclear development and testing.

Billions would go for the Artemis moon mission and for exploration to Mars.

The bill would deter states from regulating artificial intelligence by linking certain federal AI infrastructure money to maintaining a freeze. Seventeen Republican governors asked GOP leaders to drop the provision.

Additionally, a provision would increase the nation’s debt limit, by $5 trillion, to allow continued borrowing to pay already accrued bills.

What’s the final cost?

Altogether, keeping the existing tax breaks and adding the new ones is expected to cost $3.8 trillion over the decade, the CBO says in its analysis of the House bill. An analysis of the Senate draft is pending.

The CBO estimates the House-passed package would add $2.4 trillion to the nation’s deficits over the decade.

Or not, depending on how one does the math.

Senate Republicans are proposing a unique strategy of not counting the existing tax breaks as a new cost because those breaks are already “current policy.” Senators say the Senate Budget Committee chairman has the authority to set the baseline for the preferred approach.

Under the Senate GOP view, the tax provisions cost $441 billion, according to the congressional Joint Committee on Taxation.

Democrats and others say this is “magic math” that obscures the true costs of the GOP tax breaks. The Committee for a Responsible Federal Budget puts the Senate tally at $4.2 trillion over the decade.

Copyright 2025 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.     

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