Senate Republicans are grappling with a complex web of issues as they attempt to finalize their ‘big, beautiful bill,’ a major legislative package spanning tax and healthcare reforms. The bill has stalled due to unresolved disputes over key provisions, including tax measures and Medicaid policies, as well as the need to conform to strict reconciliation rules. Senate Parliamentarian Elizabeth MacDonough is currently reviewing the bill, and her rulings could determine whether certain provisions pass under the budget rules the Republicans intend to use to pass the bill on party lines. GOP leaders, including Majority Leader John Thune, remain confident that the bill will eventually be passed, but their optimistic projections are tempered by uncertainty about when it will reach the Senate floor.
A significant challenge has emerged around the state-and-local-tax (SALT) deduction, a central feature of the tax provision. While House Republicans have agreed to freeze the current $40,000 cap, many Senate Republicans are pushing to modify the income threshold at which the deduction begins to phase out. This change has sparked a rift between House and Senate GOP members, with several senators expressing skepticism about the feasibility of such modifications without facing further obstacles in the House. Despite these divisions, the party’s leadership, particularly Sen. Markwayne Mullin, has been working to broker a compromise by presenting potential options, though it remains unclear if these will lead to a resolution soon enough to meet the Republicans’ July 4 deadline.
Medicaid policy is another area of contention, as Republican leaders aim to align their proposals with the House’s original blueprint. One key issue is the federal government’s share of Medicaid costs under the 2010 expansion, which the Senate is currently following the House’s lead on preserving but not altering. Sen. Josh Hawley has expressed concern about the potential financial impact on states, with some senators suggesting the inclusion of a fund to offset rural hospital costs. However, the details of the fund remain uncertain, and the Senate has yet to provide clarity on its mechanisms or financial implications.
Procedural hurdles remain another critical factor in the delay. MacDonough’s rulings have already affected the bill’s timeline, as several provisions, including a cost-sharing plan for food-aid, have been deemed non-compliant with reconciliation rules. While the Senate Agriculture Committee is attempting to salvage the plan with minor adjustments, it remains unclear whether these efforts will succeed. Additionally, the Senate’s plan to overhaul the federal rulemaking process, spearheaded by Sen. Mike Lee, has also been ruled out, further complicating the bill’s path to passage. These procedural and substantive issues highlight the deepening challenges facing Senate Republicans, even as they press on to meet their legislative goals.
Political and financial stakes are high, as the final outcome of this bill could have far-reaching implications. Senate conservatives, including influential figures like Rep. Andy Harris, have expressed concerns about the bill’s adequacy as a spending cut measure, and they fear it may face significant resistance in the House, particularly if the Senate maintains its current provisions. The need for rapid resolution of these disputes underscores the high-stakes environment in which Senate Republicans are operating, with the potential to influence both the trajectory of the current fiscal year and the broader political landscape ahead. As the clock continues to tick, the fate of the megabill remains in flux, with its timeline and content still under intense scrutiny by all parties involved.