Senate Republicans Propose Major Changes to Trump Tax-Cut Bill, Spark House Conflict

Senate Republicans have introduced significant revisions to President Donald Trump's expansive tax-cut and spending bill, aiming to make key business tax breaks permanent while imposing a $10,000 cap on state and local tax (SALT) deductions, a move that has sparked backlash from House Republicans representing high-tax districts. The Senate proposal also limits tax breaks on tipped and overtime income more tightly than the House version, which had allowed higher deductions. The bill includes sweeping tax cuts by extending the 2017 tax rate cuts permanently and introduces incentives for domestic investment, while also making modifications to Medicaid reforms, including easing restrictions on provider taxes used by states. These changes contrast with the House bill, which proposed higher SALT deductions and a larger child tax credit, setting the stage for conflict between the two chambers as they attempt to reconcile their versions ahead of a July 4 deadline. Senate Republicans emphasize that the bill prevents a major tax increase, providing relief to middle-class families and businesses, yet Democrats and some industry groups oppose the bill’s deep Medicaid cuts and impact on renewable energy programs. The legislation remains uncertain as negotiations continue in an increasingly divided Congress.