What’s in the Senate’s version of Trump’s ‘big beautiful bill’? Tax cuts, Medicaid changes, immigration and more

WASHINGTON — President Donald Trump’s sweeping domestic policy package that’s moving through the Senate would affect virtually every American, overhauling tax, health care and energy policy.

It renews the tax cuts Trump signed into law in his first term and pays for them in part with steep cuts to Medicaid, food aid programs and clean energy funding.

But the sprawling package — which is likely to face substantial changes before a final vote in the Senate — also touches on a range of other policy issues, from artificial intelligence and space exploration to immigration.

According to the latest projection from the nonpartisan Congressional Budget Office, over the next 10 years, the legislation would cause revenues to decrease by about $4.5 trillion while cutting spending by $1.2 trillion, increasing the national debt by $3.3 trillion.

Here’s what’s in the current version of the bill. All cost and savings estimates are from the new CBO analysis and cover a 10-year period.

Tax cuts

What it would do: Republicans are seeking to permanently extend the tax rates Trump signed into law in 2017, which are set to expire at the end of the year.

Projected cost: $4 trillion.

State and local tax deduction (SALT)

What it would do: This provision, demanded by House Republicans who hail from high-tax blue states, would allow people to deduct up to $40,000 per year for five years from their federal taxes. The SALT deduction would phase out once an individual’s annual income hits $500,000. As part of the compromise with Senate Republicans, the cap would go back to $10,000 per year after five years.

Projected cost: $142 billion, according to Senate Budget Committee staff members.

No tax on tips, overtime and car loans

What it would do: The bill would exempt tips and overtime pay from federal income taxes, fulfilling two of Trump’s campaign promises. It would also allow taxpayers to deduct up to $10,000 of auto loan interest for U.S.-made vehicles.

The bill also features a temporary tax break of $6,000 for seniors that phases down as income increases.

Projected cost: $150 billion.

Child tax credit

What it would do: Senate Republicans want to permanently increase the annual child tax credit to $2,200. House Republicans have proposed bumping it to $2,500 but scaling back to $2,000 after 2028.

Projected cost: Estimates vary, but it would most likely cost hundreds of billions of dollars.

Immigration enforcement

What it would do: The package would provide Customs and Border Patrol with $46.5 billion to build the border wall and associated infrastructure, like access roads, cameras, lights and sensors. The package also includes $2 billion for the Department of Homeland Security and $29.9 billion for Immigration and Custom Enforcement.

Projected cost: Around $150 billion.

Military funding increase

What it would do: The bill includes $25 billion for a “Golden Dome” missile defense system, $29 billion for shipbuilding and $15 billion for nuclear deterrence, among other provisions.

Projected cost: $153 billion.

Medicaid cuts

What it would do: Republicans targeted the Medicaid program, which 72 million people rely on for health coverage, by instituting work requirements of 80 hours per month for able-bodied adults under age 65, with exceptions including for parents of children under 14.

The Senate goes further than the House did in restricting state-levied fees on health care providers that are primarily used to fund Medicaid, especially in underserved communities. Under the new change, the federal government would not be on the hook to reimburse states, and it would require many states to lower their existing rates. That would also affect the 41 states that voted to expand Medicaid under the Affordable Care Act.

Projected savings: $930 billion.

Medicare and Affordable Care Act cuts

What it would do: The “waste, fraud and abuse” Republicans say they targeted in Medicaid affected other health care safety net programs like Medicare and the Affordable Care Act.

Projected savings: $170 billion.

SNAP benefit cuts

What it would do: Republicans would institute more work requirements for people who rely on the Supplemental Nutrition Assistance Program, or food stamps. Able-bodied adults under age 65 would be required to work 80 hours per month with exceptions for those with children under 10.

Projected savings: $285 billion.

Rollback of clean energy tax credits

What it would do: The bill would roll back tax credits under the Inflation Reduction Act that President Joe Biden signed into law, including for clean vehicles and electricity. That includes a last-minute total repeal of federal subsidies to wind and solar industries unless the projects were placed in service before the end of 2027. An additional tax would be phased in depending upon how much of the products are manufactured in China.

The Senate’s bill went even further than the version the House passed, despite complaints from some Republicans. They also added a tax incentive for coal production.

Projected savings: $488 billion.

Artificial intelligence

What it would do: The bill would effectively bar states from making their own rules for artificial intelligence for 10 years as a condition for receiving federal broadband expansion funds.

It also includes a carveout for laws related to unfair or deceptive acts or practices, child online safety, child sexual abuse material, rights of publicity and protection of a person’s name, image, voice or likeness.

Projected cost: The provision adds $25 million to an existing $500 million bucket for AI deployment.

Space program funding

What it would do: The bill includes a grab bag of funds for space programs, including $10 billion for Mars mission priorities, $325 million to held de-orbit the International Space Station and $85 million to take the space shuttle from the National Air and Space Museum in the Virginia suburbs of Washington and transport it to Texas.

Projected cost: $10 billion for Mars, $325 million for space station de-orbiting and $85 million for the space shuttle move.

Private college endowment tax

What it would do: The legislation would establish a new excise tax on investment income from endowments for colleges with more than 3,000 students: 8% for the wealthiest colleges and 4% and 1.4% for colleges with smaller endowments.

Projected savings: $761 million.

Defunding Planned Parenthood

What it would do: The legislation would cut off Medicaid funding for entities that provide abortions (except in rare cases like rape and incest), seeking to fulfill a long-standing conservative goal of defunding Planned Parenthood.

Projected cost: $52 million.

Debt ceiling hike

The package includes a $5 trillion increase in the debt ceiling, which is more than the $4 trillion in the House-passed package.