Senate Passes Trump’s $4.5 Trillion Tax Bill, House Faces Tight Vote Ahead
With Vice President Vance casting the tie-breaking vote, the Senate advances a deficit-heavy tax-and-spending plan championed by Trump
Table of Contents
Washington, July 1 EST: A divided Senate gave the green light to former President Donald Trump’s $4.5 trillion tax-and-spending package early Tuesday, sending a politically loaded, fiscally lopsided bill back to the House with little margin for error.
The legislation passed 51–50, with Vice President J.D. Vance breaking the tie after more than 20 hours of procedural slog. On paper, the bill extends key parts of the 2017 tax law and adds targeted breaks for working-class earners. But behind the curtain, it’s also a sweeping rollback of safety-net spending—and a deficit time bomb.
Tax Cuts, Yes—But at a Price
This isn’t a tax reform bill in the classic sense. It’s an aggressive extension of the Trump-era tax cuts, bolstered by new carveouts aimed at politically sympathetic groups: tipped workers, seniors, and anyone clocking overtime. It’s not hard to see the election-year calculus behind it.
According to Reuters, the tax provisions alone carry a price tag of up to $4.5 trillion over ten years. There’s no attempt at full offset. Instead, lawmakers shaved roughly $1.2 trillion from Medicaid and SNAP, mainly through state block grants and tougher work rules.
On net, the Congressional Budget Office says the plan would add $3.3 trillion to the deficit by 2035. For context: that’s more than the Inflation Reduction Act was supposed to save, wiped out in a single vote.
Republican Unity—Just Barely
The Senate vote followed the party script, with Collins (ME), Paul (KY), and Tillis (NC) breaking ranks. That left the chamber deadlocked until Vance stepped in—a procedural necessity, but also a symbolic show of loyalty to Trump’s post-presidential agenda.
The margin wasn’t the only thing tight. Senator Lisa Murkowski reportedly held out until GOP leaders added rural hospital funding, a nod to how surgical the math had become. Every vote was priced and negotiated like a late-stage merger deal.
Meanwhile, House Republicans are preparing for their own razor-thin vote. The original version passed 215–214, and some in the Freedom Caucus are pushing for even deeper cuts, while a few swing-district moderates are skittish about gutting Medicaid this close to November.
Fiscal Conservatism Meets Political Theater
To understand this bill, forget the usual tax-and-spend framing. It’s a political document with economic consequences. The tax side is heavy on short-term wins and light on structural fixes. The spending cuts hit politically marginal programs—ones that don’t register much unless you’re in a state Medicaid office or living below the poverty line.
From a market perspective, the bill doesn’t materially change growth forecasts. But it could complicate future deficit reduction efforts or any real conversation about long-term entitlements. Once you cut $1.2 trillion from Medicaid to fund tax breaks, the math for Social Security or Medicare reform gets even harder.
This is less Reaganomics, more base-driven budgeting.
Trump’s Shadow, Biden’s Dilemma
Trump celebrated the Senate win on Truth Social, calling it “music to my ears” and signaling that the House “must finish the job.” That’s as much a warning shot as it is a victory lap.
For President Biden, the timing is awkward. The White House hasn’t confirmed whether he’ll sign the bill if it clears the House—but vetoing a package with middle-class tax breaks carries its own risks. Doing so before July 4, in the heat of a reelection campaign, could give Trump the populist edge he’s chasing.
What’s Next: House Vote and Final Stretch
The House is expected to vote Wednesday, July 2. If the Senate’s changes are accepted without amendment, the bill heads to Biden’s desk. If the House tweaks anything—especially on Medicaid—the reconciliation dance begins again.
With just days to go before Congress leaves town for the holiday, GOP leadership is working the phones. The margins are so thin that a single no-show or switch could send the whole thing back to square one.
But if they pull it off, Republicans won’t just be extending Trump’s economic legacy—they’ll be reshaping the federal budget for a generation, with deficits to match.
New Jersey Times Is Your Source: The Latest In Politics, Entertainment, Business, Breaking News, And Other News. Please Follow Us On Facebook, Instagram, And Twitter To Receive Instantaneous Updates. Also Do Checkout Our Telegram Channel @Njtdotcom For Latest Updates.
