KEY TAKEAWAYS:
- The Senate is moving swiftly toward a procedural vote on President Donald Trump’s 2025 spending bill.
- Last-minute additions and changes offer big benefits to businesses, investors, and certain lawmakers.
- Uncertainty remains over whether the House will approve the Senate version ahead of the July 4 GOP deadline.
Trump’s 2025 Spending Bill Nears Senate Vote Amid Last-Minute Tax and Policy Changes
President Donald Trump’s highly anticipated 2025 spending package — dubbed by Republicans as the “big, beautiful bill” — is nearing a critical Senate vote following intense behind-the-scenes negotiations. Finalized just before midnight Friday, the 940-page bill includes sweeping tax reforms, entitlement revisions, and key policy provisions that could reshape U.S. fiscal policy for years to come.
Senate Majority Leader John Thune aims to bring the bill to the floor for a procedural vote as early as Saturday, despite pushback from some fiscal conservatives over the bill’s proposed $5 trillion debt ceiling increase.
With a razor-thin Republican majority, the outcome remains uncertain — and the House has yet to signal whether it will pass the Senate’s version before the self-imposed July 4 deadline.
Key Elements of Trump’s 2025 Budget Bill — And Who Benefits Most
Extension of Trump’s 2017 Tax Cuts
The Senate bill locks in several of Trump’s signature 2017 tax reforms, including:
- Lower income tax brackets
- A higher standard deduction
- An expanded Child Tax Credit
- New deductions for tip income, overtime pay, and auto loans
- A bonus deduction for older Americans to offset Social Security income taxes
Note: Most new provisions are temporary, expiring between 2025 and 2028, which could impact 2026 tax filings.
According to the Tax Policy Center, the Senate bill would slash household taxes by an average of $2,600 in 2026 — slightly less than the House proposal. However, both versions heavily favor upper-income earners.
Removal of the “Revenge Tax” (Section 899)
Wall Street scored a major win after the controversial Section 899, or “revenge tax,” was dropped. The provision would have imposed retaliatory taxes on foreign entities from countries deemed to have discriminatory tax policies.
Treasury Secretary Scott Bessent confirmed the removal, citing international coordination with G7 allies to protect U.S. interests without harming foreign investment.
Changes to the SALT Deduction Cap
The bill revises the State and Local Tax (SALT) deduction cap:
- Raises the deduction cap to $40,000 starting in 2025
- Phases out the deduction for income above $500,000
- Cap increases 1% annually through 2029, then reverts to $10,000 in 2030
Importantly, pass-through business entities retain access to the SALT workaround — a key win for high-earning professionals and business owners.
Critics argue that the changes benefit wealthy taxpayers while maintaining loopholes for the ultra-rich.
Deep Cuts to Medicaid and New Work Requirements
Despite some provisions being struck down by the Senate parliamentarian, the bill maintains significant cuts to Medicaid, including:
- Mandatory work requirements of 80 hours/month
- Potential loss of coverage for millions of low-income Americans, per Congressional Budget Office (CBO) estimates
Medicaid, which provides healthcare to over 70 million Americans, remains a battleground issue in the spending debate.
Targeted Industry Carve-Outs
The bill includes a series of special-interest provisions, such as:
- Increasing the tax deduction for whale-hunting expenses from $10,000 to $50,000 — a direct benefit to Alaska’s senators and local industries.
- Maintaining the SALT workaround for businesses, despite calls for reform.
Elimination of the $7,500 EV Tax Credit
In a blow to automakers and clean energy advocates, the Senate version accelerates the elimination of the federal electric vehicle tax credit:
- $7,500 EV tax credit ends on September 30, 2025
- Earlier than proposed in previous drafts
This move could slow EV adoption and impact consumer purchasing decisions in late 2025 and beyond.
What’s Next for Trump’s 2025 Spending Bill?
Senate GOP leadership is racing to pass the bill before Independence Day, but House approval remains in question. With the clock ticking, lobbying from all sides — from Wall Street to Main Street — is expected to intensify in the coming days.
The bill’s potential to reshape tax policy, entitlement programs, and climate incentives makes it one of the most consequential pieces of legislation in years.
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