The proposal approved by the Chamber establishes tax cuts, defense and border protection spending; Senate begins to discuss text this Friday (27.jun)
The Senate of the United States begins to vote on Friday (27.jun.2025) the “great and beautiful” bill of the president (Republican Party). To be approved, the proposal needs a simple majority of 51 votes.
The bill was able to advance quickly thanks to the budget reconciliation process. The mechanism allows to circumvent Senate obstruction, which requires 60 votes for a proposal to be voted in plenary. This way, the project can go straight to simple majority vote, 50% plus 1.
Republican senators, despite having a majority with 53 chairs ,. Most president John Thune will start discussing the project in plenary, but should hold the vote until the party can change the proposal. The idea is to please senators and get the necessary votes for approval.
Trump’s proposal in its current phase, has 1,116 pages and covers a large amount of constitutional changes that start from the promises of the Republican during the 2024 campaign. The approved text covers measures ranging from tax cuts and social programs to tanning tax exemption. This is the document (PDF – 2 MB).
Despite the version of the House, the Senate published on June 16 an update of the project with changes that should decrease the accumulation of the deficit by 10 years.
Here are the main points of the bill:
Extension and Tax Cuts
It is the main proposal between the changes in federal taxes. One of the first actions in this sector is to permanently extend the Tax Cuts and Jobs ACT (Tax and Jobs Law, free translation).
The measure, from Trump’s 1st term, cut off the federal corporate tax from 35% to 21% and increased tax exemption for people from $ 6,500 to $ 12,000.
In the Chamber approved by the House, all benefits remain maintained and new cuts were added, such as tips, overtime and the end of car financing interest rate – this last was taken from the Senate version.
The law will still have an additional $ 1,000 for 4 years. In total, people who declare income less than $ 16,000 will not pay any tax. The extent of taxes mainly benefits the middle class, which earns a monthly income of less than $ 16,000 and will not pay taxes.
The lower class will not receive an advantage, as it is already exempt from taxes, while citizens with the highest income may benefit from the increase in exemption on inheritance – which will rise to $ 15 million.
The measure should add, according to the Congress Budget Office (CBO) about $ 1.8 trillion to the public deficit in 10 years.
Defense and Frontier Expenses
Trump’s “great and beautiful” project proposes a US $ 150 billion direction for military and border investments.
Of the total, US $ 20 billion will be destined for the Army expenses – which includes new missiles and modernization of systems – and US $ 130 billion for the construction of new barriers on the Mexico border, illegal immigrant detention centers and the transportation sector.
State tax deduction
In addition to the exemption for federal taxes, Trump’s proposal also aims to increase the amount that US citizens can stop paying state taxes in the federal statement. SALT (state and local tax deduction in English) is a mechanism that allows us to use state tax money as a discount on federal tax.
Before, the limit was $ 10,000 off. In the new proposal, it is $ 20,000. If the citizen has annual income greater than $ 400,000, the deduction begins to be reduced by 20% of the surplus.
Health cuts
If the project is approved, the US government will fail to raise a large amount of tax accounts for tax cuts. To cover part of this loss, the text proposes reductions in the health budget and food programs.
Medicaid, a health care program for low -income people, will have new eligibility criteria that, in practice, will reduce the amount of registered and government spending on the system.
From 2027, for example, states should revise the eligibility of adults in the program semi -annually. The proposal also establishes that registrants must meet work requirements, study or volunteering as a condition to maintain coverage.
To apply for long -term treatment at Medicaid, the citizen must have a property of a maximum of US $ 1.03 million. The project proposes to reduce this limit to $ 500 million, reducing the number of people eligible.
To please republican congressmen who oppose the cuts, the requirements to enter the program will be postponed to 2031. In the text of the House, it was scheduled to start in 2029.
According to a text in the White House, the changes are aimed at “Eliminate waste, fraud and abuse by ending the benefits to at least 1.4 million illegal immigrants who are circumventing the system.”.
