The US Senate narrowly passed President Donald Trump’s massive tax and spending bill on Tuesday after a marathon voting session on intense negotiations and amendments.
Still facing a challenging path to final approval in the House of Representatives, the bill imposes deep cuts on general health and nutrition programs, among other measures, and offers a $4.5 trillion tax cut.
The measure was approved after almost 48 hours of discussion and a battle of amendment.
Here’s what you need to know:
What is Trump’s “big and beautiful bill”?
The bill is a law that combines tax cuts, defense and hiking spending on border security, reducing cuts to social safety nets into one huge package.
The bill’s main goal is to extend the 2017 Trump tax cut, which is due to expire at the end of 2025. Most of these tax credits will become permanent, and spending on border security, military and energy projects will also increase.
The bill is partially funded by reducing healthcare and food programs.
The nonpartisan Congressional Budget Office estimates that Trump’s measures will increase U.S. debt by $3.3 trillion over the next decade. The US government currently owes $36.2 trillion to lenders.
Key aspects of the bill include:
Tax reduction
In 2017, Trump signed the Tax Cuts and Employment Act, lowering taxes and increasing standard deductions for all taxpayers, but mostly benefiting from high-income earners.
These tax credits are set to expire this year, but the new bill will make them permanent. He also adds some cuts he promised during the campaign.
There is a change in US tax laws called salt deductions (state and local taxes). This allows taxpayers to deduct certain state and local taxes (such as income tax and property tax) on their federal tax returns.
Currently, people can only deduct up to $10,000 of these taxes. The new bill will raise its cap from $10,000 to $40,000 for five years.
Taxpayers are also allowed to deduct tips and income from overtime, as well as the interest paid on loans to purchase cars made in the US.
The law includes a tax cut of approximately $4.5 trillion.
Children
If the bill does not become law, the child tax credit (now $2,000 per child each year) will decrease from 2026 to $1,000.
However, if the current version of the Senate bill is approved, the credits will rise to $2,200.
Boundary walls and security
The bill set aside approximately $3500 billion for Trump’s borders and national security plans. This includes:
$460 billion on the US-Mexico border wall is part of a plan to carry out the largest massive deportation effort in US history to hire $45 billion to fund 100,000 beds at immigration detention centers, as well as 10,000 immigration and customs enforcement (ICE) agents.
Reducing Medicaid and other programs
To offset the costs of tax cuts and new spending, Republicans plan to reduce Medicaid and food assistance programs for low-income families.
Their goal is to refocus these safety net programs originally primarily on groups that were intended to support pregnant women, people with disabilities.
Medicaid helps poor and Americans with disabilities, while the Supplementary Nutrition Assistance Program (SNAP) helps people afford to buy food.
Currently, over 71 million people rely on Medicaid, and 40 million people receive benefits through SNAP. According to the Congressional Budget Office, if it becomes law, the bill will leave another 11.8 million Americans without health insurance by 2034.
Clean Energy Tax Reduction
Republicans are pushing to significantly reduce tax incentives that support clean energy projects driven by renewable energies like solar and wind. These tax cuts are an important part of former President Joe Biden’s Landmark 2022 Act, Inflation Reduction Act, which aims to tackle climate change and reduce healthcare costs.
Tax credits for those who purchase new or used electric vehicles will expire on September 30th this year, rather than at the end of 2032 under current law, if the bill passes in its current form.
Debt Limitations
The law raises the debt cap by $5 trillion, exceeding the $4 trillion outlined in the version handed over in the House of Representatives in May.
Who will benefit the most?
The wealthier taxpayers are more likely to get more from the bill than low-income Americans, according to Yale University’s Budget Institute.
They estimate that people in the lowest income group will see their income drop by 2.5%, primarily due to snaps and Medicaid cuts, while the best earners will see their income rise by 2.2%.
Which Senator voted against the bill?
Maine Republican Sen. Susan Collins opposed it to reduce deep Medicaid that affects healthcare in low-income families and rural areas.
I am a strong supporter for expanding tax cuts for families and small businesses. My vote on this bill mainly arises from the harmful effects it has on Medicaid, affecting low-income families and rural healthcare providers, such as hospitals and nursing homes.
– Senator Susan Collins (@senatorcollins) on July 1, 2025
North Carolina Republican Sen. Tom Tillis cited concerns over Medicaid cuts to his members. Tillis announced that he will not seek re-election amid threats from Trump that he will support Tillis as a Republican challenger.
The facts are important. People are important. The Senate’s Medicaid approach will break promises and drive away Medicaid people who really need it. The Senate can make one simple revision to make sure it doesn’t happen. pic.twitter.com/zvw1agcxbf
– Senator Tom Tillis (@senthomtillis) June 30, 2025
Kentucky Republican Sen. Rand Paul voted “no” for financial reasons, warning that the bill would significantly exacerbate the national deficit.
Through the llama vote, I worked all night to stop Congress from increasing our debts.
I met with @VP and repeated my offer to vote for the bill if it included a 90% reduction in the debt cap.
There is no purpose. There is no handout material. Just a real financial reform.
I wasn’t looking…
– Randpaul (@randpaul) July 1, 2025
All members of the Democratic Caucus, a total of 47 senators, also voted against the bill.
Who supported the bill in the Senate?
The remaining Republicans voted in favor, allowing the bill to pass 51-50, and Vice President J.D. Vance voted in decisions.
Trump sets a July 4 deadline, but will pass the bill to Congress, but admitted it was “very difficult” by that day on Tuesday. The House passed an earlier version of the bill in May, but it will need to be reviewed again for the revisions raised by the Senate.
The prominent Senate supporters include:
Sen. Lisa Murkowski (represented by Alaska): Her support was secured after Republicans agreed to the rules specific to Alaska.
“I have an obligation to Alaskan people, and I endure it every day,” she told an NBC News reporter.
Senators Rick Scott of Florida, Mike Lee of Utah, Ron Johnson of Wisconsin, and Cynthia Ramis of Wyoming: These financially conservative senators have shifted from reluctance from their amended support of the bill.
Senate Majority Leader John Tune led the Push to pass the law.
How did lawmakers and the public react?
Most Republican lawmakers celebrated it as a historic achievement.
Trump also expressed his joy.
“Wow, music in my ears,” Trump said after reporters told him the news. “I was wondering how we were doing, and I know this is prime time, so it shows I care about you,” he added.
“We ultimately got the job done and we’re pleased to be President Trump and his agenda and partner,” Thune said after the vote.
Democrats opposed it, calling it a giveaway to the wealthy at the expense of healthcare, food aid and climate policy.
“Today’s vote will be bothered by my Republican colleagues for years to come,” Democrat Chuck Schumer said in a floor speech after the vote.
“The Republicans have overshadowed the shy,” he added.
Today’s vote will be plagued by Senate Republicans for years to come.
Americans will see the damage has ended as hospitals approach, people are fired, costs rise, and debt rises.
Democrats confirm that Americans remember the betrayal that happened today. pic.twitter.com/wmwnza5n9k
– Chuck Schumer (@senschumer) July 1, 2025
The U.S. Chamber of Commerce led a coalition of over 145 organizations in favour of the bill, highlighting “capital investment, job creation and wage promotion.”
They praised the permanent tax cuts and border patrol funds.
However, healthcare and hospital associations have warned that millions of people will lose coverage and could boost emergency and unpaid care costs. Environmental groups have also expressed strong opposition.
Public opinion about the bill is also declining.
“The first [Trump] There was over 50% of the support. Now it’s under 50% and politicians know that,” Al Jazeera’s Alan Fisher reports from Washington, DC.
“They recognize that this could lead to Medicaid cuts. They recognize that even if Donald Trump has committed to protecting it, they can cut nutrition programs, especially for poor families in the United States.
“And they get tax cuts, but they managed a lot of time, and yes, there is tax cuts, but I was convinced by the democratic argument that billionaires do much better than ordinary Americans.
What happens next?
The process begins with the House Rules Committee. This will meet to mark up the bill and determine how discussion and consideration will proceed on the House floor.
After the bill passes the Rules Committee, it will move to the House floor on Wednesday morning for potentially, potentially, discussion and votes on rules.
If the House does not accept a version of the Senate bill, it can make changes and send it back to the Senate for another vote.
Alternatively, both rooms could appoint members to the conference committee to resolve the compromise.
Once both the House and Senate agree to the final text and passed in both rooms in Congress, the bill is sent to Trump to sign the law.
