Editor's Note: Since this article was written, President Donald Trump has signed the so-called "One Big Beautiful Bill" (OBBB) into law.
You may have heard that the House Republicans’ “One Big Beautiful Bill Act” includes many tax and spending changes that could affect your finances. The massive $3 trillion, 1,000-page legislation passed the House by one vote on May 22, focusing on making many of Donald Trump’s 2017 tax cuts permanent.
Numerous provisions in the bill could impact your wallet, from a proposed state and local tax deduction increase to Medicaid changes and cuts, tax deductions for cash tips, overtime pay, specific car loan interest, and higher HSA contribution limits.
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However, analyses show that many of the proposed tax cuts disproportionately benefit upper-income households. Additionally, some provisions are set to expire after 2028, meaning the tax relief could be temporary unless Congress acts again.
But…while the bill passed the U.S. House of Representatives, it has a way to go before its provisions become law.
The U.S. Senate needs to weigh in, and then the House would have to approve any changes before the legislation would make its way to President Trump’s desk. And it sounds like the upper chamber is ready and willing to make some changes.
Here's more of what you need to know.
Senate Republicans debate Trump's “One Big Beautiful Bill”
Changes to the House GOP bill are pretty much certain to be proposed, as multiple key Republican senators have publicly stated their opposition to major provisions.
- On CNN’s “State of the Union,” Sen. Ron Johnson of Wisconsin, who has been quite vocal on the issue, said there is enough Republican opposition in the Senate to hold up President Trump’s tax and spending bill unless it includes deeper spending cuts and more serious efforts to reduce the federal deficit.
- Sen. Rand Paul (R-Ky.) has stated his opposition to the bill's debt ceiling provision (more on that later), saying, "There's nothing fiscally conservative about expanding the debt ceiling more than we've ever done it before."
- During an Oval Office press conference, Trump said he expected the package to be "jiggered around a little bit," as part of the legislative process.
Meanwhile, House Speaker Mike Johnson (R-La.) wants the Senate to avoid major modifications, to deliver the final version to President Trump by July 4.
So, while we wait to see what happens, here’s how some major provisions could affect your wallet — and hurdles to watch as the bill moves through the Senate.
1. Medicaid cuts and SNAP benefits
What the House Bill Says: The House bill proposes to cut Medicaid and SNAP by up to $1 trillion combined over the next decade, by some estimates, to offset the cost of new tax breaks and other spending priorities.
Why GOP Senators Might Change It: Some Senate Republicans, especially those from states with large Medicaid populations, are concerned about the political and practical fallout of such deep cuts.
Sens. Susan Collins (Maine), Lisa Murkowski (Alaska), and Josh Hawley (Mo.) have pointed to Congressional Budget Office estimates showing that the bill’s $700–$880 billion in Medicaid cuts — resulting from new work requirements, shorter enrollment periods, and tighter eligibility rules — could lead to between 7.6 and 10.3 million Americans losing coverage.
Many of those affected would reside in red states, heightening the political stakes for GOP senators whose constituents depend on Medicaid.
Sen. Hawley described the proposed Medicaid cuts as “morally wrong and politically suicidal,” emphasizing in a May 2025 op-ed that many Republican voters rely on those benefits.
It’s also worth noting that some senators are pushing for even deeper cuts to control the deficit, while others worry about the impact on vulnerable constituents and may seek to soften the reductions.
What the Senate proposed: The Senate bill would cap Medicaid provider taxes at 3.5%, a change that some say could cost states billions in matching federal funds.
2. State and Local Tax Deduction (SALT) cap increase
What the House Bill Says: The House bill raises the SALT deduction cap from $10,000 to $40,000 for joint filers making less than $500,000, with a phase-out for those above that income level. The cap would increase by 1% per year from 2026 to 2033, then remain at that level.
Why GOP Senators Might Change It: Several Senate Republicans, especially from low-tax states, question why the federal government should subsidize residents of high-tax, often Democratic-leaning states.
There’s skepticism about whether this provision is fair, and some senators are likely to push for a lower cap or additional restrictions to prevent the benefits from flowing mostly to wealthier taxpayers in so-called "blue states." Though it should be noted that the SALT cap also impacts residents in so-called "red states."
What the Senate Proposed: The Senate has so far proposed what some see as a placeholder, which keeps the SALT deduction cap at $10,000.
3. Child Tax Credit expansion and eligibility
What the House Bill Says: The House bill temporarily increases the maximum Child Tax Credit to $2,500 for 2025–2028, after which it reverts to $2,000 (adjusted for inflation). The bill also restricts eligibility for certain families, like those with mixed immigration status.
Why GOP Senators Might Change It: Some Republicans, like Sen. Hawley and Vice President JD Vance, have previously called for a more generous or permanent child tax credit.
- Specifically, Hawley proposed increasing the child tax credit from $2,000 to $5,000 per child and expanding eligibility to include all payroll taxpayers, not just those with income tax liability.
- As Kiplinger reported, Vance backed a $5,000 child tax credit during the 2024 presidential campaign.
So, the temporary nature of the increase, combined with eligibility restrictions, may not be enough for some lawmakers, who could possibly push for a larger or longer-lasting benefit as negotiations move forward.
What the Senate Proposed: The Senate would trim the CTC to $2,200.
4. EV Tax Credit repeal
What the House Bill Says: The House bill repeals or phases out many clean energy and electric vehicle tax credits established under the Inflation Reduction Act of 2022. That includes terminating most residential energy efficiency and clean energy credits after December 31, 2025, several years earlier than initially scheduled.
For electric vehicles, the bill ends the main federal EV tax credit for most new purchases after 2025, with only a limited exception for manufacturers that have sold fewer than 200,000 qualifying vehicles.
The legislation also eliminates or shortens incentives for domestic manufacturing, renewable energy projects, and clean hydrogen production, requiring many projects to begin construction within just 60 days of enactment to remain eligible.
Why GOP Senators Might Change It: Some Senate Republicans represent states with growing green energy sectors and are reportedly worried about job losses or economic harm.
According to the Joint Committee on Taxation, these changes could reduce support for clean energy by up to $561 billion over the next decade, putting billions in new investments and jobs at risk.
There’s reportedly discussion about adjusting the phase-out schedule or carving out exceptions to protect specific industries.
What the Senate Proposed: The Senate proposal makes the phaseout slower than in the House version.
5. Deficit spending and tax cuts overall
What the House Bill Says: The House bill is projected to add nearly $4 trillion to the deficit over the next decade, despite including about $1.5 trillion in proposed spending cuts. Data from the Congressional Budget Office and the Penn Wharton Budget Model show those cuts are concentrated in programs like Medicaid and SNAP, with the burden falling most heavily on low-income Americans.
- The bill makes many of the 2017 Trump tax cuts permanent and introduces new tax reductions, which analyses indicate would disproportionately benefit higher-income households.
- Additionally, the House version of the bill includes a provision to raise the federal debt ceiling by $4 trillion.
Why GOP Senators Might Change It: Fiscal conservatives in the Senate, including Sens. Johnson and Paul, argue that the spending cuts aren’t deep enough to justify the tax cuts’ fiscal impact. Paul’s assessment — “The math doesn’t really add up” — echoes the concerns of some others in his party.
Those senators could push for more aggressive spending reductions or other changes to make the bill’s long-term impact on the federal budget more acceptable.
Raising the debt ceiling has also sparked debate. Some argue that such a significant increase is fiscally irresponsible and would make the GOP "own the debt" going forward.
Treasury officials have warned that failure to raise the debt limit could risk a government default as soon as August if Congress doesn’t act.
What the Senate Proposed: The Senate has proposed a higher debt limit of $5 trillion.
Is the Senate eyeing Medicare cuts?
Senate Republicans are reportedly considering changes to Medicare as part of their efforts to find additional spending cuts to offset the cost of the reconciliation bill.
The focus of these discussions is on what they describe as "waste, fraud, and abuse" within the Medicare program, with a focus on overpayments in privately run Medicare Advantage plans. According to several news reports, one proposal gaining traction involves cracking down on "upcoding," a practice where insurers classify patients as sicker than they are to receive higher government reimbursements.
Notably, President Trump, who previously indicated he wouldn't touch Medicare, has reportedly signaled his support for these efforts. The notion now seems to be that these moves wouldn't impact beneficiaries directly, but instead go after inefficiencies and improper payments.
The Big Beautiful Bill: Looking Ahead
With internal GOP debates over Medicaid cuts, the SALT deduction, the child tax credit, energy tax credits, and the deficit, the path forward for the “One Big Beautiful Bill” is anything but smooth.
Adding to the pressure, President Trump, who seems to oscillate between supporting potential Senate changes to the bill and wanting just to move forward, took to Truth Social last week, urging,
“The Senate must pass the ‘One Big Beautiful Bill’ and send it to my desk. It’s time to make America win again—no more delays, no more excuses. Our economy and our workers are counting on it.”
At the same time, Trump's ally, Elon Musk, formerly of Department of Government Efficiency (DOGE) fame, blasted the bill, calling it a "disgusting abomination."
In a post on X on Tuesday, Musk also described the bill as an "enormous, outrageous, waste-ridden Congressional spending package."
(Trump and Musk traded barbs regarding the bill and a lot of other topics all day on June 5.)
Several Republican senators and prominent budget watchdogs are voicing concerns similar to Musk’s, warning that the bill would lock in lower federal revenues just as other spending and interest payments are reaching record highs.
They argue that claims of deficit reduction are misleading, since the bill’s math depends on comparing it to a scenario where the 2017 tax cuts fully expire — a scenario few in Congress considered realistic.
Buckle up. The coming weeks and months will be crucial in shaping any final legislation.
This story has been updated to include developments involving Elon Musk and Senate discussions over Medicare.
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