USA (Europe Brief Newspaper): The US Senate has passed a Trump-backed tax-cut and spending bill that slashes Medicaid and food aid, sparking criticism over its impact on vulnerable populations.
For ultimate approval, the bill will now return to the House of Representatives. In order for him to sign it into law by the July 4 Independence Day holiday, Trump has pressed lawmakers to get it to his desk.
With the 940-page law passing by the narrowest of margins in a Congress under their control, Trump’s Republicans have had to tread carefully.
Republicans are fighting over particular tax benefits and healthcare plans that may change entire businesses and leave millions of people without insurance, and they have only three votes left in the House and Senate as Democrats line up against them.
“That’s not fiscal responsibility. It’s not what we agreed to,”
the group said on Monday.
“I will not support a final bill that eliminates vital funding streams our hospitals rely on,”
Representative David Valadao, a California Republican, said during the weekend debate.
Trump promised new tax relief for elderly, overtime, and tipped income during the 2024 election, and the plan would permanently extend his 2017 company and personal income tax cuts, which are set to expire at the end of this year. It would eliminate many of Democratic President Joe Biden’s green-energy incentives and allocate tens of billions of dollars to Trump’s immigration enforcement.
Nonpartisan researchers claim that the bill’s tighter qualifying requirements for food and health safety net programs would essentially lower income for lower-income Americans, who would then be responsible for bearing a greater portion of those expenses.
The most recent version of the measure, according to the CBO, would increase the $36.2 trillion debt load by $3.3 trillion.
In order to delay the possibility of a debt default this summer that would rock international markets, the law would also increase the country’s borrowing cap by $5 trillion.
The cost estimate produced by the CBO’s established methodology was rejected by Republicans. However, foreign bond investors perceive incentives to diversify beyond the United States.
Treasury bonds as deficits increase.
Republicans have mostly agreed on the bill’s key provisions and claim it will benefit small businesses and families while putting Medicaid and other benefit programs on a more sustainable course.
However, a few House Republicans from high-tax areas like California, New Jersey, and New York have made a tax cut for state and local tax payments and a Medicaid funding mechanism their primary priorities, and they have had difficulty reaching an agreement on these issues.
Meanwhile, those on the right side of the party have advocated for more significant Medicare cuts in order to mitigate its fiscal impact.
Since taking office again in January, few Republicans have dared to oppose Trump, who has singled out such Republican dissenters on his Truth Social network and barred them from White House events.
One of the three Republicans who voted against the plan, Senator Thom Tillis of North Carolina, said on Sunday that he would not seek reelection next year.
The bill was also opposed by Republican senators Rand Paul of Kentucky and Susan Collins of Maine.
How will the tax cuts in Trump’s bill affect different income groups?
While lower-income and working-class Americans are likely to receive little gains or perhaps net losses when taking into account budget cuts and reduced benefits, higher-income households and corporations would disproportionately profit from the tax cuts in President Trump’s package.
The law solidifies the long-term decreases in corporate tax rates and business incentives by extending and broadening the 2017 tax cuts for corporations and rich individuals.
It adds new tax incentives for overtime and tips, but these mostly help a tiny group of low-wage workers and don’t make up for the reductions in social programs.
Despite some tax relief, low-income and rural communities would be disproportionately harmed by Medicaid and SNAP cuts, which will lower their total disposable income.
