Senate Republicans unveiled their version of President Trump’s “One Big, Beautiful Bill” this week — and several key provisions are already drawing ire, not just from Democrats but from members of their own party.
From deep Medicaid cuts to scaled-back climate incentives and a $5 trillion debt ceiling hike, the Senate plan includes major policy shifts that are likely to spark tough negotiations with House Republicans and potential holdouts in both chambers.
Here’s a breakdown of the most contentious provisions in the Senate bill — and what could derail a deal.
Medicaid cuts
In their version of the bill, Senate Republicans are doubling down on efforts to scale back Medicaid.
The measure would cap provider taxes at 3.5 percent by 2031, down from the current 6 percent. But there’s just one caveat: This would be only for the states that expanded Medicaid under the Affordable Care Act, including New York, Michigan, Arizona, and California. The cap would be phased in by lowering it 0.5 percent annually, starting in 2027.
States that haven’t expanded Medicaid wouldn’t be allowed to introduce new taxes — and like in the House version, their funding rates would stay frozen at current levels. The lower cap wouldn’t apply to nursing homes or intermediate care facilities.
Hospitals, though, would take a significant hit. The Senate bill cuts certain state-directed payments that many hospitals currently rely on — a move that could seriously impact their bottom line. The House version takes a softer approach, capping future payments but allowing existing deals to continue.
These changes are likely to raise even more concern among Republicans like Sens. Susan Collins and Josh Hawley, who’ve already pushed back on the House-passed version’s Medicaid freeze and its potential impact on their states.
“In my state, more than 400,000 Mainers rely on that health care program,” Collins said in April when reporters asked about the House’s version. “Our rural hospitals depend on it too — and they’re already struggling because of decisions made by the state Legislature.”
Green energy tax credits
The Senate’s version scraps the House bill’s strictest requirement, which is a rule that would have disqualified clean energy projects unless they broke ground within 60 days of the bill’s passage. Instead, under the Senate plan, projects like solar and wind would need to begin construction this year to qualify for the full credit.
The bill also builds in a phase-out: projects starting in 2026 would receive 60 percent of the credit, those starting in 2027 would get 20 percent, and anything beginning in 2028 or later would no longer qualify.
These changes represent a significant pullback from the clean energy incentives in the 2022 Inflation Reduction Act — the cornerstone of Democrats’ climate agenda — but they may still fall short of satisfying hardline conservatives.
Texas Rep. Chip Roy, for one, posted on X that he “will not vote for this.”
Debt ceiling
The bill from Senate Republicans would raise the debt ceiling by $5 trillion, instead of the $4 trillion increase in the House’s version.
The debt-ceiling language is a major sticking point for Republican Sen. Rand Paul, who’s already said he won’t support the bill if it includes such a large increase in federal borrowing authority.
“I can’t vote to raise the debt ceiling $5 trillion,” Paul told Fox News Sunday in May. “There’s got to be someone left in Washington who thinks debt is wrong and deficits are wrong and wants to go in the other direction.”
Caps on state and local taxes
The state and local tax (or SALT) deduction fight is once again heating up, and this time, the Senate’s proposal is raising eyebrows.
The Senate’s version sticks with the current $10,000 cap on SALT deductions — and would make that cap permanent once it expires at the end of the year.
That’s likely to cause friction with House Republicans like New York Rep. Mike Lawler, who struck a deal with Speaker Mike Johnson to raise the cap to $40,000 for households earning under $500,000.
Lawler, a key member of the House’s SALT Caucus, isn’t budging. He’s already said the Senate plan is a nonstarter — and made it clear he’ll “not accept a penny less” than the $40,000 cap.
Still, there may be some wiggle room. Senate Majority Leader John Thune told reporters Monday that the $10,000 deduction cap is just a starting point for talks with House Republicans — and that they’ll likely land on a number somewhere in the middle that works for both sides.
