Critics are concerned that tax cuts may be implemented at the expense of key social services, such as healthcare and childcare support
Muhamad Yehia
After a long wait, the Senate is launching action on President Donald Trump’s “big, beautiful bill” of tax breaks and spending cuts at a risky moment for the US and the global economy.
More than a month after House Republicans surprised Washington by advancing their framework for Trump’s $4.5 trillion (€4.1tn) in tax breaks and $2tn (€1.8tn) in spending cuts, Senate Republicans voted on Thursday to start working on their version. The largely party-line vote, 52-48, sets the stage for a potential Senate all-nighter on Friday, spilling into the weekend.
But work on the multitrillion-dollar package is coming as markets at home and abroad are on edge in the aftermath of Trump’s vast tariffs scheme, complicating an already difficult political and procedural undertaking on what Republicans hope will become their signature domestic policy package.
Trump says he’s on board with the plan and Republicans, in control of Congress, are eager to show the party is making progress toward delivering on their campaign promises. By nightfall, as voting began, one Republican, the libertarian-leaning Senator Rand Paul of Kentucky, voted against, as did all Democrats
Are tax breaks coming at the expense of social support?
Democrats, as the minority party, don’t have the votes to stop the GOP plan. But they intend to use the procedural tools available to prolong the process. Democrats argue that Republicans are focusing on tax breaks for the wealthy at the expense of the programs and services millions of Americans rely on for help with healthcare, childcare, school lunches and other everyday needs.
“They’re mean, they’re nasty, they’re uncaring,” Senate Democratic Leader Chuck Schumer said about the Republicans.
“We, tonight and tomorrow, are going to show just who they are,” he added
Senate Democrats started consuming up to 25 hours of their available debate time, holding the floor into the night and railing against potential GOP cuts to Medicaid, veterans programs, DOGE cuts and the impact of Trump’s tariffs.
Senator Jeff Merkley of Oregon, the ranking Democrat on the Budget committee, repeated a slogan he has been sharing: “Families lose and billionaires win.”
“That,” he said, “is the Republican plan.”
Senate package to boost security funds
Fundamental to the Senate package is the continuation of Trump’s first-term tax cuts, which are set to expire at the end of the year. The new framework wants to make them a permanent fixture of the tax code. The senators also will consider adding Trump’s proposed tax cuts on tipped wages, Social Security income and others
The Senate package also would bolster border security funds by some $175 billion (€159.2bn) to carry out Trump’s mass deportation campaign, which is running short of cash, and it would add national security funds for the Pentagon. These are all priorities the Senate GOP tucked into an earlier version that was panned by House Republicans.
Republican Senator John Barrasso of Wyoming, the party whip, said that without action the tax cuts would expire, becoming a $4tn (€3.6tn) tax hike on Americans.
“Republicans are focused on getting America back on track,” he said.
?How will these measures be paid for
What’s unclear is how it will all be paid for, since Republican deficit hawks typically require spending offsets to help defray the lost tax revenue and avoid piling onto the nation’s $36tn (€32.8tn) debt load.
While House Republicans approved their package with $4.5tn (€4.1tn) in tax breaks and up to $2tn (€1.8tn) in spending cuts, the Senate Republicans are taking a different tack.
Senate Budget Committee Chairman Lindsey Graham is making the case that since the existing Trump tax breaks are the current policy, they are not considered new, and do not need to be offset with reductions in spending. This is an approach Democrats compare to “going nuclear” with the normal rules, particularly if the strategy is put to the test with an unfavourable ruling before the Senate parliamentarian.
Instead, Senate Republicans are considering offsets mostly for any new Trump tax breaks. Raising alarms from the most conservative budget hawks, the senators have set a floor of about $4bn (€3.6bn) in budget reductions to health and other programs, a fraction of the package’s expected $4tn-plus (€3.6tn-plus) price tag for tax breaks.
GOP leaders are assuring the deficit hawks within their own ranks that the legislation says the cuts can rise to as much as $2tn (€1.8tn).
After an expected Friday night vote-a-rama, with dozens of amendments being offered to the package, the senators are planning to stay into Saturday if needed to take a final vote to approve it, sending it to the House for action.
The House and Senate will ultimately need to merge their frameworks into a final product, expected in May, but House Speaker Mike Johnson’s intention to have it all wrapped up by Memorial Day could prove optimistic.
Efficiency cuts
The political environment is uncertain, and the public’s appetite for steep budget cuts is being tested in real time. Trump’s Department of Government Efficiency, headed by billionaire Elon Musk, is blazing through federal offices, firing thousands of workers, and shuttering long-running government mainstays.
At the same time, the staunchest fiscal conservatives in both the House and Senate, many aligned with the Freedom Caucus, are pushing for even more cuts.
Trump told senators publicly and privately this week he would have their backs, particularly when it comes to standing up for the spending reductions. At a White House announcement revealing the tariffs Wednesday, Trump said the Senate plan had his “complete and total support”.
The president’s steep tariffs threw the global economy into a tailspin on Thursday, with stocks down around the world and US markets leading the decline.