US Senate Republicans Change Trump Tax-Cut Bill, Setting Up Conflict with House

U.S. Senate Republicans on Monday, June 16, 2025, unveiled proposed changes to President Donald Trump's sweeping tax-cut and spending bill that would make some business-related tax breaks permanent while making more limited, the deduction for state and local income taxes, angering some colleagues in the House of Representatives.
The different versions of the bill in the two narrowly Republican-controlled chambers of Congress could complicate party leaders' goal of passing the bill, which is the centrepiece of Trump's domestic agenda, before a self-imposed July 4 deadline. The new changes ran into early resistance from two separate Senate Republican camps: those who want deeper spending cuts to attack the growing federal deficit and others looking to preserve social safety nets, including the Medicaid healthcare program for lower-income Americans.
One big change would involve maintaining the current $10,000 cap on federal deductions for state and local income taxes, well below the $40,000 limit in the version approved by the House last month. That drew immediate criticism from House Republicans whose constituents would benefit from the higher deduction. But a committee document shows the amount is subject to continuing negotiations. The Senate Finance Committee proposal would also cap tax breaks on tipped income and overtime pay that Trump promised during the 2024 campaign. The House version would allow deductions on tipped income for those earning up to $160,000 a year.
The bill would extend the 2017 tax cuts that were Trump's main legislative achievement during his first term in office and would also boost spending for the military and border security. The measure raises the federal government's self-imposed debt ceiling by $5Tn, a step Congress must take by some time this summer or risk a devastating default on the nation's $36.2Tn in debt.
With a 53-47 Senate majority and a 220-212 edge in the House, Republicans can afford to lose few votes to pass a bill that faces united Democratic opposition.

(Source: Reuters)