Trump's trillion-dollar tax cut bill is a tug-of-war! US Senate argues all night to no avail

The Zhitong Finance App learned that according to reports, US Senate Republicans are still trying their best to pass the large-scale tax cuts and spending bill proposed by President Trump in the early hours of Tuesday morning local time. Even within the party, there are still differences over this bill that could increase the national debt by 3.3 trillion US dollars.

The senators held an 18-hour “voting marathon,” during which time the Republican Party and the minority Democratic Party proposed a series of amendments. This special procedure allows Republicans to bypass the Senate's rules of procedure, which require 60 votes to pass conventional legislation. The duration of the marathon vote, which began on Monday morning, is difficult to predict. Lawmakers say the review progress is partially hampered by the need to confirm whether the amendments meet the special budget rules.

Senate Majority Leader John Thune told reporters after midnight, “I hope we have entered the final sprint stage and we will be watching the voting results.” However, hours later, there is still no sign of a vote on the final passage of the bill. Due to the unanimous opposition of the Democratic Party, the Republican Party can only lose at most three votes of support in both chambers of voting.

The non-partisan Congressional Budget Office's assessment on Sunday showed that the Senate version of the bill would increase the 36.2 trillion US dollar treasury debt by 3.3 trillion US dollars, 800 billion US dollars more than the version passed by the House of Representatives last month. Although some Republicans argue that continuing current policies will not increase debt burdens, international bond investors have begun to seek alternatives to the US Treasury bond market.

The Democratic Party, on the other hand, hopes that this astonishing figure will raise concerns among fiscal conservatives and prompt them to move away from the Republican Party that controls both houses of Congress. “As we've been saying for months, this bill denies people's health insurance rights, raises electricity bills, and only cuts taxes for billionaires,” Senate Minority Leader Chuck Schumer criticized in his speech. Thun, on the other hand, defended that tax cuts would benefit families and small businesses, and defended cuts in social safety net spending, pointing out that the Medicaid (Medicaid) growth rate is unsustainable and that reforms are needed to improve efficiency.

The Senate passed a procedural vote last Saturday by a narrow margin of 51:49, starting debate on the 940-page comprehensive bill (covering tax cuts, immigration, borders, and military spending). Trump wants the bill approved before Independence Day on July 4.

The bill's political game

Amendments proposed by Democratic senators, such as restrictions on Medicaid cuts, were all rejected by the Republican majority. The Republican version of the bill includes a number of sensitive political topics, such as prohibiting the use of Medicaid funding for nearly 30 medical procedures related to gender reassignment; increasing funding for criminal and gang background checks for unaccompanied immigrant children (including “gang tattoo” tests for 12-year-olds).

Early Tuesday morning, the two parties jointly vetoed Republican Senator Susan Collins's amendment — a bill that aims to mitigate the impact of Medicaid cuts on rural healthcare institutions by increasing federal funding to $50 billion over five years (funded by raising the highest federal tax rate), but still received support from 18 Republicans.

Musk, who was appointed by Trump to lead the government throttling plan and later broke down publicly due to the budget bill, warned on Monday that he would target Republicans in the 2026 midterm elections. “Any member of Congress who promised to cut government spending during the election but voted for the biggest increase in debt in history should be ashamed to bow down!” He posted an article on the X platform while reaffirming his intention to form a new political party, mocking that members of both parties are “PORKY PIG PARTY (Pig Party)” that squanders public funds.

The American Chamber of Commerce, which claims to represent most small businesses, supports the bill. However, John Arensmeyer (representing over 85,000 small businesses), the representative of the “Small Business Majority” organization, pointed out that the current corporate tax relief mainly benefits the richest 5% of small businesses.

debt ceiling crisis

The Republican plan includes a $5 trillion debt ceiling increase (1 trillion more than the House version), but if it fails to pass any version before this summer, the Treasury may face the risk of running out of borrowing rights, which could lead to a disastrous debt default. Kentucky Senator Rand Paul joined the opposition because of this, and his colleague Tom Tillis denounced the bill to cut Medicaid and clean energy programs.

According to an analysis by the National Assembly Budget Office, the Senate bill will cause 11.8 million people to lose health insurance, which exceeds the estimates of the House version. If passed by the Senate, the bill will be submitted to the deeply divided House of Representatives for consideration. Some lawmakers are dissatisfied with its huge expenses, while others are concerned about Medicaid cuts.

This super bill aims to extend Trump's main political achievement during his first presidency — the 2017 tax cuts — while cutting other taxes and increasing military and border security spending. Republicans rejected the Budget Office's legislative cost estimates and insisted on using a special accounting method that did not calculate the continuing costs of the 2017 tax cuts. Outside tax experts such as Andrew Lautz, an expert at the Bipartisan Policy Center, a non-partisan think tank, denounced it as a “magic trick.” According to the Center's analysis, adopting this law could drastically reduce the bill's apparent cost and seem to save 500 billion US dollars.