The Senate Cooks Up Big Changes to Trump’s Big Bill

Happy Monday! As Congress returns to action this week, Senate Republicans will be looking to put their imprint on the budget reconciliation bill passed by the House. Lawmakers in the House, meanwhile, will be starting their work on Fiscal Year 2026 funding bills. We've got your fiscal update.

The Senate Gears Up to Revise Trump's Big Bill

It's the Senate's turn in the reconciliation spotlight. With a self-imposed July 4 deadline looming, Senate Republicans are launching into a four-week work period that will see them try to pave over internal differences to pass their own version of the massive budget bill containing much of President Donald Trump's legislative agenda.

The Senate will be making changes to the House-passed version. That much is clear. But Senate Majority Leader John Thune will likely have to overcome a series of challenges, as various factions in his conference press for their competing priorities and preferences, from steeper spending reductions to dialing back House cuts to Medicaid or clean energy tax breaks.

Thune, with a 53-seat majority, only needs to secure 51 Republican votes for the bill. Getting there likely won't be easy, though - and doing it with changes that the House can then pass again will be even harder. Among the most nettlesome issues:

• Spending and deficits: Sen. Ron Johnson of Wisconsin has been the most vocal of a group of conservatives insisting on steeper spending cuts, arguing that the federal government shouldn't be spending at pandemic-era levels and that the House bill, which cuts more than $1.5 trillion in federal spending, doesn't go far enough. Sens. Mike Lee and Rick Scott have also objected to the spending levels in the House bill.\

Sen. Rand Paul on Sunday told CBS's "Face the Nation" that "the math doesn't really add up" on the House bill and noted that the increased funding it would provide for the military and border enforcement exceeds the total cuts made by the Department of Government Efficiency. "Look, the President has essentially stopped the border flow without new money and without any new legislation," he said. "So, I think they're asking for too much money."

Paul also made clear that his major objection is to the House plan's $4 trillion increase in the debt limit, saying that he could likely vote for the rest of the package.

President Donald Trump fired a warning shot toward Paul this weekend in a social media post that said the senator "will be playing right into the hands of the Democrats, and the GREAT people of Kentucky will never forgive him" if he votes against the bill.

• **Medicaid: **Sens. Susan Collins, Josh Hawley and Lisa Murkowski have raised concerns about the Medicaid cuts in the House bill, and other senators have suggested that the House bill's targeting of Medicaid provider taxes - a way that states finance their share of Medicaid spending - could be a point of contention.
• Clean energy tax breaks: House conservatives pushed to eliminate or phase out hundreds of billions in clean-energy tax credits passed by Democrats as part of the 2022 Inflation Reduction Act. But four GOP senators - Murkowski, John Curtis, Jerry Moran and Thom Tillis - have already come out against repealing the IRA credits. "While we support fiscal responsibility and prudent efforts to streamline the tax code, we caution against the full-scale repeal of current credits, which could lead to significant disruptions for the American people and weaken our position as a global energy leader," they wrote in an April letter to Thune.

Democrats prepare to challenge what they can: Senate Democratic Leader Chuck Schumer wrote in a letter to colleagues on Sunday that Democrats will use every tool available to them to try to block the GOP bill, challenging policies that they say violate the narrow Senate rules requiring elements of a reconciliation package to directly affect spending, revenues or the debt limit.

"This partisan monstrosity is nothing short of a billionaire handout paid for by American families and we will fight it with everything we've got," he wrote, adding, "After crying foul for years about the deficit, Republicans are once again showing their true colors and ignoring the budget-busting cost of their Tax Scam, seemingly content to burden our children and grandchildren to a lifetime of higher interest rates, higher costs, and fewer opportunities."

**The bottom line: **The next four weeks will be critical to determining the shape - and fate - of the Republican megabill.

Johnson, Vought Claim GOP Bill Won't Add to the Deficit, Despite Projections

The Congressional Budget Office will release a full cost estimate this week for the "One Big Beautifull Bill Act" passed by the House last month - but some top Republicans have already made clear they're willing to dismiss the official analysis and come up with their own projections.

A preliminary analysis by the CBO said that the bill would add $2.3 trillion to deficits through the year 2034, including some $3.8 trillion in reduced revenue from tax changes. Yet in an interview with NBC's "Meet the Press" on Sunday, House Speaker Mike Johnson insisted that the Republican bill will not add to the deficit but will ultimately reduce it.

"It's not going to add to the debt," Johnson said.

NBC's Kristen Welker asked Johnson if he was really telling the American people that the GOP bill will not add one penny to the debt or deficit despite projections from the Joint Committee on Taxation, the Committee for a Responsible Federal Budget, the Tax Foundation, and the Penn Wharton Budget Model that all say the debt will grow by trillions of dollars. Johnson then ventured even further.

"I am telling you, this is going to reduce the deficit," he insisted.

Johnson argued that the CBO has historically underestimated the economic boost from tax cuts - The Washington Post's fact-checker called that a "bogus attack" - and he pointed out that the scorekeeper's latest projections are based on "anemic" economic growth expectations of 1.8% a year. The Trump administration has suggested that stronger growth of 3% may be more likely and would help the bill pay for itself.

Johnson also claimed that other expert analyses rely on so-called static scoring rather than what's known as dynamic scoring, which factors in economic feedback from the law's changes. Erica York, vice president of federal tax policy at the conservative-leaning Tax Foundation, pushed back on that claim. "The Speaker needs to update his talking points," she wrote on X, adding that the Tax Foundation "was one of the pioneers of dynamic scoring, and our dynamic score of the bill shows it will add to the deficit, even when accounting for higher economic growth."

Vought also rejected the idea that the Republican bill will add to the debt. "This bill doesn't increase the deficit or hurt the debt," Vought claimed on CNN. "In fact, it lowers it by $1.4 trillion."

Republicans Defend Medicaid Cuts - or Try to

The White House and some key Republican lawmakers are defending the Medicaid cuts in their budget reconciliation bill, but their defense relies on some highly questionable numbers - and has sparked some politically potent outrage.

The Congressional Budget Office has estimated that the Medicaid rolls would shrink by more than 10 million by 2034 as a result of the Republican reconciliation bill, with 7.6 million going uninsured, including 4.8 million who would lose coverage because of new work requirements.

In his Sunday interview with "Meet the Press," Speaker Mike Johnson denied that the GOP bill will cut Medicaid and claimed that the 4.8 million people projected to lose coverage because of the bill "will not lose their Medicaid unless they choose to do so." Johnson argued that the work requirements imposed by the bill and additional paperwork that will be needed to gain or maintain eligibility are "common sense" steps, and he disputed the idea that the changes would be too "cumbersome."

"There are no Medicaid cuts in the Big Beautiful Bill. We're not cutting Medicaid. What we're doing is strengthening the program," Johnson said.

President Donald Trump's budget director, Russell Vought, made similar claims in a Sunday interview with CNN. "This bill will preserve and protect the programs, the social safety net, but it will make it much more common sense," Vought said, adding, "No one will lose coverage as a result of this bill."

The White House followed up Monday with a similar statement arguing that Republicans are simply trying to defend the social safety net by eliminating undocumented immigrants and citizens who refuse to work from federal programs. The White House says the Medicaid rolls will shrink because 1.4 million undocumented immigrants will lose coverage, along with 4.8 million "able-bodied adults" who refuse to work.

Questionable number: The estimate of "able-bodied people who refuse to work" appears to be weak, and The Washington Post's Glenn Kessler says there is likely no sound basis for concluding that there are 4.8 million loafers sucking up healthcare from the comfort of their parents' couches.

Republicans are assuming that CBO's estimate of 4.8 million people losing Medicaid coverage as a result of new, more stringent work requirements in the healthcare program created by the GOP bill are all currently non-working. While CBO has provided no clarifying details, that's highly unlikely to be true.

Instead, according to KFF and other experts, the reductions in Medicaid coverage will be driven in large part by the monitoring system for the work requirements. A significant number of people on Medicaid will simply fail to complete the paperwork required to verify their status, resulting in a loss of coverage.

Writing about Medicaid reform last week, journalist Charles Lane summed up how work requirements successfully reduced enrollment in two states in the handful of places they have been tried. "Under Georgia's Medicaid work requirement, a model for the one in the GOP bill, only 7,000 out of 110,000 people who were subject to it in 2023 managed to navigate the paperwork verifying their employment status," Lane wrote. "When Arkansas tried a work requirement in 2018, similar bureaucratic hassles led to 18,000 adults losing coverage over four months, until a federal court halted the program."

The potential for a political firestorm: Iowa Sen. Joni Ernst highlighted just how dangerous a powder keg this could be for Republicans - and just how callous a defense of cutting Medicaid can be. At a town hall meeting on Friday, some in the crowd yelled, "People are going to die!" as the lawmaker discussed cuts in the healthcare program that aids millions of low-income Americans. "Well, we all are going to die," Ernst replied.

She then doubled down on her mockery. On Saturday, she recorded herself walking through a graveyard as she offered a sarcastic apology. "I made an incorrect assumption that everyone in the auditorium understood that, yes, we are all going to perish from this earth," she said. "So, I apologize, and I'm really, really glad that I did not have to bring up the subject of the tooth fairy as well."

She then provided some presumably more sincere advice, though none that would help someone needing care in an emergency room: "For those that would like to see eternal and everlasting life, I encourage you to embrace my lord and savior, Jesus Christ."

White House Releases More 2026 Budget Details

The White House late on Friday released an addendum to President Trump's budget request for the 2026 fiscal year, adding roughly 1,200 pages of details to the "skinny" budget released in early May.

Trump's 2026 budget calls for $163 billion in cuts to base non-defense discretionary spending, equal to about 22% of the $720 billion in such spending enacted in 2025. Spending on defense and border security in the budget request is flat, although the reconciliation bill currently under consideration in the Senate would provide a significant supplemental boost in those areas, raising spending by about $163 billion, the same amount that the budget seeks to cut elsewhere.

The new 2026 budget document fills in some details about where exactly the White House wants to see changes in spending, drilling down from the department level provided in the skinny budget into specific programs. Some of the significant fiscal changes defined in the document include cutting more than $60 billion from health, housing and community development projects, $12 billion from education programs, $5 billion from various agricultural programs and more than $2.7 billion from cancer research at the National Cancer Institute, part of an $18 billion decrease at the National Institutes of Health.

More to come: Connecticut Rep. Rosa DeLauro, the top Democrat on the House Appropriations Committee, noted that the White House has failed to provide all of the required documents, including tax revenue estimates. "This is not a complete budget," she said, per The Hill. "We are supposed to start putting together the funding bills for 2026 next week. If, as expected, House Republicans follow what President Trump has proposed so far, it is not a serious effort to deliver for the American people."

Washington Sen. Patty Murray, the top Democrat on the Senate's appropriations panel, made it clear that she doesn't need to see any more details, calling the budget request a "draconian proposal to hurt working people and our economy" that is "dead on arrival in Congress as long as I have anything to say about it."

White House budget director Russell Vought said last week that the full details of the proposal won't be released until Congress nails down the massive reconciliation bill, which will define tax cuts and spending adjustments that will be reflected in the final budget request.

"We've been in the process of getting the most important priority done, and that is, the one big, beautiful bill, the reconciliation bill," Vought told Fox News. "It is not just a proposal. A budget is a proposal. We're in the business of actually passing law."

Still, having passed its version of the reconciliation bill, the House plans to turn to the 2026 funding plans this week. The appropriations committee will hold a markup session for Veterans Affairs programs and military construction projects this Thursday.

Noting that the 2026 budget is already well behind schedule, congressional reporter Jamie Dupree said it was unlikely that lawmakers will complete their work before October 1, when the new fiscal year begins. "A stopgap funding bill will almost certainly be needed by October 1," Dupree said, adding, "A government shutdown won't surprise me one bit."

Fiscal News Roundup

• The GOP Megabill Is Moving to the Senate, Where Big Changes Could Be in Store – NPR
• What Key GOP Senators Want to Change in Trump's House-Passed Bill – CBS News
• Trump's "Big, Beautiful Bill" Has Republicans Squabbling Over Math – Axios
• Johnson Says 4.8 Million Americans Won't Lose Medicaid Access 'Unless They Choose to Do So' – The Hill
• OMB Director Flatly Denies Megabill Represents an Attack on the Social Safety Net – Politico
• Democrats Hammer Vought Over Medicaid Claims: 'Outrageous Lies' – The Hill
• GOP Beats Down Key Budget Office Over Tax Plan Projections – The Hill
• Thune Stares Down 'Medicaid Moderates' – Politico
• 'We're Not Going There': Thune Vows Not to Overrule Parliamentarian on Megabill – Politico
• White House Unveils New Details of Stark Budget Cuts – New York Times
• Republicans Face New Pressure to Extend Expiring Obamacare Tax Credits – NBC News
• China Says U.S. Violated Tariff Truce as Trade War Heats Up – CBS News
• As Courts Call Tariffs Into Question, Trump Again Turns to His Favorite Tool – New York Times
• A New 'Revenge Tax' Aimed at Foreign Investors Is Rattling Wall Street – Wall Street Journal
• Can Trump Fix the National Debt? Republican Senators, Many Investors and Even Elon Musk Have Doubts – Associated Press

Views and Analysis

• Economists Question G.O.P. Bill: Why Increase the Deficit in Good Times? – Ben Casselman and Colby Smith, New York Times
• The Upside-Down Priorities of the House Budget – Daron Acemoglu, Peter Diamond, Oliver Hart, Simon Johnson, Paul Krugman and Joseph Stiglitz, Economic Policy Institute
• Mike Johnson's Bogus Attack on CBO's Score of the 2017 Tax Bill – Glenn Kessler, Washington Post
• Are 4.8 Million People on Medicaid 'Cheating the System'? – Glenn Kessler, Washington Post
• 'We're All Going to Die': GOP Struggles to Defend Trump's Big, Beautiful Bill – Philip Elliot, Time
• A Surprising Coalition of GOP Senators Holds All the Megabill Leverage – Jordain Carney, Politico
• 6 Senate Republicans Who Could Hold Up Trump's 'Big, Beautiful Bill' – Al Weaver, The Hill
• Reality Gets in the Way of Republican Claims About the GOP Megabill and the Deficit – Steve Benen, MSNBC
• House Reconciliation Bill Barely Slows Spending Growth – Committee for a Responsible Federal Budget
• The Big Beautiful Bill Act Is a Debate Over the Future of the GOP – Michael Steele, MSNBC
• DOGE Vowed to Make Government More 'Efficient' - but It's Doing the Opposite – Hannah Natanson, Washington Post
• Republicans Are Trying to Repeal Obamacare Again. Sort Of – Paige Winfield Cunningham, Washington Post
• Trump's Out-of-Control Debt Is Not a Bug. To the GOP, It's a Feature – Michael Tomasky, New Republic
• Save Us, Senators, From a Very Expensive Mistake – Robinson Meyer, New York Times
• 'Fantasy Math' Masks Tax Bill's U.S. Debt Impact, GOP Lawmaker Said. What the Deficit Means for Your Money – Greg Iacurci, CNBC