President Donald Trump’s domestic policy package, passing through the Senate, affects almost every American, affecting tax overhauls, healthcare and energy policy.
It renews the tax cuts Trump signed to the law in his first term, paying for them with rapid cuts to Medicaid, the food aid program and clean energy funding.
However, the vast package, which is likely to face major changes before the final Senate vote, also touches on a variety of other policy issues, from artificial intelligence and space exploration to immigration.
Over the next decade, the law has reduced revenues by about $4.5 trillion, cut spending by $1.2 trillion and increased national debt by $3.3 trillion, according to the latest forecast from the non-partisan Congressional Budget Office.
This is what you see in the current version of the bill. All cost and savings estimates are from the new CBO analysis and cover a 10-year period.
Tax reduction
What it does: Republicans are trying to permanently extend the tax rate Trump signed in 2017. This is expected to expire at the end of the year.
Forecast Cost: $4 trillion.
State and Local Tax Credits (Salt)
What it does: This provision is required by House Republicans from the high-tax blue state, allowing Americans to deduct up to $40,000 a year from federal taxes for five years. When an individual’s annual income reaches $500,000, the salt deduction is abolished. As part of a compromise with Senate Republicans, CAP will return to $10,000 a year in five years.
According to staff on the Senate Budget Committee, forecast costs: $142 billion.
Tips, no tax on overtime or car loans
What it does: The bill will exempt federal income tax tips and overtime payments, fulfilling Trump’s two campaign promises. Taxpayers can also deduct interest on car loans up to $10,000 on US-made vehicles.
The bill also features a temporary $6,000 tax credit for seniors, which decreases gradually in stages as income increases.
Forecast Cost: $150 billion.
Child Tax Credit
What it does: Senate Republicans want to permanently increase their annual child tax credit to $2,200. House Republicans proposed to smash it at $2,500, but it returned to $2,000 after 2028.
Forecast Cost: Estimates vary, but can cost hundreds of millions of dollars.
Immigration enforcement
What it does: This package provides customs and border patrols with $46.5 billion in funding to build boundary walls and associated infrastructure such as customs, cameras, lights, sensors and more. The package also includes $2 billion from the Department of Homeland Security and $29.9 billion for immigration and custom enforcement.
Forecast Cost: Approximately $150 billion.
Increase in military funds
What it does: The bill includes $25 billion for “Golden Dome” missile defense systems, $29 billion for shipbuilding and $15 billion for nuclear deterrence.
Forecast Cost: $153 billion.
Medicaid cut
What it does: Republicans targeted the Medicaid program that 72 million Americans rely on health insurance by setting a monthly work requirement for healthy adults under the age of 65, with the exception that includes parents of children under the age of 14.
The Senate is more than the House has done primarily to Medicaid funding, particularly by limiting state fees to healthcare providers used in underserved communities. Under this new change, the federal government will not be on the hook to reimburse states, and many states will need to lower existing fees. This also affects 41 states that voted to expand Medicaid under the Affordable Care Act.
Expected savings: $900 billion.
Reducing Medicare and affordable care methods
What it does: “waste, fraud, abuse” Republicans say they’ve targeted Medicaid.
Expected savings: $170 billion.
Reducing the benefits of SNAP
What it does: Republicans have enacted more work requirements for Americans who rely on the Supplementary Nutrition Assistance Program (SNAP) or food stamps. Healthy adults under the age of 65 must work 80 hours a month, except for those with children under the age of 10.
Expected savings: $285 billion.
Clean Energy Tax Credit Rollback
What it does: The bill rolls back tax credits under the Inflation Reduction Act, which then President Biden signed into law that included clean vehicles and electricity. This includes the last minute total abolition of federal subsidies for the wind and solar industries, unless the project is in work by the end of 2027. Additional taxes will be incrementally incremented depending on the amount of products manufactured in China.
Despite complaints from some Republicans, the Senate bill went further than the version the House passed. They also added new tax incentives for coal production.
Expected savings: $488 billion.
artificial intelligence
What it does: The bill effectively hampers its own rules for artificial intelligence for five years as a condition to receive the federal broadband expansion fund.
Republicans are divided into these regulations, with Sen. Marsha Blackburn of Tennessee negotiating with Sen. Ted Cruz of Texas, defeating a “temporary suspension” since 2010.
It also includes legal calculations related to unfair or deceptive conduct or practice, child online safety, child sexual abuse material, rights to promote, protection of persons’ names, images, voices or likeness.
Forecast Cost: This provision adds $25 million to existing $500 million buckets for AI deployments.
Space Program Funding
What it does: The bill includes a grab bag for the space program, including $10 billion in mission priorities on Mars, $325 million to remove the International Space Station, and $85 million to acquire a space shuttle from the Dulles Aerospace Museum and transport it to Texas.
Predicted cost: $10 billion on Mars. $325 million for the degrowth of the space station. The space shuttle travels for $85 million.
Private universities donation tax
What it does: The law would introduce a new excise tax on investment income from university contributions with more than 3,000 students.
Expected savings: $761 million.
Repay planned parent-child relationships
What it does: This law cuts Medicaid funds for businesses that provide abortions (except in rare cases such as rape and incest).
Expected savings: $52 billion
Debt cap hike
The package includes an increase in the debt cap of $5 trillion. That’s over the $4 trillion included in the House Pass package.
NBC News’ Scott Wong contributed.
Hours after the Supreme Court ruled that it would block a national court injunction, advocacy groups filed a temporary restraining order to prevent President Donald Trump’s natural citizenship from taking effect.
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