The Senate recently unveiled its version of the major tax and spending package known as the “One Big Beautiful Bill.” This bill differs in important ways from the version the House of Representatives passed last month. Now, Republican lawmakers must reconcile these differences before the legislation can move forward.
Key Differences Between Senate and House Bills
Medicaid Cuts Are Deeper in the Senate Bill
Both bills reduce funding for Medicaid, the joint state-federal health insurance program for low-income Americans. However, the Senate bill imposes stricter work requirements. It exempts only parents with children under 14, while the House bill exempts parents with children under 18. The Senate version also removes coverage for many legal immigrants, with some exceptions.
Tax Deductions Are More Limited in the Senate Bill
The Senate bill scales back some tax breaks included in the House version. For example, the child tax credit would increase to a maximum of $2,200 per child, compared to $2,500 in the House bill. It also caps deductions on tips and overtime pay at $12,500 for individuals and $25,000 for married couples. The House bill allowed unlimited deductions for these earnings.
Some Tax Benefits Are More Generous in the Senate Bill
Seniors would receive a larger income deduction of $6,000 under the Senate plan, versus $4,000 in the House version.
The Senate Bill Is Costlier Over Time
The Senate proposal phases out green energy tax credits more slowly and makes certain business tax breaks permanent rather than temporary. Economists at Goldman Sachs estimate these changes would increase the bill’s cost over 10 years.
Political Context and Next Steps
Republicans control both the House and Senate and are leading the effort to finalize the bill. Because the legislation is passed through the budget reconciliation process, Democrats cannot filibuster it. This gives Republicans a clearer path to enact the bill once they agree on a compromise.
The two chambers now face the challenge of merging their versions into a single bill that balances spending cuts, tax policy, and political priorities.
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