The Senate Republicans announced a new version of their tax cuts package of US $ 4.2 billion that adjusts key provisions on Salt deduction, Medicaid and clean energy while trying to meet the deadline of July 4 established by President Donald Trump.
The new early draft published on Saturday morning reflects the commitments between the features at war of the Republican party in the Senatewhich has been divided on how much to cut the security network programs such as Medicaid and how quickly to gradually eliminate tax credits to renewable energies promulgated under the Biden administration.
The leader of the majority of the Senate, John Thune, has announced that he plans that his camera begins to vote on the fiscal bill on Saturday afternoon, and that the final votes will be held early on Sunday. Party leaders plan to bring members of the House of Representatives back to Washington at the beginning of next week for what they expect is the final approval of the measure in time for the deadline of Trump’s independence day.
It is not yet clear if the 50 republicans of the Senate needed to approve the bill are all agree. The bill can be modified even more in the Senate’s plenary to ensure the votes, if necessary. The House of Representatives could also make more changes if the Chairman of the Chamber, Mike Johnson, has difficulty getting votes in favor of the measure.
But a conservative senator, Ron Johnson, said on Saturday in Fox News that I would vote against starting the debate on the bill if a vote is summoned now.
“This is an important bill,” Wisconsin Republican said. “There is no need to hurry.”
SALT DEDUCTION
A provisional agreement is included with the Republicans of the House of Representatives to increase state and local tax deduction. The bill would raise the SALT deduction limit of US $ 10,000 to US $ 40,000 for five years, before returning to US $ 10,000. The new limit applies from 2025 and increases 1% in subsequent years.
The possibility of claiming the total amount of the Salt would be gradually eliminated for those who win more than US $ 500,000 a year. An attempt from the House of Representatives was eliminated from the text to limit the capacity of transfer companies to avoid the Salt limit.
The agreement has the support of the majority of the members of the Salt block of the House of Representatives, composed of Republicans of Districts with high taxes. While conservatives criticize it for its cost of hundreds of billions of dollars, it has the approval of the White House.
The Senate Republicans also eliminated a “Revenge Tax” of section 899 on some foreign companies and investors that had scared Wall Streetafter the Treasury Secretary, Scott Besent, requested the change.
The measure of the Senate makes permanent the individual and commercial tax exemptions promulgated in 2017, While adding new temporary exemptions for workers who receive tips and work extra hours, older people and car buyers.
Changes in Medicaid
To win moderate Republicans, the bill would create a new background of US $ 25,000 million for rural hospitals aimed at giving mitigate the impact of Medicaid cutswhich otherwise could force some rural suppliers to close.
However, republican senator Susan Collins, from Maine, had demanded a fund of US $ 100,000 million.
The moderate Republicans also achieved a postponement from 2031 to 2032 of the total impact of a new limit of 3.5% in taxes to state suppliers of Medicaid. States often use these taxes, within some existing standards, to reduce federal funds and increase payments to centers such as hospitals. The limits to the Medicaid financing mechanism would begin to be implemented gradually in 2028.
The limit to taxes to suppliers would only apply to the states that expanded the coverage of Medicaid for low -income persons under the affordable medical care law. According to the Kaiser Family Foundation, 40 states and the Columbia district have already done so.
The version of the bill approved by the House of Representatives proposed a moratorium on new or greater taxes to the suppliers, which according to the Congress Budget Office would save the federal government more than US $ 89,000 million dollars during the next decade.
The measure would also impose new labor requirements for Medicaid beneficiaries and would require that the beneficiaries of Medicaid who obtained eligibility through the affordable medical care law pay part of their costs through positions such as co -payment and deductibles.
Republican senator Josh Hawley from Missouri, who had criticized Medicaid cuts for being too deep, He said the changes were enough to obtain their support, while Collins said that “he would bow against the bill” without further concessions, but that he would vote to start the debate.
Renewable energy
The Senate Republicans advanced the limit for the tax credits for wind and lots even before the initially proposed, before Trump’s opposition to the credits. The new measure requires that these projects be “in operation” at the end of 2027 to receive the incentives, instead of simply being under construction by then.
The change, if approved, could represent a hard blow for companies such as Nextera Energy Inc., the largest American and solar projects. However, energy adjustments could help the Republican Senator Mike Lee, who resists voting in favor of the bill.
The Senate Democratic leader, Chuck Schumer, warned Americans in a publication on social networks that the Republicans’s plan to gradually eliminate the exemptions of clean energy taxes “It would increase their electricity bills and endanger hundreds of thousands of jobs”.
Senate Republicans would also modify an existing fiscal loan for clean energy so that it also covers the production of metallurgical coal, which is used in the manufacture of steel.
The new Senate legislation would eliminate a popular fiscal credit to the US $ 7,500 for electric vehicles rather than in previous drafts. Although the initial proposal would have finished the incentive in the late 2025 for most electric vehicles sales, the new version eliminates it after September 30, 2025. Fiscal credits for the purchase of used and commercial electric vehicles would end at the same time.
The new draft incorporates a plan to sell up to 1.2 million land acres of the Department of Interior for Housing and Community Development in 11 west states. The measure, promoted by Lee, a republican of Utah, could raise up to US $ 6,000 million. However, it has generated opposition by some Republican senators of the affected states, who have promised to eliminate it from the bill.
The gradual elimination of a tax credit for hydrogen production would be delayed to cover the projects that begin to be built until 2028. The previous version of the legislation ended credit this year.
The bill would cut the financing of the Office of Financial Protection of the Consumer, would cut federal payments to the states for food coupons and increase the funds for a border wall between the United States and Mexico, among other things.
The version eliminates a provision that explicitly ends the free electronic presentation program Direct File administered by the IRS, a loss for the Turbotax manufacturer, Intuit Inc. But the legislation maintains a fund of US $ 15 million that creates a working group to study the replacement of the free electronic presentation program.
The bill would modify a new proposed tax on some non -citizen remittancesreducing it from 3.5% in versions prior to 1%, in a victory for Western Union and Moneygram.
The measure would avoid paying for payments in the United States already in August by raising the debt roof in US $ 5 billion.
