After a dramatic vote, the Senate pushes ahead on Trump's tax break and spending cut plan
Capping a tumultuous night, the Republican-controlled Senate advanced President Donald Trump's package of tax breaks, spending cuts and increased deportation money, with more weekend work ahead as Congress races to meet his Fourth of July deadline for passage.
By a 51-49 tally and with Vice President JD Vance at the Capitol to break a potential tie, the Senate cleared a key procedural step Saturday as midnight approached. Voting had come to a standstill, dragging for more than three hours, with holdout senators huddling for negotiations and taking private meetings off the Senate floor. In the end, two Republicans opposed the motion to move ahead on Trump's signature domestic policy plan, joining all 47 Democrats.
'Tonight we saw a GREAT VICTORY in the Senate,' Trump said in a social media post afterward.
Republicans are using their majorities in Congress to push aside Democratic opposition, but they have run into a series of political and policy setbacks. Not all GOP lawmakers are on board with proposals to reduce spending on Medicaid, food stamps and other programs as a way to help cover the cost of extending some $3.8 trillion in Trump tax breaks.
Story continues below advertisement
Trump had lashed out against holdouts, threatening to campaign against one Republican, Sen. Thom Tillis of North Carolina, who had announced he could not support the bill because of Medicaid cuts that he worried would leave many without health care in his state. A new analysis from the nonpartisan Congressional Budget Office said the Senate version of the bill would increase by 11.8 million the number of people without health insurance in 2034.
Tillis and Sen. Rand Paul, R-Ky., voted 'no.'
Renewed pressure to oppose the 940-page bill came from Elon Musk, who criticized it as 'utterly insane and destructive.'
Ahead for senators now will be an all-night debate and amendments. If they are able to pass it, the bill would return to the House for a final round of votes before it could reach the White House.
Get breaking National news
For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up
By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy
With the narrow Republican majorities in the House and Senate, leaders need almost every lawmaker on board.
Senate Democratic leader Chuck Schumer of New York said Republicans released the bill 'in the dead of night' on Friday and were rushing through before the public fully knew what was in it. He forced a full reading of the text that began late Saturday and continued into Sunday morning.
Tax breaks and core GOP priorities
At its core, the legislation would make permanent many of the tax breaks from Trump's first term that would otherwise expire by year's end if Congress fails to act, resulting in a potential tax increase on Americans. The bill would add new breaks, including no taxes on tips, and commit $350 billion to national security, including for Trump's mass deportation agenda.
Story continues below advertisement
But the cutbacks to Medicaid, food stamps and green energy investments are also causing dissent within GOP ranks. Sen. Ron Wyden, D-Ore., said the environmental rollbacks would amount to a 'death sentence' for America's wind and solar industries.
The Republicans are relying on the reductions to offset the lost tax revenues but some lawmakers say the cuts go too far, particularly for people receiving health care through Medicaid. Meanwhile, conservatives, worried about the nation's debt, are pushing for steeper cuts.
A dramatic roll call
As the roll call teetered, attention turned to Sen. Lisa Murkowski, R-Alaska, who was surrounded by GOP leaders in intense conversation. She voted 'yes.'
A short time later, Majority Leader John Thune, R-S.D., drew holdouts Sen. Rick Scott of Florida, Mike Lee of Utah and Cynthia Lummis of Wyoming to his office. Vance joined in. The talks dragged on.
Then Vance led them all back in to vote.
Later, Scott said he had met with the president, adding, 'We all want to get to yes.'
Lee said the group 'had an internal discussion about the strategy to achieve more savings and more deficit reduction, and I feel good about the direction where this is going, and more to come.'
Republicans revise after setbacks by Senate's arbiter.
Story continues below advertisement
The release of the bill's draft had been delayed as the Senate parliamentarian reviewed the measure to ensure it complied with the chamber's strict 'Byrd Rule,' named for the late Sen. Robert C. Byrd, D-W.Va. It largely bars policy matters from inclusion in budget bills unless a provision can get 60 votes to overcome objections.
Republicans suffered a series of setbacks after several proposals, including shifting food stamp costs from the federal government to the states or gutting the funding structure of the Consumer Financial Protection Bureau, were deemed out of compliance with the rules.
But over the past days, Republicans have quickly revised those proposals and reinstated them.
The final text includes a proposal for cuts to the Medicaid provider tax that had run into parliamentary hurdles and objections from several senators worried about the fate of rural hospitals. The new version extends the start date for those cuts and establishes a $25 billion fund to aid rural hospitals and providers.
Top income-earners would see about a $12,000 tax cut under the House bill, while the package would cost the poorest Americans $1,600, the CBO said.
Tussle over SALT
The Senate included a compromise over the so-called SALT provision, a deduction for state and local taxes that has been a top priority of lawmakers from New York and other high-tax states, but the issue remains unsettled.
Story continues below advertisement
The current SALT cap is $10,000 a year, and a handful of Republicans wanted to boost it to $40,000 a year. The final draft includes a $40,000 cap, but limits it for five years. Many Republican senators say that is still too generous, but House Republicans are not fully satisfied either.
House Speaker Mike Johnson sent his colleagues home for the weekend with plans to be on call to return to Washington.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Winnipeg Free Press
an hour ago
- Winnipeg Free Press
Celebrating Canada Day — and doing your part
Opinion Tomorrow's a good day to count your blessings for being in Canada. At the core of it all? It's good to be in a country that believes in the rule of law. That is the foundation of a nation, and a foundation Canada is widely respected for having. Judges are not picked for their fealty to particular politicians or parties — we don't have a Republican Supreme Court of Canada or a Democrat Supreme Court. Independent commissions pick justices at all levels for their legal skills and experience, and politicians appoint candidates from lists the commissions recommend. Russell Wangersky / Free Press Happy Canada Day (Though appointments sometimes skew toward eminently qualified jurists who may also have had histories with one political party or another.) Federal electoral ridings are, likewise, chosen by an independent agency, Elections Canada, which also ensures elections are held in the same manner and with the same rules in every province and territory in the country. Independent groups set electoral boundaries, so gerrymandering doesn't take place. Our prime minister cannot simply issue executive order-style edicts based on their personal whim. Politicians are not above the law. In other words, we have robust protections in the courts and in our political system to ensure power remains with the people and their democratically elected politicians. And there's more. We are a comparatively wealthy country that ranks highly in indexes that measure happiness — though, ranked as the world's 18th happiest population, we have slid a fair distance down from 2015's fifth place overall. (Much of the decline is owing to poor scores from Canadians under 30 and those in marginalized communities.) But even that is at risk, especially when we decide to pronounce over and over again that 'Canada is broken.' Repeat something often enough, and people tend to believe that it's true — even when it isn't, and even when they may not have any experience of what 'broken' really feels like. Ask those who come from a truly broken country what their life experiences are, and you might find they would be more than willing to swap countries with you in an instant. Canada may well be a country that, like many others, has serious issues. Issues that can, and should, be addressed. Crime, housing and health care are all pressing problems that require our attention, for certain. But Canadians aren't grabbed off the streets by faceless, masked militias. Doors aren't kicked in for warrantless searches. Weekday Mornings A quick glance at the news for the upcoming day. And if you truly believe that Canada is flawed, you can do your part to make it better. It is, in fact, your job to help to make it better. Citizenship isn't meant to be a comfortable recliner or a spectator sport. You can take part in our democracy: vote, campaign for politicians you support, even run for office yourself if you feel you have something to offer other Canadians. Working together, living together, enjoying the things that make us a community and a nation, helping those among us who need our help. But don't simply complain and expect a politician — of any stripe — will magically make things better for you. They may echo your complaints to get your votes, but without the benefit of a clear and functional plan, they're merely demonstrating the old adage that misery loves company. What we need is something we saw a flicker of when U.S. President Donald Trump began to threaten us with annexation, and directly harm us with tariffs — we saw the willingness of Canadians to band together, to be united as a country, to set goals and to be willing to make sacrifices. Unity is refreshing after experiencing a long dose of the politics of alienation. Make a better Canada. Be a better Canadian. And enjoy tomorrow … together.
Winnipeg Free Press
an hour ago
- Winnipeg Free Press
Asian shares are mixed after US stocks hit an all-time high
BANGKOK (AP) — Asian shares started the week with gains after U.S. stocks closed at an all-time high following their recovery from the shocks of the Trump administration's trade policies. Canada's decision to cancel a plan to tax U.S. technology firms that had led President Donald Trump to halt trade talks helped to steady the markets. U.S. stock futures advanced after Canadian Prime Minister Mark Carney said the talks had resumed. In Tokyo, the Nikkei 225 climbed 0.6% to 40,395.99. Hong Kong's Hang Seng lost 0.3% to 24,207.36, while the Shanghai Composite index advanced 0.5% to 3,438.46. China reported that its factory activity improved slightly in June after Beijing and Washington agreed in May to postpone imposing higher tariffs on each others' exports, though manufacturing remained in contraction. In South Korea, the Kospi gained 0.5% to 3,070.93. Australia's S&P/ASX 200 jumped 0.6% to 8,560.80. Taiwan's Taiex lost 1.4% and the Sensex in India was down 0.4%. In Bangkok, the SET was up 0.3%. On Friday, the S&P 500 rose 0.5% to 6,173.07, above its previous record set in February. The key measure of Wall Street's health fell nearly 20% from Feb. 19 through April 8. The Nasdaq composite gained 0.5% to 20,273.46, its own all-time high. The Dow Jones Industrial Average rose 1% to 43,819.27. The gains on Friday were broad, with nearly every sector within the S&P 500 rising. Nike soared 15.2% for the biggest gain in the market, despite warning of a steep hit from tariffs. An update on inflation Friday showed prices ticked higher in May, though the rate mostly matched economists' projections. Inflation remains a big concern. Trump's on-again-off-again tariff policy has made it difficult for companies to make financial forecasts and strained household budgets. A long list of businesses from carmakers to retailers have warned that higher import taxes will likely hurt their revenues and profits. The U.S. has 10% baseline tariffs on all imported goods, along with higher rates for Chinese goods and other import taxes on steel and autos and the threat of more severe tariffs continues to hang over the economy. The current pause on a round of retaliatory tariffs against a long list of nations is set to expire on July 9. Failure to negotiate deals or further postpone the tariffs could once again rattle investors and consumers. In an interview with Fox News Channel's 'Sunday Morning Futures,' Trump said his administration will notify countries that the trade penalties will take effect unless there are deals with the United States. Letters will start going out 'pretty soon' before the approaching deadline, he said. The Federal Reserve is monitoring the tariff situation with a big focus on inflation. The rate of inflation has been stubbornly sitting just above the central bank's target of 2%. In a report Friday, its preferred gauge, the personal consumption expenditures index, rose to 2.3% in May. That's up from 2.2% the previous month. The Fed cut interest rates three times in late 2024 following a historic series of rate hikes to cool inflation. The PCE was as high as 7.2% in 2022 while the more commonly used consumer price index hit 9.1%. The Fed hasn't cut rates so far in 2025 over worries that tariffs could reignite inflation and hamper the economy. Economists still expect at least two rate cuts before the end of the year. Monday Mornings The latest local business news and a lookahead to the coming week. Bond yields held relatively steady. The yield on the 10-year Treasury rose to 4.28% from 4.27% late Friday. The two-year Treasury yield, which more closely tracks expectations for what the Federal Reserve will do, stood at 3.74%. In other dealings early Monday, U.S. benchmark crude oil lost 8 cents to $65.44 per barrel. Brent crude, the international standard, gained 6 cents to $66.86 per barrel. The U.S. dollar fell to 143.93 Japanese yen from 144.46 yen. The euro rose to $1.1730 from $1.1725. __ AP Business Writers Damian J. Troise and Alex Veiga contributed.
Winnipeg Free Press
2 hours ago
- Winnipeg Free Press
Chinese factory activity improves slightly with delay on tariffs, but still lags
BANGKOK (AP) — Chinese factory activity improved somewhat in June after President Donald Trump agreed to delay imposing higher tariffs on imports from China for 90 days, but overall activity was still contracting, according to a survey released Monday. The purchasing managers index, which reflects new orders and other measures, rose to 49.7 from 49.5 in May, the National Bureau of Statistics reported. That's on a scale of 0 to 100 where 50 and above shows expansion. Other reports showed similar trends in Japan and Korea. Trump has said he's not planning to extend the 90-day pause on tariffs on most nations beyond July 9. The delay for imposing much higher tariffs on China, agreed to in early May, expires about a month later. The hiatus for tariffs brought a revival of manufacturing activity as companies and individuals rushed to take advantage of lower import duties. But that mainly helped large manufacturers, with small and mid-size companies' output still contracting. Hiring also fell. New export orders and exports also remained below the 50-level that marks expansion. In Japan, manufacturing output edged 0.5% higher in May, well below analysts' estimates for a 3.5% increase. 'The subdued rise in industrial production in May means that firms were not benefitting from sky-high U.S. tariffs on Chinese imports, and their production forecasts point to continued weakness,' Marcel Thieliant of Capital Economics said in a report. South Korea's government reported that its 'all industry' measure of output fell 2.9% from a year earlier in May, with production of computer chips falling 2%. Production of vehicles fell 2.3% year-on-year, after falling 4.1% in April. Monday Mornings The latest local business news and a lookahead to the coming week. In an interview with Fox News Channel's 'Sunday Morning Futures,' Trump said he's not planning to extend a 90-day pause on tariffs on most nations beyond July 9. The delay for imposing much higher tariffs on China, agreed to in early May, expires about a month later. Trump said his administration will notify countries that the trade penalties will take effect unless there are deals with the United States. He had played down the deadline at a White House news conference Friday by noting how difficult it would be to work out separate deals with each nation. The administration had set a goal of reaching 90 trade deals in 90 days. Despite a recent trade deal with Beijing over rare earth exports from China, establishing a fairer relationship will require significant tariffs. Details of the latest agreement to deescalate trade tensions are scarce and major issues between the world's two biggest economies remain unresolved. 'I think getting along well with China is a very good thing,' Trump said. 'China's going to be paying a lot of tariffs, but we have a big (trade) deficit, they understand that.'
