The bill cleared the Senate in a 51-50 vote.

The passage of the filibuster-skirting package was the culmination of a messy and drawn-out budget reconciliation process and was preceded by days of debate, amendment votes, and backroom dealmaking by Senate Majority Leader John Thune (R-SD) to win over enough Republican holdouts. Senators endured a grueling marathon amendment voting session in the hours leading up to the final vote, where primarily Democrats and some Republicans forced dozens of roll call votes over the course of 26 hours that began Monday morning.

Speaker Mike Johnson (R-LA) will now be tasked with overcoming hurdles and complaints in his own GOP conference. Complicating matters is that the Congressional Budget Office said the Senate version will add some $3.3 trillion to deficits over the next decade, which the House Freedom Caucus said violates the cost-cutting agreements in the budget framework.

Congressional Republicans and the White House insist that the megabill is actually deficit-reducing because it’s based on extending “current policy baseline,” a novel accounting method that suggests it’s cost-free to make permanent the 2017 Trump tax cuts that would otherwise expire next year. The White House also argues that economic growth from the bill will offset the deficit hit.

Notably, the CBO’s $3.3 trillion number doesn’t measure the bill against current policy.

Democrats, and some GOP fiscal hawks like Paul, decried it as a gimmick. The measure also raises the debt ceiling by $5 trillion.

The heart of the legislation is extending and making permanent the 2017 Tax Cuts and Jobs Act from Trump’s first term, which lowered individual tax rates to their current levels that are set to expire at year’s end. One of the biggest imprints the Senate made on the bill compared to a version previously passed by the House was to make permanent the business tax cuts, which the lower chamber only proposed to temporarily extend.

Tax cuts, illegal immigration, and energy

Senate Republicans settled on maintaining the House’s $40,000 cap on state and local tax (SALT) deductions, a thorny issue for blue-state House Republicans whose constituents pay higher state taxes. The figure would quadruple the current rate of $10,000, as set by Trump’s 2017 tax bill.

SALT critics argue the deductions primarily benefit high-income earners in liberal states and subsidize spending by state and local governments led by Democrats. The provision was crucial to win over key SALT proponents like Reps. Mike Lawler (R-NY) and Nick LaLota (R-NY).

However, the $40,000 cap lasts only five years before snapping back to the $10,000 current limit.

Other new tax measures include versions of Trump’s campaign promises to exempt taxes on tips, reduce Social Security taxes, and eliminate taxes on overtime.

The bill would set a $25,000 limit for deductions on tipped income and phases out for single-filers and joint-filers who earn annually more than $150,000 and $300,000, respectively.  

The legislation would allow up to $10,000 in auto loan interest to be deducted, phasing out for single-filers who make more than $100,000 annually and $200,000 for joint-filers. Only new cars assembled in the U.S. would be eligible.

A $6,000 deduction for seniors over the age of 65 would be created as part of Trump’s pledge to end taxes on Social Security benefits.

Another area of tax policy closely watched and debated was the child tax credit, an increasingly popular benefit among populist conservatives who want to encourage more Americans to have families.

Under the Senate’s proposal, the credit would increase from $2,000 to $2,200 per child. That’s down from $2,500 under the House version. However, the Senate would make the increase permanent, whereas it would expire after 2028 in the House bill. Pro-family conservatives, including Sen. Josh Hawley (R-MO), wanted the credit as high as $5,000.

The Senate legislation also boosts the child and dependent care tax credit, known as the CDCTC.

On border security, the legislation includes nearly $200 billion over the next decade to beef up illegal immigration enforcement that has been a major focus of the Trump administration. There is funding for the construction of additional southern border wall, immigration detention centers, state and local grants, surveillance technology, and broader enforcement and removal operations by U.S. Immigration and Customs Enforcement, Homeland Security, and the Justice Department.

“The Big Beautiful Bill will allow ICE to hire 10,000 new officers,” DHS Secretary Kristi Noem said in a statement to the Washington Examiner. “ICE currently has 20,000 law-enforcement and support personnel in more than 400 offices. A larger force will provide ICE agents with the necessary protection so they can continue to carry out removals.”

In a bid to further crack down on federal spending and illegal immigration, the bill strips benefits for most noncitizens from government programs like Medicaid and food stamps.

The bill makes major changes to healthcare, particularly to Medicaid, the government-run health insurance program for some 80 million lower-income adults and children. It creates work requirements for childless, able-bodied adults, and it would defund Planned Parenthood by prohibiting Medicaid funds from being used to reimburse health clinics that provide abortions.

The megabill would also rework the so-called Medicaid provider tax framework that shrinks federal reimbursements to states for beneficiaries, a major concern of so-called “Medicaid moderates” who feared the change could bankrupt rural hospitals in red states. The provision is what led Tillis to oppose the bill and others to threaten to withhold their support until concessions were made.

THOM TILLIS ANNOUNCES RETIREMENT AFTER OPPOSING TRUMP TAX BILL

On energy, federal subsidies for wind and solar projects are set to take a major funding hit by rolling back clean energy tax credits from former President Joe Biden’s Inflation Reduction Act. Senate Republicans opted to accelerate the credit phase-outs compared to an earlier proposal from the House. But in a win for conservative conservationists, a controversial proposal from Sen. Mike Lee (R-UT) to sell tracts of public lands to help pay for Trump’s tax cuts was stripped from the text.

Food stamps through the Supplemental Nutrition Assistance Program (SNAP) would be reduced by nearly $70 billion through work requirements and $40 billion with state matching funds. Another roughly $85 billion is cut elsewhere from the program.

Gabrielle Etzel, Callie Patteson, David Sivak, and Marisa Schultz contributed to this report.