"Trump’s $4.5T Tax Bill Advances in Senate After Vance-Led GOP Compromise"

"Trump's $4.5T Tax Bill Advances in Senate After Vance-Led GOP Compromise"

"Vice President JD Vance secures support for bill, which faces further negotiation on spending cuts and healthcare reforms"

President Donald Trump's $4.5 trillion tax cut and spending package has inched closer to becoming law, as the Senate overcame a critical hurdle on Saturday. After intense negotiations led by Vice President JD Vance, the bill secured enough Republican backing to begin formal debate, with a vote of 51-49. This victory follows a day of tension and compromise, with the vote being kept open for nearly four hours to ensure the necessary support was secured.

Senators Thom Tillis (R-NC) and Rand Paul (R-KY) voted against the motion to proceed, highlighting the internal party divisions that have threatened to derail the legislation. However, Senator Ron Johnson (R-WI) changed his vote after securing a commitment to phase out the enhanced 90% Medicaid match under the Affordable Care Act, a move that could yield significant savings but may alienate some moderates.

The bill, which includes $4.5 trillion in tax cuts, is a cornerstone of Trump's economic agenda and is designed to have a minimal official budget impact by using a legislative tactic that only counts $693 billion in the formal cost estimate. This approach excludes the cost of extending Trump's 2017 tax cuts.

To appease various factions within the Republican party, several key compromises were made in the latest draft:

- A $25 billion rural hospital fund was introduced to address concerns from moderates about potential Medicaid cuts.
- The state and local tax (SALT) deduction cap would be raised from $10,000 to $40,000 for five years, with a phaseout for higher earners above $500,000.
- Green energy tax credits would face a quicker phase-out than previously planned.
- The implementation of a 3.5% cap on Medicaid provider taxes would be delayed until 2032.

Additionally, the bill proposes a $5 trillion increase to the US debt ceiling to prevent a government default in August. It also includes temporary tax breaks for tipped workers, seniors, overtime earners, and vehicle buyers.

The Senate is now in a race against the clock to pass the bill, as Democrats have called for a complete reading of the 1,000+ page legislation, which could delay a final vote until Monday. Republican leaders aim to push the bill through the Senate by Sunday to allow the House to vote before the July 3 deadline.

Vice President Vance's pivotal role in negotiations has helped maintain party unity, as he has worked directly with individual senators to mediate disputes on Medicaid funding and energy policy. With his guidance, the GOP leadership remains hopeful of finalizing the package in the coming days. Despite this progress, the bill still faces opposition from Democrats and further changes are likely as the Senate navigates its path to potential enactment.