US Senate unveils revised Trump tax draft with plans to vote soon: Key details here

Senate Republicans have announced a revised $4.2 trillion tax cut package, moving closer to a vote as they aim to meet US President Donald Trump’s July 4 deadline.

The new draft reflects compromises designed to bridge differences within the Senate GOP, particularly regarding social safety programs such as Medicaid and how rapidly to phase out of renewable energy tax credits enacted under the Biden administration, according to a Bloomberg report.

Key provisions and compromises

• Increased SALT deduction: A tentative deal with House Republicans to raise the state and local tax (SALT) deduction cap from $10,000 to $40,000 for five years before snapping back to the $10,000 level. The new cap applies to 2025 and rises 1% in subsequent years.

• Rural Hospital Fund: To appease moderate Republicans concerned about Medicaid cuts, the bill proposes a new $25 billion rural hospital fund aimed at helping some Medicaid providers avoid cuts. Republican Senator Susan Collins of Maine, however, had demanded a $100 billion fund.

• Delayed Medicaid provider tax cap: A critical win for the Moderate Republicans is the delay of a new 3.5% cap on state Medicaid provider taxes. This cap, which impacts how states can boost their federal Medicaid reimbursement rates, will take effect in 2032 instead of 2031.
• Extended Hydrogen production tax credit: In the new bill, the phase-out of a tax credit for hydrogen production has been extended from 2025 to 2028 for projects that begin construction before that year.

Voting on the tax bill starts soon

Republicans plan to start voting on the tax bill on Saturday with final votes coming as soon as early Sunday. Party leaders plan to bring House members back to Washington early next week for what they hope will be final approval of the measure in time for Trump’s Independence Day deadline.

However, it remains uncertain whether the 50 Senate Republicans required to pass the bill are all on board. The bill can be further altered on the Senate floor to secure the votes if needed. The House could also make more changes if Speaker Mike Johnson has trouble corralling votes for the measure.

The measure would avert a US payment default as soon as August by raising the debt ceiling by $5 trillion, the news agency said.