U.S. Senate to Vote on $4.2 Trillion Tax Plan This Independence Day

• The Senate unveiled a $4.2 trillion tax and spending bill amid party compromises.
• Medicaid cuts and SALT deduction changes reflect intra-party negotiations on key provisions.
• A $25 billion fund is set for rural hospitals, with the bill vote scheduled before July 4.

U.S. Senate Republicans have released a revised $4.2 trillion tax and spending bill, a move that comes as President Trump’s July 4 deadline for passage draws near. The 940-page draft, released late Friday night, marks a huge step in the Republican-controlled Senate’s push to overhaul the nation’s tax and spending policies before the Independence Day holiday.

What Are the Key Compromises in the Bill?

The newly revised bill reflects a series of major compromises aimed at reconciling different factions within the Republican Party. Among the most notable provisions is a temporary increase in the cap on State and Local Tax (SALT) deductions. The bill proposes raising the current $10,000 limit to $40,000 for five years, a key demand from lawmakers in high-tax states.

Related: U.S. Senate Committee OKs Stablecoin Bill, Balancing State & Federal Roles

Another significant change involves the federal cap on Medicaid provider taxes. The Senate’s original proposal to cut the provider tax was postponed to 2028 after strong objections from members like Senator Thom Tillis of North Carolina, who warned the move would result in over $30 billion in lost funding for his state alone.

Does the Bill Address Other Concerns?

In a direct response to concerns about rural healthcare, the legislative package now introduces a new $25 billion fund specifically to support rural hospitals. This fund is set to distribute $20 billion during the 2028 and 2029 fiscal years, a compromise figure that followed intense negotiations where proposals had ranged from as low as $15 billion to as high as $100 billion. 

Related: ‘Buy a Coffee With Crypto’: Ohio Bill With $200 Tax Break Advances to Senate

The bill’s late-night release also came after a series of last-minute negotiations to win over key holdouts and to address procedural requirements from the Senate parliamentarian, which resulted in several initial provisions being removed from the final text.

What Happens Next in the Legislative Process?

With President Trump’s deadline looming, Republican leaders have scheduled the bill’s initial voting process to begin on Saturday at noon local time. A final vote on the massive package could occur in the early hours of Sunday morning. 

Following the Senate vote, the House of Representatives is expected to be recalled to Washington next week, a move designed to allow the entire legislative process to conclude before the July 4 holiday.