“One Big Beautiful Bill” Shrinks in the Senate: What’s Still In, What’s Out
Summary
The “One Big Beautiful Bill” is going through big changes this week as lawmakers gear up to attempt a vote on the floor before the July 4th holiday. After a few Parliamentarian rulings and struck clauses due to the Byrd-Rule, the package has been pared back sharply from its original form in the House. Lawmakers largely remain at a standstill as we wait to see if Republicans can successfully rework provisions to survive reconciliation.
We’re breaking down what’s going on below.
The Senate’s Two Major Hurdles: The Byrd-Rule, and the Parliamentarian
Under the Senate’s Byrd-Rule, provisions that are deemed “extraneous” or marginal to the overall budget must be removed from the package. As a result of the rule, the GOP saw measures like enhanced funding caps on the CFPB, a repeal of certain EPA standards, and a public-land sell-off plan introduced by Senator Mike Lee struck from the bill.
Along with the Byrd-Rule’s trimming, Senate Parliamentarian Elizabeth MacDonough took her own red pen to the package, rejecting dozens of items violating reconciliation criteria. Efforts to streamline federal merger reviews and roll back emissions rules were among the clauses struck.
Major Provision Changes:
CFPB & Financial Oversight Cuts: Proposals to cut the Consumer Financial Protection Bureau’s budget and fold the Public Company Accounting Oversight Board into the SEC were struck down.
Environmental Deregulation: Moves to expedite offshore oil and gas leasing by bypassing NEPA reviews, and to repeal EPA vehicle‐emission standards, were ruled out.
SNAP Work Requirements: Tightened work and verification mandates for SNAP recipients—along with state cost-sharing penalties—were found noncompliant with reconciliation rules and removed.
Federal Courts: Removed from the bill was language that limited the ability of federal courts to delay or halt the government’s policies by requiring people suing the federal government to post a bond to cover potential costs and damages incurred.
Border Security and Immigration: Traditionally, the federal government retains the responsibility to authorize border security measures and immigration enforcement, an authority that the bill sought to give to states. This, MacDonough ruled, was a violation of the Byrd-Rule.
A lot of core elements of the bill still remain intact, including:
Tax Extensions & Credits: Permanent extensions for expensing and R&D incentives, a reduction in Child Tax Credit (to $2,200), and new caps on overtime and tip deductions remain in place.
SALT Placeholder: A $10,000 state-and-local tax deduction cap stands as a placeholder while GOP negotiators haggle over a higher figure.
Medicaid Work & Tax Cuts: Work requirements for able-bodied adults and deeper provider-tax reductions for Medicaid-expansion states persist, though specifics may shift in the final text.
Major Differences Between the House Bill and Senate Changes
| Topic | House Version | Senate Version |
|---|---|---|
| Child Tax Credit | Temporary increase to $2,500 per child through 2028 | Reduced to $2,200 per child |
| SALT Deduction Cap | Raised from $10,000 to $40,000 (phased out for incomes > $500k) | Placeholder cap at $10,000 (negotiations ongoing) |
| Senior Deduction | Standard deduction boost of $4,000 for seniors | Increased deduction of $6,000 for seniors |
| Overtime & Tips Tax | Elimination of federal tax on tips and overtime with no caps | Tax-free tips/overtime with caps at $25k (tips) and $12.5k (overtime) |
| Medicaid Work Requirements | No new work requirements; preserves existing eligibility rules | Adds requirements for able-bodied adults; verification and hours mandates |
| Green Energy Credits | Full repeal of select IRA clean-energy credits | Softened IRA phase-outs; fewer rollbacks of clean-energy incentives |
| Debt Ceiling Increase | Increase debt ceiling by $4 trillion | Raises the ceiling by $5 trillion |
We’ve talked at length about the impact that this bill will have on Pennsylvania, should it pass as-is, and the analysis largely remains the same. If and when the bill passes the Senate and returns to the House, we’ll catalog the major changes and their implications.
The GOP faces a very tight vote margin—losing more than three votes would doom the bill. Senate leadership maintains that a vote could be done this week, but a number of senators and aides are in doubt about whether or not that will happen. Key provisions remain in major flux, and any amendments or major parliamentary rulings could push the vote to later in the summer. We’ll continue to monitor committee markups and official announcements in the coming days. Stay tuned for updates on when—and if—senators cast their ballots.
Unless we see movement for the bill before next Wednesday, we’ll be taking a break for the holiday. Stay tuned for updates on when—and if—senators cast their ballots.
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