Senate Passes Major Budget Bill with Cuts and Tax Provisions, Heads to U.S. House Next

Strategic Insights -

In a closely watched vote, the U.S. Senate has passed a major budget bill that cuts federal assistance programs and partially pays for the extension of large tax cuts, weighted toward the wealthy. The bill, which increases the national debt by more than $3.2 trillion over the next 10 years, was approved 51-50, with Vice President JD Vance casting the tiebreaker. The bill now heads to the U.S. House for consideration, where lawmakers will decide whether to adopt the Senate's proposal or negotiate a compromise between the Senate version and one passed earlier by the House.

Key Takeaways:

  • The Senate bill cuts federal assistance programs, including Medicaid, to pay for the extension of large tax cuts, weighted toward the wealthy.
  • The bill is expected to increase the national debt by more than $3.2 trillion over the next 10 years.
  • Alaska Sens. Dan Sullivan and Lisa Murkowski joined 48 other Republicans in voting for the bill, which will add a new tax exemption for Community Development Quota fishing groups and increase a federal tax deduction for whaling captains.
  • The bill mandates four new oil and gas lease sales in the Arctic National Wildlife Refuge and requires other sales in Cook Inlet and the National Petroleum Reserve in Alaska.
  • The bill also includes provisions that will shield Alaska from some of the Medicaid cuts, including a pause on work requirements for the Supplemental Nutrition Assistance Program (SNAP) and a provision that will allow Alaska to keep Medicaid funding steady.
  • Planned Parenthood and community health centers have expressed concern about the bill's effect on their ability to maintain services, citing the loss of Medicaid revenue.

Statistics:

  • The Senate bill is expected to increase the national debt by more than $3.2 trillion over the next 10 years.
  • The bill cuts Medicaid funding nationally, but Alaska will share a $50 billion rural hospital fund and see about $300 million per year in funding from the bill.
  • 35,000 Alaskans would lose health insurance if the bill becomes law, both from Medicaid and from a scaling-back in tax credits to pay for individual health insurance.
  • Alaskans who receive Medicaid will be required to work, volunteer, or undergo job training for at least 20 hours per week unless they are sick, have children, or care for older people.

Sources:

  • Politico: Murkowski says she voted for the Senate version because it includes tax cuts she supports [https://www.politico.com/news/2025/07/01/murkowski-trump-alaska-megabill-00435981]
  • Centers on Budget and Policy Priorities: Medicaid and Health Care in the Senate Budget Bill [https://www.cbpp.org/research/health/medicaid-and-health-care-in-the-senate-budget-bill]
  • Alaska Beacon: Senate Approves Major Budget Bill with Cuts, Tax Provisions [https://alaskabeacon.com/2025/07/01/senate-approves-major-budget-bill-with-cuts-tax-provisions/]
  • Rules Committee: Markup of the Senate's version of the budget bill [https://rules.house.gov/sites/evo-subsites/rules.house.gov/files/evo-media-document/file_8654.pdf]
  • Center on Budget and Policy Priorities: Medicaid and CHIP at a Glance [https://www.cbpp.org/research/health/medicaid-and-chip-at-a-glance]
  • Community Development Quota (CDQ) Program: Tax Credits [https://www.cdq.org/tax-credits/]