Senate Passes Tax Bill, Cuts Medicaid Funding

Jul. 2, 2025, 6:47 am ET

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30-Second Take

  • The Senate has passed a tax-cut bill that includes significant cuts to Medicaid, impacting millions of Americans.
  • The bill is expected to increase the number of uninsured individuals by nearly 11 million.
  • Health care providers and low-income families are among those most affected by the proposed changes.

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Quick Brief

2-Minute Digest

Essential Context

The Senate’s passage of the tax-cut bill, which includes substantial reductions in Medicaid funding, marks a significant shift in health care policy. This move is part of a broader effort to finance tax cuts proposed by President Trump.

Core Players

  • President Trump – Key proponent of the tax-cut bill.
  • Senate Majority Leader John Thune – Led the effort to pass the bill in the Senate.
  • Republican Sens. Rand Paul, Susan Collins, and Thom Tillis – Opposed the bill due to its health care provisions.
  • Vice President JD Vance – Cast the tie-breaking vote in favor of the bill.

Key Numbers

  • $4.5 trillion – Total value of the tax-cut bill.
  • 11 million – Estimated number of people who could lose health insurance due to the bill.
  • 10.3 million – Projected reduction in Medicaid enrollment over 10 years.
  • $793 billion – Reduction in federal spending on Medicaid over 10 years.

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The Catalyst

The Senate’s narrow passage of the tax-cut bill on July 1, 2025, with a vote of 51-50, was a crucial step in President Trump’s economic agenda. Vice President JD Vance’s tie-breaking vote was decisive.

“With this legislation, we’re fulfilling the mandate we were entrusted with last November and setting our country, and the American people, up to be safer, stronger, and more prosperous,” said Senate Majority Leader John Thune.

Inside Forces

The bill faced significant opposition from Democrats and some Republicans, particularly due to its health care provisions. Sen. Susan Collins expressed her concerns, stating, “My vote against this bill stems primarily from the harmful impact it will have on Medicaid, affecting low-income families and rural health care providers like our hospitals and nursing homes.”

The internal dynamics within the Republican party were critical, with last-minute changes aimed at securing enough votes for passage.

Power Dynamics

The passage of the bill highlights the influence of President Trump and Senate Majority Leader John Thune within the Republican party. Despite opposition, they managed to rally enough support to push the bill through the Senate.

The White House has emphasized that the bill does not cut Medicare or other welfare programs, but rather aims to eliminate waste and fraud in Medicaid to better serve vulnerable populations.

Outside Impact

The bill’s impact on health care access is far-reaching. According to the Congressional Budget Office, nearly 11 million people could lose health insurance, and another 5.1 million could become uninsured due to changes in Affordable Care Act subsidies and rules.

Hospitals and doctors have opposed the bill due to the significant cuts in Medicaid funding, which they argue will harm low-income families and rural health care providers.

Future Forces

The bill now moves to the House, where it faces further scrutiny. The health care provisions are expected to be a key point of contention.

Looking ahead, the bill’s implementation could lead to a significant increase in the number of uninsured individuals, with estimates suggesting up to 16 million people could lose their health insurance over a decade.

Data Points

  • July 1, 2025: Senate passes the tax-cut bill with a vote of 51-50.
  • 10 years: Projected timeframe for $793 billion reduction in federal Medicaid spending.
  • 2034: Year by which Medicaid enrollment is estimated to decrease by 10.3 million.
  • 16 million: Total number of people who could become uninsured over a decade.

The passage of this tax-cut bill sets the stage for significant changes in the U.S. health care landscape. As the bill moves to the House, the future of health care access for millions of Americans hangs in the balance.