Senate Passes Transformative Budget Bill Amidst Tensions

Clear Facts

• The Senate passed a significant budget bill after extensive negotiations and amendments.
• Key changes included adjustments to Medicaid provisions, clean energy tax credits, and a new tax credit for nonprofit contributions.
• Sen. Lisa Murkowski and Sen. Susan Collins played pivotal roles in advocating for amendments benefiting rural hospitals and Alaska’s SNAP program.

In a dramatic turn of events, the Senate has successfully passed what was once dubbed President Donald Trump’s “one big, beautiful bill.” This near-1,000-page budget legislation underwent significant modifications following prolonged discussions among senators.

Senators Lisa Murkowski of Alaska and Susan Collins of Maine were instrumental in pushing for amendments, particularly concerning Medicaid provisions and clean energy tax credits. Their efforts led to critical negotiations with Senate Majority Leader Thune throughout the night.

Sen. Collins, despite ultimately voting against the bill, was a strong proponent for increased funding for rural hospitals impacted by Medicaid provider tax legislation. Initially advocating for a $100 billion rural hospital fund, Collins saw a $25 billion safeguard fund incorporated into the bill. Although her attempt to raise the fund to $50 billion through increased taxes on billionaires was defeated, the increased rural hospital fund was included without raising taxes.

The Senate Republicans also made last-minute changes to the green energy provisions. They removed a contentious excise tax and introduced tax credits for solar and wind projects that commence construction within a year of the bill’s passage. These projects must produce electricity by the end of 2027 if construction begins after summer 2026.

A noteworthy addition to the budget bill is a new tax credit for contributions to nonprofits that grant scholarships to elementary and secondary schools. This provision includes taxable contributions to scholarship organizations supporting eligible students within the state.

Democratic Senator Mark Kelly from Arizona successfully included his proposal to amend the Internal Revenue Code of 1986. His measure aims to restore the Real Estate Investment Trust (REIT) subsidiary asset test, increasing the asset percentage threshold from 20% to 25%, thus granting REITs more flexibility in structuring their subsidiary holdings.

The bill’s original name, the “One Big Beautiful Bill Act,” was officially removed by Democrats using special Senate budget rules. This move mirrors previous actions, such as the repeal of the Inflation Reduction Act title in 2022.

In a nearly unanimous vote, the Senate eliminated a proposed ten-year moratorium on state and local artificial intelligence (AI) regulation. Republican Senator Marsha Blackburn of Tennessee introduced the amendment to revoke the ban, citing concerns that existing carveouts could “allow Big Tech to continue to exploit kids, creators, and conservatives.”

Senator Murkowski also secured amendments to the Supplemental Nutrition Assistance Program (SNAP) for Alaska, claiming these changes provide “greater flexibility” for her constituents. However, some Democratic senators, including Amy Klobuchar of Minnesota, criticized the Alaska-specific provisions, arguing that other states deserve similar considerations.

Despite the bill’s passage, Murkowski expressed her dissatisfaction, stating, “Do I like this bill? No. But I tried to take care of Alaska’s interests.” She remains hopeful that the House will send the bill back to the Senate for further revisions.

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