Senate passes ‘big, beautiful bill:’ What it means for Michigan

• US Senate votes 51-50 to advance Trump-backed tax, spending bill 
• The sweeping legislation makes major changes to the federal tax structure, Medicaid, energy programs, student loans and more
• Proposal must clear US House before advancing to President Trump, who has called for its passage by the Fourth of July

President Donald Trump and Congressional Republicans are one step closer to finalizing the administration’s so-called “big, beautiful bill” — sweeping legislation promising tax breaks and spending increases on border security while slashing spending on Medicaid and food assistance.

The US Senate on Tuesday voted 51-50 — with a tiebreaking vote from Vice President JD Vance — to advance its version of the massive tax and spending bill back to the House for final approval. 

The legislation is a top priority of President Donald Trump. He and his allies contend new and extended tax cuts in the bill would save the average family of four $1,700. They’ve largely dismissed complaints that proposed cuts to Medicaid and food assistance would hurt some of the country’s most vulnerable residents. 

"The biggest winner of them all will be the American people," Trump said in a social media post celebrating the Senate vote. He predicted the country will "explode with Massive Growth" if the House signs off on the final plan. 

Critics include Michigan’s two US senators, both Democrats, who voted against the legislation Tuesday. 

The plan “will make Michiganders pay in every part of their lives,” including health care, energy and housing, US Sen. Elissa Slotkin said in a statement. 

Michigan Gov. Gretchen Whitmer, also a Democrat, called the proposed cuts to Medicaid and food assistance “cruel and extreme,” suggesting Republicans “sacrificed the health and well-being of hardworking American families to pay for sweeping tax cuts for the wealthiest among us.”

The overall thrust of the Senate-passed legislation — extending Trump’s first-term tax breaks, infusing funds into Trump priorities like immigration enforcement, cutting spending on public assistance programs — is similar to the plan that passed the House last month. 

But key differences added to the legislation could complicate its final passage through Congress as the Republican majority navigates competing priorities. 

During a Monday press briefing, White House Press Secretary Karoline Leavitt said Trump was “adamant” the bill reach his desk by the Fourth of July, calling on Congressional Republicans “to stay tough and unified” as the plan returns to the House. 

“We need the full weight of the Republican conference to get behind this bill,” Leavitt said. “We expect them to, and we are confident that they will.” 

US Rep. Lisa McClain, R-Bruce Township, expressed confidence Tuesday that House Republicans were prepared to move quickly on a bill that would deliver on several Trump campaign pledges. 

“A NO vote breaks the promise made to the American people,” McClain wrote in a social media post following the Senate vote. “The time is now. Failure is not an option.” 

Here’s a look at what’s in the latest plan, and what it might mean for Michigan residents: 

Keep existing tax breaks

Both the US House and Senate voted to extend roughly $4.5 trillion in tax breaks approved in the 2017 Tax Cuts and Jobs Act during Trump’s first term. Absent congressional action, those breaks would expire at the end of the year. 

Extending the existing tax provisions would mean at least 62% of filers would avoid a tax hike in their 2026 filings, according to the Tax Foundation.

Failure to do so would mean an average tax increase of $2,119 for Michigan residents, according to the foundation’s figures. 

While high earners would see a clear benefit from the cuts, significant changes to Medicaid and the Supplemental Nutrition Assistance Program could make the changes a net negative for lower-income individuals and families, analyses by the nonpartisan Congressional Budget Office and other organizations show.

An analysis by the left-leaning Institute on Taxation and Economic Policy found the top 5% of tax filers in Michigan would receive 40% of the net tax cuts. 

Expand deductions, create new ones

The Senate-passed version of the legislation would increase the child tax credit to $2,200 per child starting in tax year 2025 and adjust for inflation into perpetuity. 

It would also make permanent a proposed increase in the standard deduction, bringing the total to $15,750 for individuals and $31,500 for joint filers and adjusted for inflation in future tax years. 

That’s a departure from the plan House lawmakers passed last month, which called for temporary deductions through 2028. 

Other, temporary, tax cuts in the Senate plan include deductions of up to $12,500 for overtime pay and $25,000 for tip income through 2028, though the reductions would drop for filers making $150,000 or more. 

Low- and middle-income seniors would see a maximum $6,000 increase in tax deductions over the same time frame to offset taxes on Social Security benefits.

Businesses could be eligible for writeoffs on equipment and research and development costs. Consumers buying new, US-built vehicles would be eligible for up to $10,000 in deductions, which could benefit Michigan automakers.

Growing the deficit

The federal debt has grown 121% since 2015, and interest payments alone on it cost $881 billion this fiscal year — more than the government spends on veterans or children. By 2034, interest costs could consume 20% of federal revenue, according to a US House analysis.

Since the pandemic, the federal deficit has doubled to nearly $1.8 trillion.

As it currently stands, the bill would add to that figure, reducing federal revenues by $4.5 trillion over the next decade while reducing government spending by $1.2 trillion, according to a report from the nonpartisan Congressional Budget Office. 

The proposed $3.3 trillion net deficit is causing heartburn among some conservatives in the House, who fear the Senate isn’t making enough cuts to offset tax revenue losses. 

The Senate version would also increase the debt ceiling by $5 trillion, higher than the House’s proposed $4 trillion. 

The Trump administration, through its new Department of Government Efficiency, has sought to further trim spending by firing government workers and slashing federal spending for public health, research, criminal justice and the arts, among other things. 

DOGE, initially led by billionaire business owner Elon Musk, claims it’s saved $190 billion thus far, though those calculations have frequently contained major errors or misleading claims.

Even taken at face value, the department’s cuts would be vastly outpaced by the loss of revenue from the proposed tax breaks.

Major Medicaid changes

To partially offset tax cuts that would grow the deficit, the proposal is projected to significantly cut spending on Medicaid, including through work requirements that would begin Dec. 31, 2026. All told, estimates indicate the federal government could save more than $900 billion over the next decade under the latest version of the plan.

In Michigan, Medicaid provides health insurance to more than 2.6 million people, or 1 in 4 state residents, primarily with lower-than-average incomes. Some 200,000 residents could lose their coverage under the federal legislation, according to Gov. Gretchen Whitmer, who strongly opposes the plan. 

The federal government spent $584 billion on Medicaid in 2024, up from $52.5 billion in 1991.

Under the GOP plan, able-bodied adults under age 65 would need to provide proof twice a year of at least 80 hours a month of completing “community engagement requirements,” such as work, education or service to keep their coverage. The plan exempts seniors, parents of children aged 14 and under and people with disabilities. 

Proponents argue the plan would reduce Medicaid fraud and encourage able adults to return to the workforce or engage with their community.

But critics are concerned the new requirements could leave a wide swath of otherwise eligible people without coverage if they’re unaware of the changes or make a mistake in their paperwork.

“The hardest hit…are people that need health care, and then it also contributes to uncompensated care for hospitals as well,” said Laura Appel, executive vice president of the Michigan Health and Hospital Association. She called the plan as written “a recipe for more people losing coverage.” 

Michigan and other states were moving toward work rule requirements under the first Trump administration over objections by the Whitmer administration, before a federal court ruling ended the effort.

Rural hospitals, state budget cuts

Another provision in the bill would cap and reduce state Medicaid provider taxes starting in 2028, a strategy that Michigan and other states use to leverage federal funding for Medicaid. Industry advocates say those changes could have an adverse impact on rural hospitals, which often rely on Medicaid reimbursements to stay open. 

The Senate plan initially included a $25 billion fund for rural hospitals, with payouts starting in 2028 and spread out over five years. A last-minute amendment bumped that amount up to $50 billion, according to CNN.

A provision to block coverage for undocumented immigrants likely would not impact Michigan, which already limits eligibility to citizens and legal residents. 

States like Michigan, where the vast majority of Medicaid funds come from the federal government, would have to figure out how to reduce services, trim people from the program or backfill the cuts with millions of dollars from other programs — public safety and infrastructure, for example.

A recent report from the Democratic-led state Senate warned the federal legislation could “blow a $2 billion hole into the state budget” noting that roughly 70% of state spending on the program comes from federal sources.

“The magnitude is hard to wrap your head around, because we just don't have the resources at the state level to backfill a cut of this nature,” State Budget Director Jen Flood previously told Bridge Michigan. 

SNAP pulled back 

Like the House version, the Senate plan includes an estimated $285 billion reduction in federal spending over the next decade for the Supplemental Nutrition Assistance Program (SNAP), the federal food stamp program that supports roughly 1.5 million people in Michigan. 

Changes proposed in the Senate plan include capping annual increases in benefits, as well as expanding existing work requirements for food assistance to older adults and parents of children over the age of 10.

Karianne Martus, manager of the Flint Farmers Market, predicted Tuesday that the changes to SNAP could be destabilizing for thousands of households in Genesee County and market patrons, many of whom take advantage of Double Up Food Bucks or other food assistance programs to access fresh fruits and vegetables. 

Food assistance “gives people choices, it provides them nourishment, and it gives them stability,” she said. “I can’t even imagine what this is going to do to the whole ecosystem of our community.”

States would also have to cover some costs of the program and would have less flexibility to waive certain work requirements. 

Most immigrants with legal status, including refugees, would be barred from receiving food assistance under the plan. 

States would be required to cover between 5% and 25% of benefit costs, plus 75% of administrative costs, which the State Budget Office estimates would cost Michigan around $890 million a year. 

Scrap EV, clean energy credits

On his first day in office, Trump vowed to end a so-called “electric vehicle mandate” and wind down green energy initiatives backed by former President Joe Biden.

That includes a $7,500 tax credit for consumer purchases of new electric vehicles, which Trump promised to eliminate during Michigan campaign stops. Those tax subsidies would end under the proposed legislation.

Also on the chopping block: tax credits incentivizing clean energy production from the 2022 Inflation Reduction Act, which coincided with several major federal investments in Michigan projects. 

Trump previously rescinded a Biden order that had established a national goal for 50% of all cars in the US to be zero-emissions by 2030 and directed the Environmental Protection Agency to establish related emissions and fuel economy standards. 

The changes could have a significant impact on Michigan automakers, which have already committed billions of dollars to transition to EVs and build batteries, and other businesses investing in renewable energy. 

A dozen vehicles produced by Detroit’s Big Three currently qualify for EV tax credits, which would go away under the legislation. 

Clean energy advocates panned the plan Tuesday, predicting the legislation could put more than 25,000 industry jobs at risk in Michigan alone and drive up energy costs. 

“At a time when energy demand is surging and families are already struggling to make ends meet, this bill would raise costs, make the grid less reliable, and make the U.S. more dependent on foreign oil,” said Lori Lodes, executive director of the advocacy group Climate Power.

Spending boost for border security, immigration fee hikes

The plan as written invests heavily in border security and immigration enforcement, directing $46.5 billion towards border wall construction and billions more to detention facilities, surveillance technology, border security and the hiring and training of Immigration, Customs and Enforcement staff. 

Immigrants applying for humanitarian parole, temporary protected status, or work authorization would be subject to higher fees under the legislation. 

A former private prison facility in Michigan was recently tapped by ICE to serve as an immigrant detention center. If operated at full capacity, it’s poised to be the largest detention facility in the Midwest, and company officials estimate it could generate $70 million per year in profits. 

Homeland Security Secretary Kristi Noem also recently visited the state, vowing not to neglect security at the country’s US-Canada border.

Student loan shakeup

As currently written, the GOP plan would eliminate several Biden-era repayment options for student loans, including the SAVE plan, an income-driven repayment program that accelerated the timeline for borrowers to get their loans forgiven after making several years of payments.

Those would be replaced with two repayment options for borrowers who take out new loans or consolidate existing ones after July 1, 2026: a standard repayment plan with fixed monthly payments and a “Repayment Assistance Plan” calculating monthly payments based on total adjusted gross income. 

There are roughly 1.4 million federal student loan borrowers in Michigan with an average of nearly $37,000 per borrower, according to the Education Data Initiative. Interest rates vary depending on the loan type and when it was taken out. 

Republican lawmakers estimate the plan could save $330 billion over the next decade. 

When announcing the repayment plan framework in April, US Rep. Tim Walberg, R-Tipton, said the current student loan system “is effectively broken and littered with incentives that push tuition prices upward,” calling the budget reconciliation process “a key opportunity to right-size this sinking ship.”

For future borrowers seeking income-based repayment assistance, the plan would require a minimum $50-per-month payment and includes adjustments for borrowers with children. 

Critics argue basing the calculations on adjusted gross income instead of a borrower’s discretionary income could mean some borrowers will have to choose between basic necessities and affording their student loan payments.