The package includes $13.5 billion to reimburse states for border spending. It is expected to meet resistance in the House from some Texas Republicans.
Following a 26-hour marathon voting session and lengthy, late-night negotiations, the U.S. Senate has passed its version of Republicans’ landmark tax and spending bill with both Texas senators, John Cornyn and Ted Cruz, voting for the legislation.
The upper chamber’s draft is all but certain to face headwinds as it heads back to the House, including from some Texas Republicans, who passed their own version with steeper cuts in late May.
The bill, dubbed the “One Big Beautiful Bill,” includes a slew of GOP requests and President Donald Trump’s priorities, including cuts to Medicaid, changes to the Supplemental Nutrition Assistance Program that could place a higher spending burden on states and rollbacks of the clean energy tax credits first introduced in the 2022 Inflation Reduction Act.
Texas’ senators touted provisions they worked into the bill.
Cornyn pushed for the federal government to reimburse Texas for the billions it spent on Gov. Greg Abbott’s signature border security program, “Operation Lone Star,” under the Biden administration. The Senate package includes $13.5 billion in state reimbursement grants — up from $12 billion in the House version — with Texas getting the largest claim to the funds.
He also worked to eliminate a tax on select firearms and silencers and incorporated a provision that would ask the NASA administrator to consider relocating the Space Shuttle Discovery from Virginia to Houston.
Cruz also scored two major wins he has framed as integral to the bill’s long-term legacy, including a provision that would grant a $1,000 government-seeded investment account — branded as “Trump accounts” — to every American child. The money could be used for education expenses, a house down payment or starting a small business.
He also secured a $1,700 annual tax credit for individuals that contribute to nonprofits that grant scholarships to elementary and secondary school students, a framework supporters call “school choice” and that is similar to private school vouchers. Early Tuesday morning, Cruz and his fellow Republicans voted down a Democratic-led amendment attempting to remove the provision from the bill.
Abbott signed a landmark voucher program bill in May that allows families to use taxpayer funds to pay for private school tuition and other education-related expenses.
Through the GOP megabill, Cruz is also looking to auction off parts of the government-owned wireless spectrum to private companies. Under this provision, the Federal Communications Commission would sell select spectrum frequencies, which are currently under federal control, to bidders to use for wireless communication. Cruz sees it as a tool to spur technological innovation.
Cruz faced backlash from some of his GOP colleagues, Texas lawmakers and outside groups over a provision that would require states to not regulate artificial intelligence for a period of 10 years in order to access a pot of $500 million in federal AI infrastructure funding.
On Monday, Cruz and his chief opponent, GOP Sen. Marsha Blackburn of Tennessee, struck a deal to shorten the moratorium to just five years while loosening the hardline restrictions on regulation. The deal fell apart Monday evening when Blackburn expressed concern that the compromise language “could allow Big Tech to continue to exploit kids, creators and conservatives.”
The provision was ultimately stripped out on the Senate floor when 99 senators, including Cruz himself, joined forces with Democrats to vote for an amendment that killed the moratorium.
Trump has been adamant that he wants the bill on his desk by July 4, but that self-imposed deadline is already encountering resistance from GOP hardliners, including some Texas Republicans.
U.S. Reps. Chip Roy of Austin, Keith Self of McKinney and other agitators in the House Freedom Caucus have drawn a line in the sand around repealing the Inflation Reduction Act tax credits, which they have taken to calling the “green new scam.” Clean energy advocates say the credits provide an important incentive for companies to build more wind and solar farms that create jobs and generate cheap, emissions-free power that is needed to slow climate change.
With a desire to mitigate the federal deficit, Roy and his cadre have homed in on a full repeal of IRA tax credits — which subsidize clean energy projects in Texas and across the country — as an avenue to cut spending. He claims that renewable energy sources the credits incentivize are unreliable and benefit Chinese manufacturers who make products such as solar panels. Wind and solar power generators only operate when the wind blows or the sun shines, unlike gas- or coal-fueled plants that can theoretically run anytime but emit air pollution.
Texas is a top producer of wind and solar power in the nation, and efforts during the state legislative session to hamper the industry largely fell apart. State grid operators have warned that electricity demand is expected to grow significantly in coming years, a need that renewable energy advocates say solar and wind projects can quickly help meet.
But renewable energy trade associations and advocacy groups have been sounding the alarm about potential damage if federal lawmakers drastically alter or cut the credits, which they say generate billions in private sector and manufacturing investments; produce millions in revenue for communities and landowners; and keep consumer electricity costs low.
“This bill, if passed as currently drafted, will destroy projects in active construction and development, killing tens of thousands of jobs across Texas, stranding billions in investment and raising electricity prices at a time of rising (electricity) demand,” said Harry Godfrey, managing director with the industry association Advanced Energy United, early Monday evening.
In its current form, Roy has threatened to vote against the bill because it still didn’t go far enough. With a slim House majority and Democrats unanimously opposing the package, Speaker Mike Johnson, R-Louisiana, cannot afford to lose more than a few votes. This gives Roy and other individual members outsized leverage they could use to bring their priorities to fruition.
Trump has made clear he expects the bill to be affixed with his signature by the July 4 holiday, creating mounting pressure on the holdouts to vote for the bill so as to avoid the president’s ire.
“They need to change it if they want us to be able to support it,” Roy told The Texas Tribune, referring to congressional leadership. The odds the House passes the bill by Trump’s deadline is now “a hell of a lot lower than they were even 48 hours ago or 72 hours ago,” Roy said.
In a statement, Johnson signaled that he intends to keep the July 4 deadline. “The American people gave us a clear mandate, and after four years of Democrat failure, we intend to deliver without delay,” he said.
U.S. Rep. Troy Nehls of Richmond is also upset about the Senate’s move to water down taxes on private universities’ endowments. In the House version of the bill, earnings on some institutions’ endowments could be taxed up to 21%. In the Senate draft, the maximum was lowered to 8%.
But given his alliance with the president, Nehls admitted he’d get behind the push if Trump asked him to.
In a call with reporters, Roy dismissed the deadline, saying, “I’m not going to vote for something just because they’ve set up a pressure cooker.” He told the Tribune on Tuesday that he was unafraid of facing a primary challenger, a threat Trump routinely invokes when GOP lawmakers do not fall in line with his priorities.
Roy and other Freedom Caucus members threatened to oppose the bill on the floor when the House passed its original version in May before eventually backing down.
“The only reason I voted for the House bill in the end was that we got those significant wins on the Inflation Reduction Act,” he said. “You take those away and water those down, and I’m out.”
Democrats remained uniformly opposed to the bill, criticizing its cuts to health care and tax breaks for high earners.
U.S. Rep. Greg Casar, D-Austin, blasted Vice President JD Vance, who cast the tie-breaking vote, saying his rhetoric about helping the working class was hypocritical.
“When it mattered, he was the deciding vote to slash Medicaid to bits to pay for billionaire tax breaks,” he said.
Rep. Marc Veasey of Fort Worth called the bill “a full display of chaos and corruption” and said Republicans “voted to defund your health care to give billionaires a tax cut.”
Source: Owen Dahlkamp, The Texas Tribune
Photo Credit: Credit: Shuran Huang for The Texas Tribune
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