The Failures of the Senate OBBB
House Freedom Caucus and other conservatives unveil major problem points in new three page memo.
A major scoop just hit the “wires”: Mica Soellner from Punchbowl News just obtained a memo written by the House Freedom Caucus and other conservatives that unveils major problem points in the Senate bill.
Since I have so many people asking me about my issues I’m having with the “One Big Beautiful Bill,” I thought this would be instructive and a good jumping off point. It’s clear, direct, and within the first paragraph, you’ll find the words:
"This was not what Leader Thune and Speaker Johnson promised."
THE SENATE OBBBA FAILURES
TOPLINE: This Senate bill - relative to the House: 1) increases deficits, 2) waters down the already only partial repeal of the "Green New Scam" leaving, at best, 50% intact, 3) fails to ensure illegals are fully removed from Medicaid rolls, 4) eliminates the prohibition on Medicaid and CHIP funding for transgender surgeries, 5) only limits Planned Parenthood funding for one year not ten, 6) contains excessive pork for Alaska and Hawaii, and 7) includes more expensive SALT provisions (for just 5 years to reduce the "cost" as a gimmick) to bail out blue states in high tax jurisdictions electing socialists to run their cities.
Increases Deficits
The bill violates the House framework of $1 of tax cuts for $1 of spending cuts (with 2.6% economic growth), increases the deficit by $761 billion without interest and more $1.3 trillion with interest after changes were made in the base text and a wrap-around amendment was adopted. This does not include the impact of the tax cliff for the Trump tax cuts and SALT, nor the realistic impact of RECA, an expansive rural hospital fund, and IRA failures. This was not what Leader Thune and Speaker Johnson promised.
Fails to Terminate Biden's "Green New Scam."
The Senate bill does require wind and solar (the 45Y PTC and 48E ITC) projects to be "placed in service" by the end of 2027, BUT:
• It guts the benefit by including a last-minute carveout for projects that "begin construction" a year after enactment, which will create a race to do the minimum 5% construction spending to lock in subsidies well past 2027.
• It fails to rectify the House bill's failure to terminate subsidies for non-wind/solar
"green technologies" like battery storage, carbon capture, etc.
• It puts back swampy credit transferability that perpetuates the scam (ended by the House).
Gives China a pass to profit off Biden's "Green New Scam" subsidies. The Senate weakened the House's strict "foreign entity of concern" restrictions prohibiting subsidies from benefiting Chinese-owned projects and companies.
Stripped Key Protection Against Illegals Getting Medicaid
Under current law, most illegal aliens are not supposed to be on Medicaid, but it is estimated that more than 1.5 million are receiving benefits (report). Sec. 71109 in the Senate bill does tighten the prohibition (which CBO does score as some savings, but consider that they also assume an unrealistic 90% compliance for the bill's Medicaid work requirements). However, the Senate stripped out the teeth that penalize states that continue to fund Medicaid for illegal aliens with state dollars by reducing their federal reimbursement rate for able-bodied adults by 10%.
Illegal Aliens with "Trump Accounts"
The Senate dropped the requirement that at least one of the parents of children obtaining the new "Trump Accounts" (tax-incentivized savings accounts that would receive $1,000 from the federal government under a pilot program created in the bill) have a valid Social Security Number. While children must be citizens under the bill, their parents may now be here illegally.
Waters-down House provision to curb waste, fraud, and abuse in SNAP
The Senate weakens the House-passed bill's common-sense reforms to implement strong work requirements by raising the age of children for parents to be exempt to age 14 from 7, and it fails to prevent blue states from gerrymandering counties and cities to get around the work requirements.
Loaded with pork to buy key Senate votes to secure passage
The Senate included a $50 billion hospital slush fund, 100% tax deduction for meal expenses on Alaskan fishing boats, and special lower thresholds for waivers for Alaska for SNAP work requirements and state cost share requirements, even after giving them a blanket waiver through 2028. This carve-out rewards any state with SNAP payment error rates above 13% by delaying cost-share payments and will actually encourage more waste, fraud, and abuse in food stamps.
Slashes the 3.5% House tax on remittances, which were meant to curb illegal immigration, and expands the tax to United States Citizens
Under pressure from bank lobbyists, the Senate gutted $16 billion in savings from the House bill by lowering the tax to only 1%, carving out bank remittances, and eliminating House language that exempted American citizens. The bottom line: the House version raises more money at a HIGHER rate, while ensuring the tax only applies to illegal and foreign workers, NOT AMERICANS.
Doesn't deliver substantive Health Savings Account (HSA) expansion for Americans
The Senate watered down the House HSA language and only restored HSAs for catastrophic and bronze plans and direct primary care, wasting a once-in-a-decade opportunity to deliver more healthcare freedom for Americans.
Fails to stop taxpayer-funded sex changes and abortion
The House prohibited transgender funding for Obamacare, Medicaid, and CHIP dollars. The Senate bill means taxpayers will still be funding transgender surgeries in Medicaid, CHIP, and Obamacare. Furthermore, leadership promised that by passing the OBBBA, we would be defunding Planned Parenthood for a decade; the Senate only does it for a year.
Continues multi-billion-dollar tax loopholes for foreign tobacco companies
The latest Senate text does not include a House-passed provision that eliminated the double-drawback duty, a tax loophole exploited by foreign-owned tobacco companies to the tune of billions of dollars.
Radically expands the eligibility of the costly RECA Fund
Under the Senate bill, the RECA fund will realistically cost at least $150 billion beyond the CBO score. Under this proposal, if someone had cancer years ago and insurance covered all their treatments, and they live in one of these areas, they can still qualify for the $50,000 even if the illness had nothing to do with radiation exposure. There is no prohibition on "double dipping" - meaning individuals would qualify for this in addition to other compensation funds.
Undermines Second Amendment Protections
The Senate removed the SHORT Act, which eliminates taxes and registration requirements on suppressors and short-barreled rifles/shotguns in the NFA, and the Hearing Protection Act, which removes suppressor regulation from the NFA. The final text does include a provision eliminating the taxes, but registration will continue to apply.
SALT Blue States Handout
The Senate initially proposed to change the House-passed OBBBA SALT deduction cap of $40,000 to $10,000, but instead accepted the House cap, however, for only 5 years instead of 10 years, setting a SALT cliff in 5 years for a future Congress. Additionally, when you factor in the Senate Alternative Minimum Tax (AMT) changes, the cost of the tax is actually two-thirds more expensive according to CRFB estimates.
Partial Medicaid Improvements
The Senate does partially address Medicaid "money laundering" by phasing down the provider tax safe harbor threshold to 3.5% in Medicaid expansion states and freezing it in non-expansion states, and reducing State Directed Payments to Medicare rates. The Senate OBBBA does not, however, address the incentive that provides states with 7 times more federal funding for the able-bodied than the traditional, vulnerable population on Medicaid. Nor does the Senate OBBBA require states to mandate that individuals show proof of citizenship for Medicaid.
Other Failures:
In total, the Senate gutted House spending cuts and added new spending to the tune of more than $400 billion. Absent these cumulative changes, the Senate bill would have at least been in the ballpark of the House framework (before wraparound amendment changes). These losses include (1) gutting House reforms to SNAP; (2) undermining the House's reforms to student loan programs; (3) slashing the House's endowment tax on "woke" elite universities; (4) eliminating President Trump's provision to close tax loopholes abused by professional sports team owners; (5) massively expanding tax subsidies for semiconductors, despite the President's call to "get rid of the CHIPS Act" during his address to Congress, in addition to other swampy tax expenditures like a tax break tied to rum imported from U.S. territories; and (6) adding tens of billions in new spending for NASA, the Coast Guard, farm programs, and more.
I’m curious what this community thinks of the OBBB as it stands now, having just been passed by the Senate. I see plenty of problems with it, and while I understand that we are never going to be fully satisfied, I can’t help but feel like this is unacceptable. I’d love to hear from you!
It sounds like a mess. Too many concessions to unAmerican and unconstitutional programs. The government is NOT a charity. I was concerned about this when they tried to cram everything into one big bill but I understand time constraints too.
Well, in order to pass legislation you have to have votes. In order to get votes when you have a super-slim majority you have to make concessions. If this legislation doesn’t pass in some form, the tax cuts from Trumps first term will expire, causing some economic pain. Also, until we as a country are ready to deal with our main drivers of debt which are medicare and social security, all this discretionary spending we are complaining about is barely a drop in the bucket. So if you want to deal with our debt, start talking about dealing with mandatory spending (medicare and SS). All that said, i think the Government should always do less, spend less, and make sure Americans are killing fewer babies.