Senate Nears Final Vote on Reconciliation Package

Although lawmakers were set to begin a week-long recess, Senate Majority Leader John Thune (R-SD) kept the upper chamber in session through the weekend as Republicans work to advance President Trump’s One Big Beautiful Bill (H.R. 1) before a self-imposed July 4 deadline.

Earlier today, the upper chamber kicked off the lengthy amendment process known as a “vote-a-rama,” which allows members of both parties to offer changes to the bill. While few, if any, of the amendments are expected to gain enough support to meaningfully alter the legislation, Democrats are using the opportunity to introduce a series of messaging amendments, while Republicans seek to refine key provisions. Among the amendments to watch is one from Senator Rick Scott (R-FL), which would phase out the 90% federal match for new Medicaid expansion enrollees beginning in 2031. While it’s unclear whether the amendment will garner the necessary 50 votes, it has the backing of Majority Leader Thune.

The floor action follows a narrow procedural vote last Friday to begin formal debate on the reconciliation package. It should be noted that Senator Thom Tillis (R-NC) opposed the motion, citing the Senate bill’s deeper Medicaid cuts relative to the House version. Shortly after his vote, Tillis announced that he would not seek reelection in 2026. Senators Rand Paul (R-KY) and Ron Johnson (R-WI) also initially opposed the motion, citing the measure’s significant impact on the deficit, though Johnson ultimately reversed his position to allow debate to proceed.

Senator Lisa Murkowski (R-AK), whose support has been uncertain, negotiated state-specific provisions to exempt non-contiguous states from certain SNAP reductions and to increase Alaska’s federal Medicaid match rate. However, the Senate Parliamentarian has since ruled against the Medicaid carve-out, and a decision on the SNAP exemption is still pending, leaving Murkowski’s final vote in doubt.

The Senate package includes several key changes from the House-passed version:

• Medicaid: More than $1 trillion in cuts over ten years, including a lower cap on the provider tax and new eligibility restrictions.
• SNAP: Roughly $186 billion in reductions, which rely heavily on cost shifts to states to pay for a portion of the benefits and an increased administrative share.
• Renewable energy: Repeal of clean energy tax credits and new excise taxes on certain energy sectors.
• State and Local Tax (SALT) Deduction: A compromise provision raising the deduction cap from $10,000 to $40,000 for five years, rather than 10 years.
• Debt ceiling: A $5 trillion increase (compared to $4 trillion in the House bill).
• Scoring rules: The bill uses a budgetary loophole to exclude the cost of the tax provisions, which the Congressional Budget Office estimates would add $3.8 trillion to the deficit over a decade.

Looking ahead, Senate Republicans are expected to remain largely unified after votes on amendments have concluded, meaning the measure could advance as soon as tonight or early Tuesday morning. before heading to the House for final passage. While some House Republicans have raised concerns about changes to H.R. 1, the White House is applying significant pressure to ensure the package reaches the President’s desk before the July 4 deadline. A final House vote could take place as early as Wednesday, depending on whether Speaker Johnson can rally the votes.

Moratorium on AI Regulation

Later today, senators are expected to vote on an amendment that would modify a controversial proposal designed to bar states and local governments from regulating artificial intelligence (AI). While the House-passed version of the budget reconciliation bill (H.R. 1) includes a sweeping 10-year moratorium on all state regulation of AI, the current Senate measure would prevent states from receiving federal broadband funding if they enforce their own AI laws.

Pursuant to the amendment – which was announced over the weekend by Senators Ted Cruz (R-TX) and Marsha Blackburn (R-TN) – states would be unable to enforce laws or regulations pertaining to AI models and systems for a period of five years if they want to access their share of a new $500 million pot of broadband infrastructure funding. Moreover, the amendment would require states to certify compliance with the AI moratorium in order to spend down their allotment of federal BEAD program funds, including already-allocated funds awaiting distribution to subgrantees. According to Senate Commerce Committee Democrats, the provision would create a "compliance trap," which could freeze all broadband projects if a state moves to enforce its own AI policies. Committee Democrats also have indicated that the language would provide the National Telecommunications and Information Administration (NTIA) with new power to claw back all BEAD program funds from states that are deemed to be out of compliance with the AI moratorium. 

It should be noted that the five-year compromise language includes specific exemptions for laws or policies that address children's online safety, deceptive practices, and publicity rights. In spite of the modifications, the provision faces opposition from several GOP senators and House members and is strongly opposed by congressional Democrats. Accordingly, as of this writing, the fate of the AI regulation moratorium remains unclear.

Public Lands Sale Provision Dropped from Reconciliation Package

A controversial public lands proposal championed by Senate Energy and Natural Resources Committee Chairman Mike Lee (R-UT) has been removed from the Senate’s reconciliation package following a ruling from the Senate Parliamentarian and bipartisan opposition.

Initially, the measure would have required the Bureau of Land Management (BLM) and U.S. Forest Service (USFS) to dispose of 0.5% to 0.75% of their respective land holdings across 11 western states. While the stated aim was to expand the housing supply, the sweeping nature of the mandate raised concerns across party lines, particularly around federal overreach, conflicts with local land use plans, and risks to environmentally sensitive areas.

In response to that pushback, Senator Lee floated a narrower alternative focused solely on BLM parcels located within five miles of established population centers. However, the revised version failed to gain any traction.

As a result, the language has been formally dropped from the package. While the provision will not move forward as part of reconciliation, Senator Lee and other supporters are expected to revisit the issue in standalone legislation or future housing-related efforts.

Contact the Paragon Team:

Joe Krahn: jk@paragonlobbying.com

Tom Joseph: tj@paragonlobbying.com

Hasan Sarsour: hs@paragonlobbying.com

Rachel Mackey: rm@paragonlobbying.com

Ryan Waterman Aldana: rwa@paragonlobbying.com