Reconciliation Showdown: Senate Narrowly Passes Megabill Ahead of July 4

On July 1, the Senate narrowly passed the reconciliation bill, 51-50, just ahead of the July 4 deadline—marking the longest vote-a-rama in Senate history. The revised bill now returns to the House, which is scheduled to vote on July 3. Both chambers must pass identical versions of the megabill before it proceeds to the President’s desk.

GFOA is closely tracking the tax package and its impact on members. Importantly, both bills fully preserve the tax exempt status of Municipal Bonds. The Senate version expands tax exempt financing to spaceports, potentially involving more state and local governments.  Both also add work requirements and qualification factors to the provision of Medicaid. Finally, the Senate package also includes rollbacks to wind and solar credits established under the Inflation Reduction Act, aligning with similar provisions in the House bill.  

The bills differ on a few key aspects of timing. For example, where the House bill raises the State and Local Tax (SALT) deduction cap to $40,000 for joint filers, the Senate version adopts the same increase but allows it to expire after 2030.

For a detailed comparison of both versions and the latest updates, visit GFOA’s Federal Tax Reform webpage.