What Southern California can expect from the Senate version of the ‘big beautiful’ spending bill ...Middle East

When the Senate eked out a win for President Donald Trump‘s agenda Tuesday, narrowly passing the spending bill that includes major changes to tax policy and programs such as Medicaid, the potential impact on Southern California appeared significant.

It’s those cuts to Medicaid that are among the most significant changes to the Senate’s version of the package, which passed Tuesday morning, July 1, after a marathon, overnight voting session.

The Senate approved slashing $1 trillion from Medicaid — which provides health insurance for people with limited means — through work requirements for able-bodied people and changing how much states will be reimbursed by the federal government. Those cuts are expected to hit hard in California, where it’s projected that more than 2.3 million people are at risk of losing their Medi-Cal coverage.

Both of California’s U.S. senators, Democrats Alex Padilla and Adam Schiff, sharply criticized the bill on Tuesday.

“Their votes will cause rural hospitals across the country to close,” Padilla said, referring to his Republican colleagues. “They’re decimating SNAP nutrition assistance that parents count on to feed their children. And electricity bills will go up while our energy system becomes less reliable.”

Trump, meanwhile, said the bill’s passage in the Senate was a “win” for Americans, promising they will see “permanently lower taxes, higher wages and take-home pay, secure borders, and a stronger and more powerful military.” He said Medicaid and Medicare programs are “being strengthened and protected.”

It’s not over yet, though, as the bill still needs to go back to the House, where leadership has expressed confidence that they can get the bill across the finish line before Trump’s imposed July 4 deadline.

From state and local tax deductions to changes to Medicaid, here’s a look at what Southern Californians could expect to see, should the Senate’s version stand.

Changes to Medicaid

The Senate’s slashes to Medicaid are much greater than what the House had previously imposed, and an analysis by the nonpartisan Congressional Budget Office found that 11.8 million more Americans would be uninsured by 2034.

For California, that means more than 2.36 million people are at risk of losing Medi-Cal coverage, according to an estimate from Democrats on the Senate Finance Committee.

Gov. Gavin Newsom has put that figure even higher, at 3.4 million Californians. He said the changes to Medicaid and federal rules regarding health care taxes risk up to $28 billion in federal funding for California.

He warned that the changes would result in hospital and clinic closures and curtail efforts the state has made in reducing the number of uninsured residents.

That’s left Huntington Beach mom Kim Doyle concerned, who said regular wellness and health care checkups for her daughter are crucial.

Her daughter Trinity — or “extra fancy girl,” as her mom affectionately calls her — has a dual diagnosis of autism and Down syndrome. She’s considered medically fragile, is non-verbal and cannot develop antibodies to fight regular infections.

Trinity, at age 20, sees seven different specialists through Children’s Hospital of Orange County fairly regularly. There’s the neuroligist, the gastroenterologist, the endocrinologist, all of whom she sees about twice a year.

Regular lab work and testing is cheaper because they can catch a problem more quickly and avoid further hospitalizations or prolonged illnesses, said Doyle, noting that her daughter relies on both private insurance and Medi-Cal, California’s version of Medicaid.

In all, Trinity has had nine ear surgeries because she cannot develop the antibodies to fight ear infections, Doyle said. Eight years ago, she underwent a 12-hour surgery at Children’s Hospital Los Angeles to remove a microvascular tumor in her hand, with doctors reattaching nerves and veins.

Doyle said she’s in a bit of a “wait and see” holding pattern now, as she watches what lawmakers will ultimately decide to do with this spending bill. Her full-time job is taking care of her daughter, and she is worried the proposed changes to Medicaid will mean fewer regular checkups for her daughter, or a loss of the convalescence and social services they’ve come to rely on.

“We’ve fought so hard to get these services for our kids,” Doyle said. “I’m concerned that things will be cut, and she won’t get the same quality of care.”

The White House, meanwhile, has pushed back on assertions that people will be “kicked off” of Medicaid, instead insisting that it will protect the most vulnerable patients while “eliminating waste, fraud and abuse.”

The bill still needs to go back to the House, where leadership has expressed confidence that they can get the bill across the finish line before Trump’s imposed July 4 deadline.

Rep. Young Kim, who represents communities in Orange, Riverside and San Bernardino counties, is one of a handful of House Republicans who have unequivocally said that they wouldn’t support a bill that includes large cuts to Medicaid. They have said they would support certain reforms, but could not back cuts to coverage for vulnerable populations or those that would threaten hospitals, nursing homes and safety net providers.

A spokesperson for Kim said they were still reviewing the changes the Senate made when reached for comment Tuesday.

The spending bill also includes a provision blocking Planned Parenthood and other similar organizations from receiving Medicaid payments for one year — part of a long-term effort by Republicans to cut federal funding from going to abortion providers.

Last year, Planned Parenthood of Orange and San Bernardino Counties provided nearly 270,000 medical visits at nine health centers across those two counties, said Sarah Flocken, a spokesperson for the organization.

Abortions, she said, only account for “a very small but important part of the services” provided, which also include cancer screenings, breast exams and birth control.

It’s still unclear what the loss of federal funding will mean for any future services PPOSBC provides to the region, said Krista Hollinger, its president and CEO.

“We are looking into multiple options to help mitigate any potential federal funding loss so that we can continue to serve the patients who rely on us for needed medical care,” Hollinger said. “Thousands of patients depend on us for high-quality, compassionate care, and we remain steadfast in our commitment to keeping our doors open to them, no matter the challenges we face.”

AI moratorium

Senators also axed a ban on states and local governments from regulating artificial intelligence for a decade — a provision that the House had added into its earlier version, surprising some members.

California is among multiple states that have enacted AI-related regulations. The governor last year OK’d a transparency and disclosure bill that requires large AI companies to clearly mark what content was generated by AI or provide consumers with a detection tool.

Attorney General Rob Bonta had urged the Senate to strip the effort that would ban states’ ability to enforce their own regulations.

“States are often on the front lines of developing strong privacy and technology protections for their residents,” Bonta said last month.

State and local tax deductions

Senators left in an increase to the cap on how much of a deduction taxpayers can claim to offset high state and local tax obligations — for the next five years.

Raising the cap on these deductions, called SALT, was one of the trickier negotiations among House Republicans, particularly for those who represent communities in the high-tax states of California, New Jersey and New York. The Senate left in the House’s proposal to allow taxpayers to deduct up to $40,000 per year from the federal taxes, phasing it out if their income hits $500,000.

But the Senate’s version, after five years, reverts the cap back to $10,000 — the limit placed in 2017 as part of the Tax Cuts and Jobs Act spearheaded by the first Trump administration.

Tips and overtime pay

Included in the package is a provision that allows workers to deduct overtime pay and tips from taxable income.

The deduction for overtime pay is capped at $12,500 for an individual filer and decreases for those who make more than $150,000 a year. The deduction for tips is capped at $25,000 and also decreases for individuals who make more than $150,000 a year.

Both tax cuts are only in place for tax years 2025-2028; in other words, they last throughout the rest of Trump’s term.

The U.S. Senate has already passed a bill that would enact similar deductions on tips.

There was also a similar effort in the California Statehouse this year, led by Republican Sen. Rosilicie Ochoa Bogh, who represents communities in San Bernardino and Riverside counties.

Environmental tax credits

Senate Republicans voted to strip billions in green energy tax credits, essentially dismantling a 2022 Biden-era climate law and ending incentives for clean energy more quickly than previous drafts of the spending bill had suggested.

Schiff warned these changes will “destroy the future of renewable energy and raise energy bills by hundreds of dollars every year.”

The Associated Press contributed to this report.

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