As the Fourth of July deadline looms, lawmakers are scrambling to finalize a sweeping tax and spending bill that could have major implications for the federal budget, healthcare programs, energy policy, and individual tax rates. On Chicago’s Morning Answer, guest host Chris Krok spoke with Phil Kerpen, president of American Commitment and a leading voice at the Committee to Unleash Prosperity, to break down what’s really inside the legislation.
The Senate has already passed the bill, which spans nearly 900 pages, and it now awaits approval from the narrowly divided House. Kerpen emphasized the bill’s central function: blocking an automatic $4 trillion tax hike set to take effect on January 1 if Congress fails to act. According to Kerpen, every Democrat has opposed the bill so far and offered no alternative, effectively endorsing the looming tax increase.
Beyond taxes, the legislation contains a number of key provisions with varying levels of bipartisan support and controversy. One of the bill’s most significant features is an expansion of school choice and Health Savings Accounts. However, Kerpen noted that the universal school choice originally included by the House was watered down in the Senate version, making state-level opt-ins necessary—a likely nonstarter in places like Illinois.
The bill also reignites the debate over green energy subsidies. A last-minute Senate amendment expanded eligibility for wind and solar tax credits by redefining what counts as a project “under construction.” According to Kerpen, the loophole is so broad that it could effectively nullify efforts to sunset those subsidies by 2027. Conservatives in the House are now weighing whether to reject the current version and push for a tighter definition or accept the compromise to avoid derailing the entire package.
Healthcare, especially Medicaid, is another flashpoint. The bill introduces new six-month eligibility checks and attempts to rein in states like New York and California that have used legal loopholes to increase their federal Medicaid draws. Under President Biden, Medicaid spending has surged 50%, with some states boosting their share by over 20% in a single year. Kerpen praised the Senate for phasing out money-laundering schemes that allow states to redirect federal funds toward expanded services for undocumented immigrants or to artificially inflate hospital reimbursements.
A particularly notable provision caps Medicaid hospital payments at the Medicare rate, aimed at stopping states from overpaying providers to boost federal matches. Critics have warned of cuts to rural hospitals, prompting the inclusion of a $50 billion bailout fund for those facilities.
Kerpen also addressed criticism from outlets like The Wall Street Journal, which challenged the Congressional Budget Office’s projections of increased deficits. He argued that the CBO’s baseline assumes massive tax hikes will take place automatically—an unrealistic assumption. In contrast, Kerpen believes the bill will reduce deficits, especially if paired with pro-growth policies like deregulation and business-friendly tax reforms.
While the bill includes special-interest carveouts—like a bizarre $50,000 tax exemption for Alaskan whaling boat captains—Kerpen says those were likely the price of securing votes from key senators. Whether the House can live with those concessions or chooses to renegotiate remains uncertain.
With a razor-thin Republican majority in the House, the bill’s future is hanging by a thread. Leaders are trying to balance conservative demands for fiscal discipline with moderates’ desire to deliver tangible wins ahead of the election season. A final vote could come within days, potentially clearing the way for a July 4th signing ceremony.
For now, the bill represents a rare legislative moment where sweeping tax policy, healthcare reform, and energy subsidies collide—and the outcome could reshape American fiscal policy for years to come.