Senate Republicans have unveiled an updated version of their ambitious domestic policy bill, incorporating significant compromises on Medicaid and taxation to address concerns from moderates within the party. As they strive to secure enough votes for a successful vote slated for Saturday, these adjustments signal a strategic pivot aimed at unifying divergent factions within the GOP.

In a move to appease moderates worried about the impact of Medicaid cuts, the bill now proposes a substantial increase in funding for rural hospitals, setting aside a $25 billion stabilization fund over five years—a notable increase from the initially proposed $15 billion. This fund is part of a broader effort to mitigate the effects of proposed reductions to the health program that had previously caused unease among some Republican senators.

Additionally, the revised bill delays planned cuts to provider taxes, which are crucial for funding state obligations under Medicaid. The allowable provider tax in states that have expanded Medicaid will be gradually reduced from 6 percent to 3.5 percent, but the onset of these reductions has been pushed to 2028, a year later than initially planned. This delay is a concession to senators like Thom Tillis (R-N.C.), who have expressed concerns about the potential political fallout from these cuts in upcoming elections.

Tax policy is also under negotiation, with changes aimed at accommodating Republicans from states with high local taxes, such as New York, New Jersey, and California. After extensive talks involving Senator Markwayne Mullin (R-Okla.) and Treasury Secretary Scott Bessent, the bill proposes to increase the state and local tax (SALT) deduction limit from $10,000 to $40,000, although this would revert to the current limit after 2029. This adjustment could reduce the cost of the House's plan by at least $100 billion, down from an estimated $350 billion.

Despite these concessions, it remains uncertain whether these changes will win over all concerned legislators. House Speaker Mike Johnson revealed in a recent meeting that there was still at least one holdout on the revised SALT provisions, hinting at ongoing resistance within the party.

The legislative text is still subject to further modifications, pending a review by the parliamentarian, Elizabeth MacDonough, to ensure compliance with stringent budgetary regulations. The outcome of these reviews, particularly concerning the innovative "current policy baseline" accounting method used to justify making extensive tax cuts permanent, will be crucial in determining the final shape of the bill.

As the deadline approaches, Senate Republicans are under intense pressure to finalize the bill, aiming to present it to President Donald Trump by July 4. The coming days will be critical as they work to align the various interests within the party and navigate the complex legislative landscape.

*David Lim contributed to this report.*