President Donald Trump is bullish about wanting a “big, beautiful bill” on his desk in just three weeks. But to meet that goal, he’ll have to help settle a tricky tax fight.
Trump will huddle with Senate Majority Leader John Thune and Finance Chair Mike Crapo (R-Idaho) at the White House this afternoon — the day before Senate Republican leaders want Crapo to release the bill text for the tax policy portion of the megabill. A likely discussion topic: Crapo’s pledge in a GOP conference meeting Wednesday to make three business tax cuts permanent.
The challenge isn’t about rounding up GOP support for larger tax deductions for research and development, debt interest and capital expensing. It’s how to pay for them all. The House-passed package already extends the three deductions through 2029, but making them fully permanent would cost an additional $450 billion.
At the same time, House fiscal hawks are demanding that any additional tax cuts be offset with dollar-for-dollar spending cuts. To achieve that, Senate Republicans will likely suggest watering down Trump’s campaign pledges to eliminate taxes on tips and overtime pay.
But the White House is making clear behind the scenes that would be a no-go.
“We’re not willing to entertain any scaling back of our signature promises,” a Trump administration official told POLITICO.
GOP senators are eyeing another potential savings avenue: Lowering the state-and-local-tax deduction cap that the House had quadrupled to $40,000 as part of a crucial compromise with blue-state Republicans. Those SALT Republicans are now threatening to torpedo the bill if that’s changed — and House GOP leaders appear to be taking them seriously.
“Obviously, it was very heavily negotiated in the House and we don’t want to see it lower,” House Majority Leader Steve Scalise told POLITICO Wednesday.
There’s another reason Trump has every incentive to urge Thune and Crapo not to meddle with the House’s hard-fought tax provisions: He doesn’t want to slow down the process with any more “ping-pong[ing]” of the legislation between the two chambers, the administration official told POLITICO.
As the White House works to convince the Senate Republicans to lay off the revisions, Senate leaders are working toward issuing final bill text on June 23, followed by a vote-a-rama the back half of that week, according to Sen. Markwayne Mullin (R-Okla). That would go a long way in allowing the House to meet the GOP’s self-imposed July Fourth deadline.
Thune is quietly threatening to keep senators in town into that recess week to make it happen. But some GOP senators are openly questioning whether they can wrap their version of the tax-and-spending package by that date, let alone pass the whole thing.
If the Senate is able to adhere to its own timeline, it’ll come down to whether Speaker Mike Johnson can get his members to swallow the Senate’s changes — and there’s no guarantee how quickly that will happen.
What else we’re watching:
— Rescissions gets a floor vote: Johnson is pushing ahead with a vote Thursday on a package to rescind $9.4 billion in funds Congress already approved for global aid and public broadcasting. House Republicans can only afford three defections if they have full attendance and all Democrats oppose as expected.
— Crypto bill teed up: The Senate majority leader is one step closer to passing one of Trump’s biggest priorities outside of the megabill after landmark cryptocurrency legislation cleared another procedural hurdle in a bipartisan vote Wednesday. Senators are on track to adopt new base text for the stablecoin regulatory framework and begin voting on the underlying measure bill later this week.
— A new SNAP proposal: Senate Agriculture Republicans Wednesday evening unveiled a new plan to slash the Supplemental Nutrition Assistance Program. But it’s far less aggressive than what was included in the House-approved megabill, making it potentially more palatable for at-risk and moderate Republicans.
Rachael Bade, Jasper Goodman and Grace Yarrow contributed to this report.
