Trump jumps into a GOP tax cuts conundrum

Politico

a day ago

Presented by
IN TODAY'S EDITION:— Thune and Crapo head to the White House— Mods to watch in today's rescissions vote— Lawmakers blast ICE's 'egregious' spending
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 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, our Rachael Bade reports in her latest Corridors column.
'We're not willing to entertain any scaling back of our signature promises,' a Trump administration official told Rachael.
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 Mia 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 Rachael.
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. 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.
GOOD THURSDAY MORNING. Happy Seersucker Day to all who celebrate. Sens. Bill Cassidy and Raphael Warnock are staging this year's commemorative photograph at 12:30 p.m. at the Ohio Clock.
And a special shoutout to our Ben Leonard, who had his last day with our team yesterday and is headed off to law school this fall. We'll miss our policy guru extraordinaire for his Medicaid insights, famous snickerdoodle cookies and passion for baseball. He would've packed this newsletter with stats from last night's charity Congressional Baseball Game (Republicans beat Democrats for the fifth straight year, winning 13-2).
We also would like to welcome another Benjamin to the team: Benjamin Guggenheim, who was previously on our tax team and will now step into Ben's policy guru shoes. Email him at [e-mail], and reach the rest of your Inside Congress scribes at [e-mail], [e-mail] and [e-mail]. Follow our live coverage at the Inside Congress blog at politico.com/congress.
THE SKED
The House is in session and voting on the rescissions package and legislation tackling fentanyl at 3:45 p.m.
— Appropriations will mark up the fiscal 2026 Defense and Homeland Security appropriations bills at 9 a.m.
— Armed Services will have a hearing on the president's fiscal 2026 budget request for the Defense Department with Secretary Pete Hegseth and Joint Chiefs of Staff Chair Gen. Dan Caine testifying at 10 a.m.
— Energy and Commerce will have a subcommittee hearing on name, image and likeness for college athletes at 10 a.m.
— Homeland Security will have a subcommittee hearing on artificial intelligence and cybersecurity at 10 a.m.
— Natural Resources will have a hearing on the president's fiscal 2026 budget request for the Interior Department with Secretary Doug Burgum testifying at 10 a.m.
— Oversight will have a hearing on sanctuary cities with Govs. Tim Walz of Minnesota, JB Pritzker of Illinois and Kathy Hochul of New York testifying at 10 a.m.
— Financial Services will have a subcommittee hearing on the Defense Production Act at 10 a.m.
— Minority Leader Hakeem Jeffries will have his weekly news conference at 11:30 a.m.
The Senate is in session and voting on Billy Long's nomination to lead the IRS and taking a series of procedural votes to tee up final passage of cryptocurrency legislation at 12:30 p.m.
— Judiciary will consider a bill to hold tech platforms accountable for online child sexual exploitation. The panel will also vote on various nominations, including Joseph Edlow to be director of U.S. Citizenship and Immigration Services and Stanley Woodward Jr. and Thomas Gaiser to be associate and assistant attorneys general at 9:30 a.m.
— Banking will have a hearing on the nominations of Benjamin DeMarzo and Craig Trainor to be assistant secretaries at HUD, Jovan Jovanovic to be president of the Export-Import Bank, Francis Brooke to be an assistant secretary at Treasury and David Peters to be an assistant secretary at Commerce at 10 a.m.
— Finance will have a hearing on the president's fiscal 2026 budget request for the Treasury Department with testimony from Secretary Scott Bessent at 10 a.m.
— Foreign Relations will have a hearing on various nominations including Luigi Rinaldi to serve as ambassador to Uruguay and Arthur Fisher to be ambassador to Austria at 10:30 a.m.
The rest of the week: The House and Senate aren't voting on Friday.
THE LEADERSHIP SUITE
Johnson's rescissions vote hangs on moderates
Johnson is pushing ahead with a vote today on a package to rescind $9.4 billion in funds Congress already approved for global aid and public broadcasting.
Who we're watching: Several moderates have voiced concerns to leadership, including Reps. Nicole Malliotakis, Don Bacon and David Valadao. But no one has confirmed they plan to vote against it.
Others we're keeping an eye on: Rep. Dan Newhouse told Calen this week he was worried about the precedent it would set. Rep. Mark Amodei had issues with cutting funding for public broadcasting. Rep. Rob Bresnahan has privately raised concerns about the package, too.
House Republicans can only afford three defections with full attendance and if all Democrats oppose the package as expected.
'I don't know. I honestly don't,' Valadao said, when asked if he thinks the rescissions package will pass. Asked how he'll vote, he said, 'I haven't decided yet.'
The thorn in Senate GOP leaders' side
Senate GOP leaders are attempting to break a standoff with Sen. Rand Paul over border security provisions by having Budget Chair Lindsey Graham release his own text for Senate Homeland Security's portion of the megabill that 'more closely mirrors' the House-passed — and White House-endorsed — version, our Jordain Carney, Hailey Fuchs and Lisa report.
Paul, who chairs the Homeland panel, insisted to reporters after leaving Wednesday's conference meeting that fellow Republicans share his skepticism over directing $46.5 billion for building the border wall, as the House did. But Graham said the more conservative numbers Paul is proposing 'are just not realistic.'
BTW: Paul is accusing the White House of uninviting him and his family from the White House congressional picnic over his opposition to elements of Trump's agenda.
Thune closes in on a crypto win
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, our Jasper Goodman reports. Senators are on track to adopt new base text for the stablecoin regulatory framework and begin voting on the underlying measure later this week. It looks increasingly unlikely Thune will allow further votes on amendments, after attempts to strike a deal with Democrats faltered amid a push from Sen. Roger Marshall to force a vote on credit card swipe fees.
If no amendment deal or time agreement comes together, the Senate will vote on Tuesday on final passage of the bill.
POLICY RUNDOWN
HEGSETH IN THE HOT SEAT — Republican senators pressed the Defense secretary Wednesday on the Trump administration's approach to ending the Ukraine war by appeasing Russia, our Connor O'Brien and Joe Gould report.
Former Senate Majority Leader Mitch McConnell issued especially strong warnings against a restraint-oriented approach to dealing with Russia, telling Hegseth, 'We don't want a headline at the end of this conflict that says Russia wins and America loses.'
When Hegseth told Graham, a top Trump ally and staunch defense hawk, that 'it remains to be seen' whether Vladimir Putin would stop his expansion efforts in Ukraine, Graham shot back: 'Well, he says he's not … It doesn't remain to be seen.'
The exchanges signaled the widening foreign policy gap in the Republican Party. Hegseth acknowledged Russia as the aggressor in the war, but ultimately defended the administration's approach.
GOP NEARS DEAL ON GREEN CREDIT MONETIZATION — Senate Republicans are close to an agreement to give businesses more time to sell certain clean-energy tax credits — a practice known as transferability — as part their chamber's version of the Trump megabill, our Josh Siegel, James Bikales and Kelsey Tamborrino report.
The House-passed package included provisions that would significantly restrict that practice facilitated by the Biden-era climate law, which is driving investments in red districts and states. But Senate Republicans emerged from their Wednesday confab saying they're looking to ease up on those harsh rollbacks by extending phaseout timelines.
'If you are going to have a credit, if it's not transferable, it's not of much use,' said Sen. Kevin Cramer.
SENATE SCALES BACK SNAP CUTS — Senate Agriculture Republicans Wednesday evening unveiled a new plan to slash the Supplemental Nutrition Assistance Program, our Grace Yarrow reports. 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.
The new proposal calls for $211 billion in cuts to the federal food aid program — more than $80 billion less than the House's proposed cuts — and would allow some states to avoid footing the bill for SNAP if they get their payment error rates below 6 percent by fiscal 2028.
Lawmakers plan to use some of the savings to pay for nearly $70 billion worth of programs in the stalled farm bill instead. After paying for that, the new SNAP proposal would net about $144 billion in savings, per a committee estimate.
LAWMAKERS CONCERNED OVER ICE SPENDING — House Republican appropriators are concerned that ICE is spending more money than Congress has approved, according to complaints laid out in the report they released Wednesday to accompany their fiscal 2026 Homeland Security funding bill.
Our Jennifer Scholtes writes that among the slew of concerns contained in the 168-page report is that 'ICE began spending more than its appropriated level shortly after the fiscal year commenced and operations now far exceed available resources.'
The accusations of 'egregious' overspending follow recent warnings from House Republicans that the agency must not proceed as though the megabill, which is set to deliver billions of dollars in extra funding for immigration enforcement and deportation initiatives, is guaranteed to pass.
Best of POLITICO Pro and E&E:
CAMPAIGN STOP
FIRST IN INSIDE CONGRESS: HELLCATS TO CONGRESS — Democrats are seeing a new model for success in 2026 in a group of aspiring congresswomen with military backgrounds after Rep. Mikie Sherrill won the Democratic nomination for New Jersey governor Tuesday, our Liz Crampton and Elena Schneider report. Known as the 'Hellcats,' these Democratic candidates point to their political aspirations as an extension of their public service that began in the military or national security world — and could be key to countering Republican claims of MAGA equaling patriotism.
DEMS' HOGG DILEMMA ISN'T OVER — DNC Vice Chair David Hogg is stepping aside from his party post and turning his focus to Leaders We Deserve, the group he co-founded that has pledged to spend $20 million boosting younger challengers against incumbents in safe-blue Democratic primaries. Hogg told Elena his group won't wade into battleground districts because 'I want us to win the majority,' nor will it target members solely based on their age.
TUNNEL TALK
GET IT BEFORE IT'S GONE — The Senate candy desk got a restock Wednesday. Mullin oversees the selection and the latest offerings include Sour Patch Kids, Nerds, Hershey's Cookies 'n' Creme bars and an assortment of Orbitz gum for lawmakers looking for their sugar fix.
SPOTTED ON THE HILL — Russ Vought being screened by Capitol Police officers, who appeared not to recognize the White House budget chief as he attempted to enter the Capitol Wednesday evening.
THE BEST OF THE REST
On their way to BYU, teens first help run the Senate, from Cami Mondeaux at Deseret News
Photo finish: Team Thune takes first place after fitness challenge 'recount', from David Sivak at The Washington Examiner
Rep. Buddy Carter Tops Georgia GOP Senate Field in New Poll, from Reese Gorman at NOTUS
CAPITOL HILL INFLUENCE
Allison Jarus has left the Hill after 12 years to join Arnold & Porter as a policy adviser. Jarus spent the past decade working for Rep. Mike Quigley, most recently as his chief of staff. Jarus helped handle Quigley's work on the House Appropriations Committee and was a key architect of the 2021 legislation to increase access for experimental treatments for ALS patients. She was previously with Rep. Marcy Kaptur and former Rep. Tim Ryan.
JOB BOARD
House Transportation Committee Staff Director Jack Ruddy is leaving Capitol Hill after 15 years. Ruddy, a trusted adviser and friend of Chair Sam Graves, started as an intern for the Missouri Republican back in 2006 and began working in his office full-time in 2011. He helped shepherd the 2024 FAA law and T&I's portion of the GOP's pending reconciliation package.
Nick Christensen, a longtime Graves aide and his current chief of staff, will take the reins as staff director on Monday.
HAPPY BIRTHDAY
Rep. Mark Amodei … former Rep. Lucille Roybal-Allard … NBC's (soon to be POLITICO's) Carrie Budoff Brown … Mayra Macías … Rabbi Levi Shemtov … Lilia Dashevsky … Michael Finnegan … Joyce Kazadi ... Eli Zupnick ... FICO's Dan Archer … Matt Wolking … former Energy Secretary Spencer Abraham … Matt Mowers … Coco Pannell Smith … Morgan Viña of National Security of America and Invariant … Abigail Ross Hopper of the Solar Energy Industries Association
TRIVIA
WEDNESDAY'S ANSWER: Bruce Brown correctly answered that James Garfield had the second-shortest tenure as president.
TODAY'S QUESTION, from our Katherine Tully-McManus: What well-known fiscal hawk hit a home run out of the park in the 1979 Congressional Baseball Game?
The first person to correctly guess gets a mention in the next edition of Inside Congress. Send your answers to [e-mail].