Blows to balancing Donald Trump's 'big beautiful bill'

Perth Now

6 hours ago

Congressional Republicans have removed the so-called revenge tax provision from President Donald Trump's big bill after a request by Treasury Secretary Scott Bessent.
The Section 899 provision that was nixed would have allowed the federal government to impose taxes on companies with foreign owners, as well as investors from countries judged as charging "unfair foreign taxes" on US companies.
The measure was expected to lead many companies to avoid investing in the US out of concern that they could face steep taxes. But the removal of the provision adds a wrinkle to Republicans' plans to try to offset the cost of the massive package.
Bessent said in an X post that he made the request to lawmakers after reaching an agreement with other countries on the OECD Global Tax Deal. He said that after "months of productive dialogue," they would "announce a joint understanding among G7 countries that defends American interests."
Senate Finance Committee Chairman Mike Crapo, and House Ways and Means Committee Chairman Jason Smith, said they would remove the provision. But, they noted, "Congressional Republicans stand ready to take immediate action if the other parties walk away from this deal or slow walk its implementation."
The removal of the provision will provide "greater certainty and stability for the global economy and will enhance growth and investment in the United States and beyond," Bessent said in his post.
An analysis by the Global Business Alliance, a trade group representing international companies such as Toyota and Nestlé, estimated that the provision would have cost the US 360,000 jobs and $55 billion annually over 10 years in lost gross domestic product.
Republicans are rushing to finish the package this week to meet the president's Fourth of July deadline for passage.
Earlier ,the Senate parliamentarian advised that a Medicaid provider tax overhaul central to the spending bill does not adhere to the chamber's procedural rules.
Guidance from the non-partisan Senate parliamentarian Elizabeth MacDonough is rarely ignored.
Republicans were counting on big cuts to Medicaid and other programs to offset trillions of dollars in Trump tax breaks, their top priority. Additionally, the parliamentarian advised against various GOP provisions barring certain immigrants from health care programs.
Republicans scrambled Thursday to respond, with some calling for challenging, or ever firing, the parliamentarian, who has been on the job since 2012, though GOP leaders dismissed those views. Instead, they worked to revise the various proposals.
"We have contingency plans," said Majority Leader John Thune.
Friday's expected votes appeared to be slipping, but Thune insisted that "we're ploughing forward."
Democrats, who are unified against the package as a tax giveaway for the wealthy at the expense of American safety net programs, said the procedural decisions would devastate the GOP package.
Trump hosted House Speaker Mike Johnson and other GOP lawmakers at the White House joined by truck drivers, firefighters, tipped workers, ranchers and others that the administration says will benefit from the bill.
"We don't want to have grandstanders," Trump said of the GOP holdouts.
At its core, the big bill, which has passed the House and is now being revised in the Senate, includes $3.8 trillion in tax breaks that had been approved during Trump's first term, but will expire in December imposing a tax hike if Congress fails to act.
Senior Republicans said they would try to revise the provision to make it acceptable, perhaps by extending the start date of any changes.