Senate Republicans cool to Finance Committee's tax plan

Politico

5 hours ago

Senate GOP leaders are facing early pushback over a key plank of their 'big, beautiful bill' just hours after rolling it out, underscoring the work that remains to bring the legislation to the floor next week.
Signs of discontent within the Republican Conference came as Senate Finance Chair Mike Crapo privately briefed his colleagues Monday night on his portion of the megabill central to enacting key elements of President Donald Trump's domestic agenda. Crapo's committee is responsible for some of the most politically consequential components of the party-line package, including changes to Medicaid, the fate of clean-energy energy tax credits and the state-and-local tax deduction that is important to high-tax state House Republicans.
The briefing Monday was designed to explain the panel's rationale, answer questions and alleviate any anxieties. But immediate reaction from lawmakers across the ideological spectrum upon that meeting's conclusion indicated leadership has a ways to go — especially as Republicans still hope to meet their self-imposed July Fourth deadline for clearing the larger bill for Trump's signature.
'We're not doing anything to significantly alter the course of the financial future of this country,' Sen. Ron Johnson (R-Wis.) told reporters Monday evening, adding that the current Senate Finance proposal 'does not meet the moment' and that he would vote no if it came to the floor as is.
Sen. Josh Hawley (R-Mo.), who has drawn public red lines over any overhauls to Medicaid resulting in potential losses in benefits, described himself as 'alarmed' by the committee's new plan, which would go further than the House bill on making changes to the health care safety net program.
'This needs a lot of work. It's really concerning and I'm really surprised by it. … I'd be really interested to see what the president thinks of it,' said Hawley, who has previously said that Trump personally told him the bill should not cut Medicaid benefits.
Senate Republicans agreed to nothing in the Monday night meeting, according to attendees, with Senate Majority Leader John Thune and Crapo both emphasizing that Republicans were engaged in an ongoing negotiation — both among themselves and with their House counterparts, who passed their version of the megabill last month. Thune afterward summed up his message to the conference as: 'We gotta get this done.'
Sen. John Hoeven (R-N.D.), in describing Crapo and Thune's messaging at the briefing, said, 'They're really patient. They are listening to everyone's ideas. And they're still working on it — it's still a work in progress.'
Crapo's bill would, among other things, scale back some of Trump's campaign promises on creating new tax breaks for tips and overtime. He is also seeking to soften the House-passed bill's endowment tax hike and include a smaller increase on the Child Tax Credit.
Senators also pitched Crapo and Thune at the Monday meeting on their own ideas about what they still want to see in the bill. Sen. James Lankford (R-Okla.), a member of leadership, said the meeting 'wasn't hostile' but lawmakers told Crapo and Thune, 'I've got questions.''
Lankford added, 'Some people were like, 'I want to go even more.' … But somebody else would step up and say, 'that's already farther than I want to be able to go.''
Thune wants to put the bill on the floor next week, when he can only lose three GOP senators and still ensure the measure's passage. Sen. Rand Paul (R-Ky.) is widely expected to vote 'no.' And based on the early reaction to both the tax portion of the megabill, Thune still has work to do to shore up his whip count elsewhere, too.
Sen. Rick Scott (R-Fla.), who shares Johnson's concerns about spending too much and not reducing the deficit enough, said he also doesn't believe the emerging Senate megabill framework goes far enough on Medicaid.
Scott suggested that lawmakers should reconsider attaching a provision to the bill that would scale back the 90 percent of Medicaid expansion costs covered by the federal government.
This policy change would yield major savings to offset the legislation's heavy price tag, but was deemed too politically toxic to follow through on in the House.
'The only way this is going to get fixed is — we've got to say the 90-10 match doesn't make any sense,' Scott said after the closed-door meeting.
Elsewhere in the conference, Hawley and other Senate Republicans are squeamish about the Senate Finance plan to draw down the provider tax and how that would impact funding for rural hospitals. Many states use this tax to help fund their Medicaid programs.
Sen. Susan Collins of Maine largely declined to comment as she left the meeting, but asked if she still had concerns about the provider tax, she said: 'Yes, I do.' And while she credited leadership with consulting closely with her as they drafted the Finance draft text, conceded they didn't heed her on every demand: 'Sometimes yes, sometimes no.'
The Senate Finance Committee text released Monday also would soften the House version's phaseout of Biden-era clean-energy tax credits, where members of the House Freedom Caucus won eleventh-hour concessions from leadership to pursue more aggressive rollbacks of the green incentives.
The Senate panel's proposed language would constitute its own concession to some purple-state and moderate Republicans who have warned that the House bill would undercut businesses that have already made investments based on certainty around the climate law subsidies. But GOP leadership's attempts to find a middle ground sparked public pushback from Sen. Mike Lee, with the Utah Republican writing on X, 'Extending these subsidies beyond the Trump administration effectively makes them permanent Who else did *not* vote for that?'
Complicating matters: It's not just Senate Republicans who are crying foul over details of the Senate Finance proposal. House Republicans are warning, too, that the committee's initial draft text that put the SALT dedication cap at $10,000 is a nonstarter in their chamber, where Speaker Mike Johnson cut a deal to raise it to $40,000.
Republicans tried to mollify their House counterparts Monday by noting that their initial offer was just a stand-in as they continue discussing a different cap all sides could live with. Sen. Markwayne Mullin (R-Okla.) said that he had also been in touch that very day with Rep. Mike Lawler (R-N.Y.), who panned the Senate proposal as 'dead on arrival.'
'That was just a placeholder,' Mullin said. 'I talked to Mike about it. We understand.'
House Ways and Means Chair Jason Smith (R-Mo.), in a social media post late Monday, offered congratulations to Crapo on his chamber's opening bid.
'We've worked closely together for months to reach agreement on key provisions, while understanding the work that remains to be done to achieve consensus between both chambers of Congress and get this bill on the President's desk,' said the House's chief tax writer. 'We will thread that needle to respect the needs of both bodies in the days ahead.
Benjamin Guggenheim contributed to this report.