Crucial megabill changes could come today

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IN TODAY'S EDITION:— Senate Finance to tweak Medicaid, tax plans— What's in Senate Homeland, Judiciary's megabill texts— Possible changes ahead for rescissions
Senate Finance Republicans could release their all-important megabill text as soon as today, outlining changes to Medicaid cuts and President Donald Trump's tax incentives.
Senate Majority Leader John Thune met with the president at the White House on Thursday and told our Jordain Carney afterwards to expect Trump's campaign promises, like tax relief for tips and overtime work, to be intact in the bill text.
'The president wants his priorities,' Thune said in our brief Thursday evening interview. His comments come after Senate Republicans had been contemplating rolling some of Trump's tax policies back to make room for larger business tax cuts.
But there are strategic reasons for Senate Finance Chair Mike Crapo to postpone release of his committee's text until next week. Generally, lawmakers don't like tax legislation to sit out in the daylight for lobbyists to pick apart.
The bill text could also drive key policy disagreements. Sen. Josh Hawley said if the text doesn't ease up enough on the proposed Medicaid cuts, he would be willing to force a vote on the Senate floor that could include a rollback of limits on taxes that fund state obligations for the program.
'I'd be happy to amend the bill on the floor. Quote me on that,' Hawley told reporters on Thursday. 'I don't think that's probably what leadership wants.'
There could also be major heartburn for blue-state House Republicans if the bill text waters down their $40,000 state-and-local-tax deduction cap.
In a notable moment during Thursday's House vote on the rescissions package, one of the hardcore SALTers, Rep. Nick LaLota, suddenly switched his vote from 'no' to 'yes' after a huddle with House Speaker Mike Johnson on the floor.
He declined to confirm whether SALT had to do with his flip, but said: 'I expect constituents will be quite pleased when they get $40,000 worth of SALT.'
Other must-reads on megabill dynamics this morning:
— Where GOP leaders are smoothing things over: Republican senators and the White House now view Senate hard-liners Ron Johnson, Mike Lee and Rick Scott as on track to support the megabill they've railed against for not slashing enough spending, Jordain reports this morning (Pros got it last night).
Johnson softened his tone after convincing Trump in a one-on-one phone call to let him work with administration officials on his deficit-reduction plan. The Wisconsin Republican subsequently met with Vice President JD Vance and National Economic Council Director Kevin Hassett.
— Where GOP tensions are rising: Homeland Security Chair Rand Paul and Budget Chair Lindsey Graham released dueling proposals for Homeland's portion of the megabill late Thursday, after GOP leaders deemed the conservative numbers Paul put forward as unworkable.
— What else the GOP is tweaking: Senate Judiciary's take on the megabill, also released late Thursday, includes new immigration fees and a carrot for Hawley (reauthorization of the Radiation Exposure Compensation Act). But it leaves out House-passed language to limit the ability of federal courts to enforce contempt orders and a deregulatory provision known as the REINS Act. Republicans could still try to get a version of REINS past the parliamentarian.
TGIF. Happy Friday the 13th! Email your Inside Congress scribes at [e-mail], [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 out.
The Senate is out.
Next week: The House is out of session next week. The Senate will continue working through Trump's nominations, including Gary Andres to be assistant secretary at HHS, and will take a final vote Tuesday on a landmark stablecoin regulatory framework.
THE LEADERSHIP SUITE
GOP leaders show support for Israel after strike on Iran
Republicans were quick to post messages of support after Israel launched what it described as a 'preemptive' military strike aimed at Iran's nuclear facilities.
Johnson posted an Israeli flag on X Thursday night, stating 'Israel IS right — and has a right — to defend itself!' Thune posted a warning to Iran and a commitment from the Senate to help Israel.
'The United States Senate stands ready to work with President Trump and with our allies in Israel to restore peace in the region and, first and foremost, to defend the American people from Iranian aggression, especially our troops and civilians serving overseas,' Thune said in a post on X. 'Iran should heavily consider the consequences before considering any action against Americans in the region.'
See also from Rachael Bade late last night: MAGA warned Trump on Iran. Now he's in an impossible position.
Padilla incident divides top Republicans
Johnson suggested the Senate should censure Sen. Alex Padilla after the California Democrat interrupted Homeland Security Secretary Kristi Noem's Los Angeles press conference Friday and was forcibly removed and handcuffed by officers.
Johnson told reporters Padilla's 'behavior … rises to the level of a censure' and that 'there needs to be a message sent by the body as a whole that this is not what we're going to do.'
Padilla is unlikely to face Senate reprimand — the last time a member was censured was in 1990, for fiscal improprieties. Even if he was formally rebuked, unlike in the House, Padilla wouldn't be stripped of rights and privileges.
Thune didn't go as far. He said Thursday evening that he had spoken to Padilla and reached out to Noem but hadn't connected yet. 'We want to get the full scope of what happened, and do what we would do on any incident like this involving a senator, which is to try to gather all the relevant information,' Thune said.
Meanwhile, top Democrats have rushed to Padilla's defense. Senate Minority Leader Chuck Schumer, who spoke to Padilla Thursday afternoon and said he's 'standing strong,' said the incident 'reeks of totalitarianism' and demanded 'answers now.' House Minority Leader Hakeem Jeffries said 'every single person who was involved in manhandling Senator Padilla should be held accountable to the full extent of the law.'
Dozens of House Democrats marched to Hill GOP leaders' offices Thursday afternoon in protest (though Thune and Johnson weren't there). Several are demanding Noem testify before Congress; some even called for her to resign.
Thune gears up for another spending fight
The Senate majority leader is already signaling that the $9.4 billion rescissions package narrowly passed by the House Thursday 'could be' changed in the Senate. 'We'll see,' he told reporters Thursday.
But even senators pushing for changes acknowledge that doing so would be highly complicated. That includes Senate Appropriations Chair Susan Collins, who reiterated to Lisa Thursday that she's concerned with several aspects of the White House's request to rescind funding for public broadcasting and foreign assistance. Sen. Lisa Murkowski told Calen Wednesday evening that she's worried about potentially defunding local Alaska affiliates of NPR and PBS.
Thune said he expects to take up the rescissions package in July. Congress has until midnight on July 18 to act on the legislation, otherwise the proposal will expire and the White House is required to spend the money as lawmakers intended.
Schumer's 'DEFCON 1' approach to saving clean-energy credits
Schumer is tapping a wide network of allies to help him sway Republicans away from wholesale repeals of green credits from the Biden-era climate law he helped pass. The New York Democrat told our POLITICO E&E News colleague Kelsey Brugger he's strategized with clean-energy executives and enlisted a group of people to call 16 senators who have shown 'some discomfort' with the repeals. That includes advocates; tech executives; governors with major renewables investments; Duke Energy and Southern Co. executives; Sean McGarvey, president of North America's Building Trades Unions and even 'friendly' Trump administration officials.
Senate Republicans left town saying they're considering various pathways to back away from the House's harsh rollbacks by extending phaseout timelines and easing other restrictions. Sen. John Curtis, a leading defender of the credits, told our Josh Siegel Thursday that 'we're getting to a good place' and he's 'encouraged' by the state of conversations. Sen. Thom Tillis, another advocate, told Lisa Thursday that Republicans are still putting baseline text together.
POLICY RUNDOWN
CRUZ'S FED RESERVE PLAN HITS A SNAG — A group of Republicans is questioning a proposal from Sen. Ted Cruz that would bar the Federal Reserve from paying interest to banks, potentially dooming its chances of making it into the GOP megabill, our Jasper Goodman and Victoria Guida report.
Cruz, the Senate Commerce chair, and other Republicans argue that stopping the Fed from paying interest to financial institutions that keep reserves at the central bank could deliver large savings over the next decade if passed in the party-line bill. But Senate Banking Chair Tim Scott, whose panel has jurisdiction over the Fed, rejected the idea of including it in the 'big, beautiful bill,' saying in a statement on Thursday that it 'is not a decision to be rushed.'
'Any legislative change to the Federal Reserve's framework must follow regular order,' he said, as opposed to through the reconciliation process.
TICK TOCK ON TIKTOK — Treasury Secretary Scott Bessent testified on Thursday that the uncertain fate of TikTok in the U.S. is not a part of the ongoing trade talks with China, our Anthony Adragna reports. Bessent's comments to the Senate Finance Committee came a day after Trump touted a 'deal' with China following trade talks in London.
Congress passed a bill last year requiring the ban on TikTok in the U.S. if it was not sold from Beijing-owned ByteDance. But Trump has pushed back enforcement of the ban with two 75-day extensions. The next deadline is June 19, but Trump has floated yet another extension.
GOP GRILLS 'SANCTUARY' STATE GOVS — GOP lawmakers on Thursday hammered blue-state Govs. Kathy Hochul, Tim Walz and JB Pritzker over their states' so-called sanctuary policies as Republicans look to cast Democrats as soft on immigration enforcement in upcoming elections.
The House Oversight hearing served as a platform for politically ambitious Republicans to test their attacks, our Shia Kapos, Emily Ngo and Elena Schneider report. Rep. Elise Stefanik, who's weighing a bid for Hochul's job after Trump yanked her nomination for U.N. ambassador, grilled the governor over undocumented immigrants accused of violent crimes in New York.
'These are horrific crimes, and they're heartbreaking,' Hochul sought to interject. But Stefanik cut her off: 'They're horrific crimes that are committed on your watch.'
The Democratic governors walked a careful line, attempting to balance immigrants' rights while insisting that undocumented people with criminal records should be deported and casting immigration enforcement as a federal issue. But the hearing also highlighted tensions within the Democratic Party over immigration policy and messaging, as protests over the Trump administration's ICE raids spread from Los Angeles to other cities.
Best of POLITICO Pro and E&E:
CAMPAIGN STOP
NEW CAMPAIGN ETHICS WORKING GROUP — The House Ethics Committee is launching a subpanel to review its guidance on campaign activities, our Hailey Fuchs reports. The new working group on the bipartisan committee was announced Thursday and will be led by GOP Rep. Nathaniel Moran and Democratic Rep. Sylvia Garcia, both of Texas.
The two members will 'review and make recommendations to improve, clarify, and modernize the Committee's guidance regarding campaign activity by House Members, officers, and employees,' according to the committee.
THE BEST OF THE REST
Officers sue to compel Congress to install a Jan. 6 riot memorial at Capitol, from Michael Kunzelman at The Associated Press
Democratic Lawmakers Are Taking Out Liability Insurance As Trump Ramps Up Legal Threats, from Oriana González and Riley Rogerson at NOTUS
House passes bill that would void DC 'sanctuary' policies, from Jim Saksa at Roll Call
CAPITOL HILL INFLUENCE
FIRST IN INSIDE CONGRESS: NEW CODEL — A bipartisan group of House lawmakers is scheduled to leave for the first-ever privately sponsored congressional trip focused on the Abraham Accords today, Nicholas Wu writes in. Reps. Brad Schneider, Jimmy Panetta, Zach Nunn and Don Bacon are traveling to Saudi Arabia, Bahrain, the United Arab Emirates and Israel for a trip hosted by the Atlantic Council's N7 Initiative. They'll head into a volatile political environment after Israel launched a strike against Iran last night, though we're told the trip is still on.
JOB BOARD
Austin Gage is now a senior associate at Innovative Federal Strategies. He previously was legislative director and counsel for Rep. Hal Rogers.
HAPPY BIRTHDAY
Rep. Jerry Nadler … Del. Eleanor Holmes Norton … POLITICO's Eli Stokols … Carnegie Mellon's Margaret Harding McGill … Patrick Cuff … Kirtan Mehta … Mara Liasson … Andrew Lavigne … Society for Vascular Surgery's Dylan Lopez … Michelle Korsmo … National Journal's Casey Wooten … John Del Cecato of AKPD Message and Media … Victoria Maloch … Jo Eckert … Jessica Ek of American Cleaning Institute … Sarah Lovenheim … Landy Wade of Sen. Kirsten Gillibrand's office … Trent Allen … Patrick McGill … Will King of the House Natural Resources Committee
TRIVIA
THURSDAY'S ANSWER: Gregory Clark correctly answered that Ron Paul was the fiscal hawk who hit a home run out of the park in the 1979 Congressional Baseball Game.
TODAY'S QUESTION, from our Katherine Tully-McManus: Name the former House lawmaker whose insider trading indictment included video footage of the White House Congressional Picnic.