Trump Tax Bill Faces Obstacles as Senate Reconvenes

Bloomberg

7 days ago

00:00
The Senate returning to Washington this week to begin deliberation on President Trump's big, beautiful bill. Joining us now is Bloomberg's Tyler Kendall from Washington. Tyler, what do we expect to actually get done this week? Yeah, well, there's a lot of different issues that the Senate ultimately has to work through. They're coming back after a recess and hearing from some of their constituents about what ends up being in this bill. Of course, the big issue is what you've been talking about, which is hiking the debt ceiling. We know that the House plan is calling for raising it from $4 trillion, but the Senate has said that they would allow even a bigger hike to $5 trillion. We'll have to see how things like that shake out. And then they're also looking at some other priorities when we're discussing whether or not we could see some deeper spending cuts here, since we know that some moderates are pushing back on any changes when it comes to Medicaid, as well as how quickly they're going to roll back some of those clean energy tax credits under the IRA at the end of the day. We're expecting White House officials to really start ramping up the pressure on lawmakers to ultimately come to a deal because they are saying that they need to see this done by July 4th because this is so pivotal to the Trump administration's ultimate economic agenda at the end of the day. We do know, though, that the harder deadline is going to be what that date is. Treasury Secretary Scott Bessent didn't give an updated or an exact date. Those previously said that could fall sometime in August, which perhaps would give lawmakers a little bit more buffer room. But he did go on in that interview, Lisa, to allude to the date as a negotiating tactic, saying that they are keeping that sort of in their pocket as a way to motivate lawmakers forward on that bill. What are the biggest sticking points that senators have in this bill that was brought to them by the House? What are some of the biggest sticking points? Well, definitely we have to see how it shakes out, particularly on those spending cuts. And then also that I mentioned, but also what happens with the tax cut priorities here. Going forward, one of the biggest sweeteners in getting that House bill over the finish line was lifting the salt cap to $40,000. And we know, as you well know, there aren't really any senators that are advocating for that to be ultimately included. And we have to keep in mind it needs to ultimately pass both chambers here. So could that be on the chopping block in a meaningful way? House Speaker Mike Johnson has made it clear that he has sent the message to Leader John Thune that he wants to see that ultimately in the bill. And then I would also watch what ends up happening to some of the temporary tax cuts. We know that leadership has signaled that they want to see some of those made permanent, including those priorities from the White House, including no taxes on tips and overtime pay. Also, some of those business incentives like to build factories in the US. Could those perhaps be made extended or more permanent? And what would that mean to these conversations about ultimately adding to deficit spending?