GOP eyes cuts to Trump's tax promises

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19 hours ago

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IN TODAY'S EDITION:— GOP senators target Trump's tax priorities— New X-date gives megabill breathing room— RFK Jr. to fire CDC's vaccine advisers
Senate Finance Republicans are increasingly looking to dial back key items on President Donald Trump's tax policy wish list. And it's pitting them against the architect of the House-passed tax legislation, Ways and Means Chair Jason Smith — and potentially even the White House.
The rub is this: The House version of the megabill would restore tax incentives for research and development, business equipment and debt interest through 2029, which Trump has indicated he supports. But Senate Republicans are dead-set on making them permanent, a proposition that would likely add hundreds of billions in more red ink to the legislation.
To offset that cost, GOP senators are looking to water down other tax provisions they believe aren't as 'pro-growth.' Those policies include 'no taxes on tips,' 'no taxes on overtime' and tax relief for seniors — all proposals Trump touted on the campaign trail and collectively boast a price tag of roughly $230 billion, according to the Joint Committee on Taxation.
Smith is warning senators to tread carefully in challenging Trump's desires.
'I think that the United States Senate will not want to scale down the president's priorities. No tax on tips, no tax on overtime are two of his top priorities,' Smith told reporters Monday. 'Are there some tweaks that they can do to it that I would recommend? Yes, and I have recommended.'
But some Senate Republicans who sit on the Finance panel have made clear they have their own ideas. When we asked Ron Johnson whether he believes 'no tax on tips' or 'no tax on overtime' are pro-growth, he gave a terse 'nope.'
'They're making a case to increase the labor supply,' Johnson told us. 'I would just extend the current tax law.'
Sen. Thom Tillis has likewise been pushing to make changes to both policies, telling Benjamin Monday that 'no tax on overtime' should be rewritten to ensure it only applies to people working over 40 hours a week.
Meanwhile, House Republicans are hoping to tweak some language in their bill they believe the Senate parliamentarian will identify as non-compliant with the budget reconciliation process. They'll do so by using a procedural maneuver within the Rules Committee that won't require the chamber to take a standalone vote on a revised measure, five people told our Meredith Lee Hill, Jordain Carney and Jennifer Scholtes.
House Republican leaders expect a report on the potential Senate problems this morning, though Majority Leader Steve Scalise acknowledged they may not have the full list before the Rules hearing scheduled for later today.
'I don't think there will be any big surprises,' Speaker Mike Johnson added Monday, 'but that's part of the process.'
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THE SKED
The House is in session and voting on a bill that would undo a District of Columbia ban on collective bargaining with respect to police discipline matters and a bill that would prohibit non-citizens from voting in the district at 1:30 p.m. and 5 p.m.
— Appropriations will have a subcommittee 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 9:30 a.m.; a subcommittee hearing on the president's fiscal 2026 budget request for HUD with Secretary Scott Turner testifying at 10 a.m.; and a classified subcommittee markup for the fiscal 2026 Defense funding bill at 12 p.m. The full panel will mark up the fiscal 2026 Military Construction-VA funding bill at 3 p.m.
— Republicans and Democrats will hold their weekly conference meetings at 9 a.m. Democrats will meet at the DCCC.
— GOP leaders will hold their post-meeting news conference at 10 a.m.
— Agriculture and Financial Services will mark up a digital assets bill at 10 a.m.
— Judiciary will mark up a bill to repeal a law that prevents protesters from blocking people from receiving reproductive services, among other legislation at 10 a.m.
— Energy and Commerce will have a subcommittee hearing on the president's fiscal 2026 budget request for the Energy Department with Secretary Chris Wright testifying at 10 a.m.
— Intel will have a closed subcommittee hearing on the president's fiscal 2026 budget request for the CIA with Director John Ratcliffe testifying at 10 a.m.
— Oversight will have a hearing on security concerns over 23andMe's bankruptcy sale at 10 a.m.
— Democratic leaders will hold their post-meeting news conference at 10:45 a.m.
— Small Business will have a hearing on minor league baseball's impact on the economy at 2 p.m.
— Rules will vote to establish parameters for floor debate on the rescissions package at 2 p.m.
The Senate is in session and voting on David Fotouhi's nomination to be deputy administrator of the EPA and to end debate on Stephen Vaden's nomination to be deputy secretary of Agriculture at 11:15 a.m. The Senate will then vote on Vaden's nomination and to end debate on Andrew Hughes' nomination to be deputy secretary of HUD at 2:15 p.m.
— Armed Services will have a hearing examining the Navy in review of the fiscal 2026 Defense Authorization Request, with Secretary John Phelan testifying at 9:30 a.m.
— Appropriations will have a subcommittee hearing on the president's fiscal 2026 budget request for the NIH, with testimony from Director Jay Bhattacharya at 10 a.m.
— Foreign Relations will consider various nominations, including Andrew Puzder to be ambassador to the European Union, Howard Brodie to be ambassador to Finland and Benjamin Black to be CEO of the United States International Development Finance Corporation at 10 a.m.
— Republican and Democratic senators will have weekly conference lunches at 12:45 p.m.
— Agriculture will consider Brian Quintenz's nomination to lead the Commodity Futures Trading Commission at 3 p.m.
The rest of the week: The House will take up the rescissions package, HALT Fentanyl Act and immigration legislation targeting D.C. The Senate will work through Trump's nominations and landmark cryptocurrency legislation.
THE LEADERSHIP SUITE
Rescissions hits the Rules Committee
House Republican leadership is expecting to send the White House's rescissions package through the Rules Committee this afternoon, paving the way for a floor vote by Thursday.
Johnson and Scalise are confident they can appease members' concerns about clawing back money Congress has already greenlit and slashing funding for the PEPFAR program and public media.
'I still have questions about the package and I need more specificity,' Rep. Dan Newhouse told Calen Monday. 'We've already appropriated this money and I'm just concerned about the precedent this sets.'
Johnson said Monday the White House budget office is working to provide more details for skeptics.
Thune gets a 'big, beautiful' timeline reprieve
Senate Majority Leader John Thune can take a little more time passing his chamber's version of the megabill now that the Congressional Budget Office is pushing back its forecasted date for when the country will run out of cash to pay its bills. The X-date has always been the unofficial deadline to send Trump his 'big, beautiful bill'; it's now predicted to fall between mid-August and the end of September, rather than by Aug. 1.
'It gives a little more runway,' Thune told reporters Monday, but 'I still think that we want to complete this' by July 4.
Top Senate Republicans are plowing ahead: The Energy and HELP committees are set to release bill text today. Agriculture text is expected to land in the 'later part of this week,' Chair John Boozman told Jordain. Finance is aiming for Friday, but could slip into next week.
Crapo and Boozman will be among the committee chairs who will brief colleagues on their panels' plans in a closed-door session Wednesday.
In more forward movement, Sen. Josh Hawley told Jordain Monday that GOP leaders are actively working with him to address his concerns about the House's freeze on the Medicaid provider tax. Tillis expressed confidence to Lisa and other reporters Monday that aggressive phase-out dates House Republicans set for Biden-era green credits under Democrats' 2022 climate law would get extended.
But Thune is still looking for ways to appease deficit hawks who want higher spending cuts. After Dan Bishop, the No. 2 at OMB, met with a group of Senate conservatives Monday night, Ron Johnson said 'we're just not meeting the moment.' He's hoping to finalize a report today that illustrates his concerns and intends to sit down soon with administration officials.
Thune tees up more crypto votes
Thune wants to pass landmark cryptocurrency legislation this week that would create new rules for dollar-pegged digital tokens, our Jasper Goodman and Jordain report. The Senate majority leader teed up the stablecoin bill for another procedural vote as soon as Wednesday.
But GOP leaders have yet to finalize an amendment deal with Democrats, partly because of Sen. Roger Marshall's push to force a vote on controversial legislation to crack down on credit card swipe fees.
'We're trying to figure out if there's still a path forward on amendments, but the goal is to have it across the floor' this week, Thune told Jordain.
Opening for Homeland Committee chair
Rep. Mark Green's surprise announcement that he will be retiring from Congress this year for another opportunity will free up the House Homeland Security gavel.
The current front runner: Rep. Michael McCaul, who previously chaired the committee from 2013 to 2019. The speaker met with Green and McCaul last Thursday for a meeting Green requested, three people tell Joe Gould and Meredith, and the group discussed McCaul taking over the role to avoid a messy, mid-session fight.
'I'd be honored to serve if asked by the conference,' McCaul said. 'I would only do so as a placeholder for the remainder of the term.'
If that falls through, Rep. Michael Guest told Meredith he's interested, though he had not talked to the speaker as of early Monday evening and didn't receive a heads up about about Green's retirement.
That the Ethics chair was kept in the dark about Green's plans suggests the outgoing Homeland chair might not have disclosed his new job prospects to the Ethics Committee, Meredith writes in. Our Hailey Fuchs adds that under House Ethics rules, members are required to disclose negotiations with a future private employer to the panel. An Ethics spokesperson declined to comment on whether Green shared such information.
POLICY RUNDOWN
RFK JR. TO FIRE VACCINE ADVISERS — HHS Secretary Robert F. Kennedy Jr. is making moves to fire all current members of the CDC's outside vaccine advisory panel, which plays a key role in setting vaccine policy.
Kennedy, a longtime vaccine skeptic, will then be able to select their replacements. And his latest actions will test assurances he made to Senate HELP Chair Bill Cassidy during the confirmation process that he would maintain the panel 'without changes.' Cassidy told reporters Monday that the pledge was about the panel's process, not the members, but still raised concerns.
'Now the fear is that the [panel] will be filled up with people who know nothing about vaccines except suspicion,' Cassidy, a physician, said in a social media post. 'I've just spoken with Secretary Kennedy, and I'll continue to talk with him to ensure this is not the case.'
Sen. Susan Collins also signaled displeasure with the developments: 'I don't know who serves on those committees,' she told reporters. 'But it seems to be excessive to ask for everybody's resignations … [it] raises serious questions.'
MEDICARE OUT OF THE MEGABILL? — Republicans are growing more skeptical that a bipartisan Medicare proposal will make it into the final megabill package, Lisa and Ben report.
The bill from Cassidy and Sen. Jeff Merkley would go after overpayments to Medicare Advantage plans, which some Republicans say fits under Trump's pledge to root out 'waste, fraud and abuse.' It could also yield major savings, which would help Republicans pay for the broader tax-and-spending package.
But the proposal has sparked heartburn for House and Senate Republicans and backlash from the insurance industry. And backers are facing skepticism from other Republicans that the megabill is the right vehicle for the change.
'There's a lot of work to be done to make sure you don't have unintended consequences,' Tillis told Lisa Monday.
THE 'HACK BACK' PLAN — Republicans on the House China Committee are drafting legislation to empower American companies to conduct defensive cyber strikes against Chinese hackers targeting the U.S., our John Sakellariadis reports.
The White House has not yet signaled engagement with, or support for, the effort. It's also unlikely this bill would become law this Congress, as the idea has long been criticized by cyber experts as impractical or escalatory.
But China hawks see it as a necessary step amid anxiety that the U.S. is on the losing end of a brewing digital conflict with Beijing. The emerging legislative framework would allow U.S. companies to hack and disable IT systems used by the Chinese to stage their attacks.
ENERGY SUMMIT TODAY: At 8 a.m. ET today, congressional leaders, White House officials and energy experts will explore the strategic choices shaping America's energy future under the Trump administration at POLITICO's Energy Summit. Key speakers include Jarrod Agen, deputy assistant to the president and executive director of the National Energy Dominance Council; Sen. John Curtis; Sen. Martin Heinrich; Reps. Brett Guthrie and Bob Latta; Jennifer Granholm, former U.S. Energy secretary and senior counselor at DGA Group and more. Find more details about the event or watch live.
Best of POLITICO Pro and E&E:
TUNNEL TALK
ON THE HILL TODAY — You may spot some former professional baseball players around the Capitol. Jim Sundberg and Larry Hardy are set to attend the Small Business hearing on the minor league's impact on the economy, a tipster tells Mia.
THE BEST OF THE REST
Gelato, Boat Rides, Cooking Classes and Energy Policy: Lawmakers Keep Going to a Stunning Italian Villa for Free, from Haley Byrd Wilt and Anna Kramer at NOTUS
White House Pushes Texas to Redistrict, Hoping to Blunt Democratic Gains, from J. David Goodman and Shane Goldmacher at The New York Times
CAPITOL HILL INFLUENCE
FLY IN — More than 30 owners of rural energy companies will hit the Hill today to urge Republican lawmakers to preserve clean-energy tax credits from Democrats' 2022 climate law. They will meet with the offices of more than 30 lawmakers, including Sens. Lisa Murkowski and John Curtis, who have voiced support for preserving the credits.
FLORIDA MAN TO D.C. — Continental Strategy is adding another powerful Floridian in Washington with the hire of Sen. Rick Scott's former top aide, Craig Carbone, POLITICO Influence reports.
JOB BOARD
Shang Yi has been sworn in as acting administrator of the U.S. Maritime Administration. He most recently was director of investigations for the House Homeland Security Committee.
Alyssa Anderson is now chief of staff for Rep. Ryan McKenzie. She was most recently chief of staff for Rep. Juan Ciscomani and previously worked for Rep. Dan Crenshaw and then-NRCC Chair Tom Emmer.
HAPPY BIRTHDAY
Former Rep. Lynn Jenkins … former Sen. John Edwards … James Rockas of ACLJ Action … Michael Daniels ... Edelman's Matthew Streit … BPI's David O'Brien … Thomas Showalter ... Al Mottur … Matt Jansen of Rep. Melanie Stansbury's office … former Louisiana Gov. Bobby Jindal … Kylie Bohman … Ben DeMarzo … J.D. Grom … Nicole Hager Fingerfoot
TRIVIA
MONDAY'S ANSWER: Jack McKeon correctly answered that John Trumbull painted the Declaration of Independence painting in the Rotunda and has four paintings total in the Rotunda.
TODAY'S QUESTION, from Jack: Who was the first U.S. president to visit all 50 states while in office?
The first person to correctly guess gets a mention in the next edition of Inside Congress. Send your answers to [e-mail].