Latest news with #budgetreconciliation
Wall Street Journal
3 hours ago
- Business
- Wall Street Journal
Whose Pork Do You Mean, Elon?
Elon Musk's work at the Department of Government Efficiency made him persona non grata in the Beltway, and most criticism was nasty and unfair. That's what Washington does to outsiders who want to shrink its power. But that makes it all the more unfortunate that Mr. Musk is now joining the Beltway crowd in trying to kill the House tax bill. 'This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination,' the Tesla CEO tweeted Tuesday, as the Senate begins considering its version of budget reconciliation. 'Shame on those who voted for it: you know you did wrong. You know it.'
Daily Mail
5 hours ago
- Business
- Daily Mail
The senate referee who could decide the fate of Trump's mega-bill
A rarely-talked-about, unelected bureaucrat within the Senate may have the power to tank President Donald Trump 's big beautiful bill. The Senate Parliamentarian, a position held by Elizabeth MacDonough since 2012, is about to weigh in on whether the House-passed One Big Beautiful Bill Act runs afoul of the upper chamber's rules. The parliamentarian is more often than not an afterthought, typically because their role is to be the Senate's hall monitor, essentially making sure mundane processes on the floor are adhered to. However, the parliamentarian is thrust into the spotlight every time senators try to pass a bill through budget reconciliation, a process that allows the Senate to pass items with a simple majority instead of the usual 60 votes needed to overcome the filibuster. Since Trump's big beautiful bill is going through reconciliation, MacDonough has the power to veto certain provisions that she feels aren't related to the budget or are solely policy objectives. The appeal of the reconciliation process is obvious. Since Republicans control 53 seats in the Senate, a united GOP can essentially pass the bill without input from a single Democratic senator. The catch is, MacDonough can pick and choose which line items in the bill need to be slashed with red ink. She will be responsible for interpreting whether the Big Beautiful Bill complies with something called the Byrd Rule, which has been around since 1985. The Byrd Rule is named after the late Sen. Robert Byrd, who was a key figure in instituting the guardrails around reconciliation packages like the one Trump is trying to ram through. The most important facet of the Byrd Rule states that reconciliation bills cannot have provisions in them that don't have an effect on the budget. Put simply, if a provision doesn't meaningfully increase or decrease federal spending, it can be considered extraneous and be tossed out of the bill. The Byrd Rule also prohibits reconciliation bills from overhauling Social Security or increasing the deficit for a fiscal year not included in the bill's purview. The test to see whether a bill complies with the rule has been referred to as the 'Byrd Bath.' MacDonough last used the 'Byrd Bath' to water down President Joe Biden's Build Back Better package in 2022. Specifically, she struck down three separate attempts by the Democrats to provide a pathway to citizenship for eight million immigrants living in the United States illegally. Now, she's in the position to take a major bite out of Trump's agenda, though its not entirely clear what she might take aim at. Many have speculated MacDonough will rule against a provision buried deep within the bill that will upend the US judicial system. Section 70302 of the bill would severely limit the power of federal courts to enforce injunctions or hold government officials in contempt. This comes as federal judges have slapped the second Trump administration with an unprecedented 25 nationwide injunctions in its first 100 days , most of which curtailed the government's ability to deport illegal migrants. During a townhall on Friday, Sen. Joni Ernst, R-Iowa, told a constituent that she believed this provision has no chance of getting through the Senate. 'I don't see any argument that could ever be made that this affects mandatory spending or revenues, so I just don't see that I don't see that getting into the Senate bills,' Ernst said. The big beautiful bill also contains a section that prohibits Medicaid funds from going to any clinic that provides abortions. Back in 2017, the parliamentarian found that a similar provision in a reconciliation bill violated the Byrd Rule, which could mean she'll strike it down again this time. The current bill's regulations on AI could also be cast aside in the impending Byrd Bath. There is precedent for the Senate simply ignoring the parliamentarian. The declarations of MacDonough and all the other parliamentarians before her have been non-binding and lacking in actual enforcement power. Just two weeks ago, the Senate voted 51-44 to repeal a federal waiver that allowed California to institute an electric vehicle mandate, completely disregarding the parliamentarian's guidance on the issue. Democrats condemned the move by Republicans, with Senate Minority Leader Chuck Schumer saying, 'Republicans, I believe, I am certain, will come to regret the ill-considered step they take tonight.' Going back a bit further, there is also precedent of Senate leaders getting rid of the parliamentarian over disagreements on the Byrd Rule. On May 7, 2001, then-Senate Majority Leader Trent Lott, R-Miss., fired the parliamentarian at the time, Robert Dove, because he was getting in the way of President George W. Bush's budget bill. Exactly one month later, with a new parliamentarian in place, Bush was able to sign his first landmark tax cut into law. This scenario appears unlikely to repeat, since Senate Majority Leader John Thune has indicated that he isn't even willing to overrule the parliamentarian, let alone fire her. 'We're not going there,' Thune told reporters on Monday.
Daily Mail
5 hours ago
- Business
- Daily Mail
The powerful politician no one's heard of who can torpedo Trump's 'Big Beautiful Bill'
A rarely-talked-about, unelected bureaucrat within the Senate may have the power to tank President Donald Trump 's big beautiful bill. The Senate Parliamentarian, a position held by Elizabeth MacDonough since 2012, is about to weigh in on whether the House-passed One Big Beautiful Bill Act runs afoul of the upper chamber's rules. The parliamentarian is more often than not an afterthought, typically because their role is to be the Senate's hall monitor, essentially making sure mundane processes on the floor are adhered to. However, the parliamentarian is thrust into the spotlight every time senators try to pass a bill through budget reconciliation, a process that allows the Senate to pass items with a simple majority instead of the usual 60 votes needed to overcome the filibuster. Since Trump's big beautiful bill is going through reconciliation, MacDonough has the power to veto certain provisions that she feels aren't related to the budget or are solely policy objectives. The appeal of the reconciliation process is obvious. Since Republicans control 53 seats in the Senate, a united GOP can essentially pass the bill without input from a single Democratic senator. The catch is, MacDonough can pick and choose which line items in the bill need to be slashed with red ink. She will be responsible for interpreting whether the Big Beautiful Bill complies with something called the Byrd Rule, which has been around since 1985. If MacDonough decides to exercise her veto power, key provisions of President Donald Trump's Big Beautiful Bill could be deleted The Byrd Rule is named after the late Sen. Robert Byrd, who was a key figure in instituting the guardrails around reconciliation packages like the one Trump is trying to ram through. The most important facet of the Byrd Rule states that reconciliation bills cannot have provisions in them that don't have an effect on the budget. Put simply, if a provision doesn't meaningfully increase or decrease federal spending, it can be considered extraneous and be tossed out of the bill. The Byrd Rule also prohibits reconciliation bills from overhauling Social Security or increasing the deficit for a fiscal year not included in the bill's purview. The test to see whether a bill complies with the rule has been referred to as the 'Byrd Bath.' MacDonough last used the 'Byrd Bath' to water down President Joe Biden's Build Back Better package in 2022. Specifically, she struck down three separate attempts by the Democrats to provide a pathway to citizenship for eight million immigrants living in the United States illegally. Now, she's in the position to take a major bite out of Trump's agenda, though its not entirely clear what she might take aim at. Many have speculated MacDonough will rule against a provision buried deep within the bill that will upend the US judicial system. Section 70302 of the bill would severely limit the power of federal courts to enforce injunctions or hold government officials in contempt. This comes as federal judges have slapped the second Trump administration with an unprecedented 25 nationwide injunctions in its first 100 days, most of which curtailed the government's ability to deport illegal migrants. During a townhall on Friday, Sen. Joni Ernst, R-Iowa, told a constituent that she believed this provision has no chance of getting through the Senate. 'I don't see any argument that could ever be made that this affects mandatory spending or revenues, so I just don't see that I don't see that getting into the Senate bills,' Ernst said. The big beautiful bill also contains a section that prohibits Medicaid funds from going to any clinic that provides abortions. Back in 2017, the parliamentarian found that a similar provision in a reconciliation bill violated the Byrd Rule, which could mean she'll strike it down again this time. The current bill's regulations on AI could also be cast aside in the impending Byrd Bath. There is precedent for firing the parliamentarian. In May 2001, then-Senate Majority Leader Trent Lott, R-Miss. (left), fired the parliamentarian at the time, Robert Dove (right), because he was getting in the way of President George W. Bush's budget bill There is precedent for the Senate simply ignoring the parliamentarian. The declarations of MacDonough and all the other parliamentarians before her have been non-binding and lacking in actual enforcement power. Just two weeks ago, the Senate voted 51-44 to repeal a federal waiver that allowed California to institute an electric vehicle mandate, completely disregarding the parliamentarian's guidance on the issue. Democrats condemned the move by Republicans, with Senate Minority Leader Chuck Schumer saying, 'Republicans, I believe, I am certain, will come to regret the ill-considered step they take tonight.' Going back a bit further, there is also precedent of Senate leaders getting rid of the parliamentarian over disagreements on the Byrd Rule. On May 7, 2001, then-Senate Majority Leader Trent Lott, R-Miss., fired the parliamentarian at the time, Robert Dove, because he was getting in the way of President George W. Bush's budget bill. Exactly one month later, with a new parliamentarian in place, Bush was able to sign his first landmark tax cut into law. This scenario appears unlikely to repeat, since Senate Majority Leader John Thune has indicated that he isn't even willing to overrule the parliamentarian, let alone fire her. 'We're not going there,' Thune told reporters on Monday.
Forbes
8 hours ago
- Business
- Forbes
House Budget Bill Cuts Average Taxes By $2,900, Favors High-Income Households
The budget reconciliation bill passed by the House on May 22 would cut taxes by an average of about $2,900 in 2026, according to a new analysis by the Tax Policy Center that reflects eleventh hour changes to the measure. About 84 percent of households would get a tax cut. The cost would be steep, however. The Joint Committee on Taxation estimates the measure would reduce federal revenue by $3.9 trillion through 2034. As with earlier versions of the bill, the measure would be highly regressive. Tax cuts would be relatively small for low- and moderate-income households but much bigger for those with higher-incomes, especially those making between about $460,000 and $1.1 million (in the highest-income 95th-99th percent). The House bill would cut taxes for the lowest-income households (those making less than about $35,000) by about an average of $160, or less than 1 percent of their after-tax income. Middle-income households, who will make between about $67,000 and $119,000, would pay an average of $1,850 less, or 2.4 percent of their after-tax income. By contrast, those making between $460,000 and $1.1 million would receive an average tax cut of about $21,000, or 4.3 percent of their after-tax income. The very highest-income 0.1 percent of households, those making $5 million or more, would receive average tax cuts of almost $300,000 in 2026, about 3.3 percent of their after-tax income Households making $217,000 or more would get nearly 60 percent of the benefits of the bill, which the House calls the One Big Beautiful Bill Act (OBBBA). Those in the top 5 percent, who make $460,000 or more, would get about one-third of the benefit. Middle income households would receive about 13 percent, while the lowest income tax filers would get about 1 percent. The House bill extends most individual tax provisions of the 2017 Tax Cuts and Jobs Act (TCJA), including its higher standard deduction and child tax credit and lower tax rates for many. It continues and expands special tax benefits for some pass-through businesses such as partnerships and sole proprietorships, adds some business tax breaks, and includes a higher estate tax exemption. At the request of President Trump, it makes tips and overtime tax free, at least temporarily, and allows consumers to deduct interest on auto loans. It increases the standard deduction by up to $4,000 for tax filers age 65 and older and temporarily boosts the standard deduction for all itemizers. At the same time, it caps itemized deductions for top-bracket taxpayers, limits tax benefits for certain immigrants, raises taxes on university endowments, and repeals a wide range of green energy tax subsidies that were adopted by Congress in 2022. It also limits the ability of low-income households to receive subsidies, in the form of tax credits, when they buy health insurance on the Affordable Care Act exchanges. Changes to the OBBBA just before it passed the House included a more generous deduction for state and local taxes and some offsetting tax hikes. The new TPC analysis reflects those adjustments. Because the bill has so many highly targeted tax breaks, it would affect even people within the same income groups in very different ways. That is especially striking among low-income households, those making about $35,000 or less. Excluding the loss of those premium tax credits, they'd get a modest tax cut averaging about $160 in 2026. But after taking into account their loss of some of those health insurance premium subsidies, TPC estimates after-tax incomes of the very lowest income households would decline on average, compared to current law. Those making $20,000 or less would see their incomes fall by an average of $40 in 2026. Similarly, mostly thanks to a more generous child tax credit, families with children would do far better than others making the same income. For example, a middle-income family with kids would pay about $3,000 less on average in 2026, while all households in that income group would see their taxes reduced by about $1,600 on average.. Effects would vary at the top of the income distribution as well. TPC estimated that even though the top 1 percent would do very well overall on average, about 17 percent would pay more than under current law. In part this is due to limits on the ability of some pass-through businesses to fully deduct their state and local taxes, an expansion of the Alternative Minimum Tax, and a limit on all itemized deductions for top-bracket households. The Senate is likely to want to make changes to the bill. Possibilities include key spending provisions, such as cuts to Medicaid and food assistance[TG1] , and certain tax provisions, such as the limit on the state and local tax deduction. But the major tax contours of the House bill, which have been endorsed by President Trump, are likely to survive.
The Independent
a day ago
- Business
- The Independent
Trump wants his ‘One Big, Beautiful Bill' to sail through the Senate. These five factions stand in the way
On Monday evening, the U.S. Senate returns from a week-long recess to take up President Donald Trump's proposed domestic spending bill, which he's dubbed the ' One Big, Beautiful Bill.' The House of Representatives barely passed the bill last month in the wee hours of May 22. It was a coup for House Speaker Mike Johnson. But passing it through the House was only halftime. And while House Republicans were just as divided as Senate Republicans, the upper chamber GOP has to navigate stricter and more arcane rules. Senate Republicans have only 53 votes, which is not enough to overcome a Democratic filibuster. Thus, they plan to use a process called budget reconciliation, wherein they can pass legislation with only 51 votes as long as it is tied to the budget. Trump has also said he understands the Senate will inevitably change the bill. 'I want the Senate and the senators to make the changes they want,' he told reporters. 'It will go back to the House and we'll see if we can get them. In some cases, the changes may be something I'd agree with, to be honest.' The bill also represents Senate Majority Leader John Thune's first major challenge. Thune inherited the mantle from his mentor Mitch McConnell after serving as the whip for Republicans since 2019. But to get this bill across the finish line, he will need to satisfy multiple factions and leaders in the Senate. Here are the five groups that Thune will need to navigate. The Fiscal Hawks The Senate does not have a formal group of conservatives who want to slash spending the way that the House does with the Freedom Caucus. But they still have a bevy of fiscal conservatives. Chief among them is Sen. Ron Johnson of Wisconsin, who last month told The Independent that reductions in spending were ' fake cuts.' Other senators in this faction include Mike Lee of Utah and Rand Paul of Kentucky. Sen. Rick Scott of Florida, who challenged Thune for the top job in the Senate last year, told Turning Point USA leader Charlie Kirk that he is a 'no' on the bill in its current form. To win them over, Thune will need to probably exact some kind of spending cuts. But that might infuriate the next group. The MAGA populists No part of the bill has received more attention than the changes to Medicaid. Specifically, the legislation would require able-bodied adults without dependent children to work, participate in community service or education for at least 80 hours a month. In a last-minute deal to appease conservatives, House Republican leaders moved up the work requirements to begin at the end of 2026 rather than in 2029. Republicans who hail from states that expanded Medicaid might also fret about this. Chief among these Republicans is Sen. Josh Hawley of Missouri, who has sought to reorient the GOP to become the party of working-class voters and has adopted a more populist tone compared to other Republicans. Hawley has said he would oppose major changes to Medicaid because of how many people in his state depend on it and the Children's Health Insurance Program. If the Senate keeps the changes to Medicaid made in the House or goes even further on Medicaid, expect Hawley to stand up. The Moderates and the front-liners Republicans have a pretty favorable map in the coming midterms. With 53 seats, they only truly face risks in two swing state races: Thom Tillis' re-election campaign in North Carolina and Susan Collins' campaign in Michigan. Tillis for the most part has focused on renewing the Tax Cuts and Jobs Act, the 2017 tax cuts that Trump signed in his first presidency. But Tillis also joined Sens. John Curtis of Utah, Jerry Moran of Kansas and Alaska's Lisa Murkowski, the most moderate Republican senator, on a letter calling to preserve renewable energy tax credits in the Inflation Reduction Act, former president Joe Biden's signature climate legislation. The House legislation phases out many of the credits and some conservatives, such as the aforementioned Lee and Scott, want a rollback in those credits. Historically, Republican moderates and swing-state incumbents have to eat the provisions conservatives insert into legislation. But if a handful of them break, there is a chance they might have leverage. The Senate Parliamentarian The most important person that Thune may have to convince is not even a senator, but rather a mostly anonymous rule keeper — the Senate parliamentarian. Consider the parliamentarian as the Senate's referee who polices the rules. The current parliamentarian, Elizabeth MacDonough, is seen by most as an impartial arbiter of the rules. MacDonough will be responsible for subjecting the bill to what is called the 'Byrd Bath,' the strict criteria for what can be included in budget reconciliation, named for the late majority leader Robert Byrd. Perhaps the biggest peril for Republicans will be if she rules that the revenue and spending parts of the bill are 'merely incidental' to the parts that do not relate directly to the budget. MacDonough infuriated progressive Democrats twice during Biden's presidency: once when she advised against allowing a minimum wage increase in the American Rescue Plan, Democrats' Covid relief legislation; and a second time when during the deliberations for Build Back Better when she advised against allowing immigration reform. Already, Senate Minority Leader Chuck Schumer (D-N.Y.) said Democrats plan to challenge the provision in the bill to restrict the ability of courts to hold government officials in contempt. Also expect other provisions on immigration and the ban on using Medicaid dollars to pay for gender-affirming care to be challenged. Donald Trump Yes, the president could become a stumbling block to his own bill. Even if Thune satisfies all members of his conference and gets most of the bill through the so-called Byrd Bath, Trump's approval matters most. While the president has never cared much about the intricacies of policies, he responds to public perception and opinion. If he thinks the bill will cause backlash as modified in the Senate because of spending or Medicaid cuts, he might send Thune back to the drawing board. Also, if it does not go far enough on beefing up immigration enforcement, he could balk and send it back.
