‘We’ll give this bill a couple shots of Botox and make it more beautiful.’
Senate Republican leaders are hoping to clear the party’s “big, beautiful” tax-cut-and-spending bill by their self-imposed July 4 deadline. The challenge is tweaking the bill without nuking its chances of passing when it returns to the lower chamber for final approval.
“I think what we have to be aware of is Speaker Johnson has a tenuous, slim majority there,” Senator Steve Daines (R., Mont.) tells National Review. “We’ll give this bill a couple shots of Botox and make it more beautiful.”
The House-passed bill will make permanent many of the expiring provisions in the 2017 Tax Cuts and Jobs Act (TCJA), while also increasing border-security and military funding, implement $1,000 child-savings accounts called “Trump accounts,” institute a temporary higher standard deduction for seniors, and implement temporary tax exemptions for tips and overtime pay.
During the negotiations, budget hardliners in the House were able to extract major concessions in exchange for their votes, such as earlier phaseouts for clean-energy tax credits created by the Democrats’ mammoth climate bill in 2022 as well as earlier start dates for work requirements on Medicaid and SNAP benefit beneficiaries.
But challenges remain in the upper chamber, the final arbiter in the budget reconciliation process, which allows lawmakers to circumvent the Senate’s 60-vote threshold for passing legislation. Senate GOP leaders can afford only three no votes to get the bill to President Donald Trump’s desk.
Fiscal hawks like Ron Johnson (R., Wisc.) say that the House-passed bill’s $1.5 trillion in spending cuts is “false advertising,” considering the bill is projected to add $2.7 trillion to the deficit through 2034. Johnson wants to return to pre-pandemic spending levels — a goal he hopes to achieve by doing a “line by line” review of the federal budget.
“Everybody likes the tax cut, but when you’re $37 trillion in debt on the path to over $60 trillion in debt, right when the Social Security Trust Fund is running out, somebody’s got to be the dad that says, ‘I know everybody wants to go to Disney World, but we just can’t afford it,’” Johnson told reporters on Thursday.
And Johnson insists that primary threats won’t get him to the yes column.
“President Trump can threaten a primary and those guys want to keep their seats,” Johnson added. “I understand the pressure. Can’t pressure me that way. I ran in 2010 because we were mortgaging children’s futures. It’s wrong. It’s immoral.”
The House-passed legislation’s phaseouts of clean-energy tax credits also carry risks in the Senate, where many GOP lawmakers are not keen on eliminating tax benefits for projects that bring jobs and business investment to their home states.
Then, there are the centrist and populist conservatives who are worried about entitlement reforms. The conference is broadly on board with the legislation’s new work requirements for childless, able-bodied adults under age 64 (with exceptions for pregnant women and the disabled), more frequent eligibility checks, and funding reductions to states that provide Medicaid coverage to illegal immigrants.
But budget hawks in the Senate are calling for major changes to provider taxes, which levy steep fees on hospitals and other health-care facilities to raise state revenue for Medicaid to increase federal matching funds. Those proposals are attracting opposition from senators with large populations of Medicaid recipients, who are also raising concerns about a provision in the House-passed bill that puts cost-sharing requirements on states for the Supplemental Nutrition Assistance Program (SNAP).
“There are some things that we want to address on the Medicaid side that I think are challenging for us in Alaska,” Lisa Murkowski (R.) told reporters on Thursday, without elaborating on specific changes she’d like to see.
“The provider tax is a real issue with me, because that’s going to really hurt our state in lots of ways,” Senator Jim Justice (R., W.V.) told NR when pressed on Medicaid-related changes he’d like to see with the House-passed bill.
The state and local tax deduction (SALT) cap increase is also extremely unpopular in the Senate, though there’s an understanding that nixing the write-off is a nonstarter in the lower chamber. To win over Republicans from high-tax blue states like California, New Jersey, and New York, House GOP leaders agreed to raise the SALT deduction from its expiring $10,000 cap up to $40,000 per year, with phaseouts for earners who make more than $500,000 a year.
Most Senate Republicans would prefer to eliminate the tax write-off entirely. “Florida taxpayers are not going to subsidize New York and California’s state budget,” Senator Rick Scott (R., Fla.) told NR when pressed on the SALT deduction.
As they head home for Memorial Day weekend recess, Senate GOP leaders will try to find consensus so that the upper chamber’s edits won’t be dead on arrival when it returns to the House.
“To our friends in the Senate, I would just say, the president is waiting with his pen,” Speaker Mike Johnson (R., La.) said earlier this week after the legislation cleared the House.