‘We’ll all find out on Monday, but if you’re asking me my opinion, I think we’ll end up making it permanent,’ Senator John Kennedy said.
Senate Finance Chairman Mike Crapo told senators during a closed-door meeting on Wednesday that he plans to include full expensing permanence in the Senate-drafted reconciliation bill, Senator Steve Daines (R., Mont.) told reporters after the huddle, a major win for the Finance Committee members who have spent months lobbying for business-tax incentive permanence in this year’s tax bill.
As NR reported earlier today, the House GOP–drafted legislation only extends full expensing for research and development, bonus depreciation for equipment and machinery, and interest deductibility through 2029, while expanding temporary full expensing for new factories through 2028. Senate Finance Committee members believe that full expensing permanence for all three provisions is a pro-growth move that would give businesses more certainty, boosting investment, wages, and earnings in the long run.
“We’ll all find out on Monday, but if you’re asking me my opinion, I think we’ll end up making it permanent,” Senator John Kennedy (R., La.) said in a brief interview on Wednesday. “Daines is correct in this assessment.”
Earlier Wednesday, National Review reported that Senate Majority Leader John Thune has been privately touting the White House’s support for business-tax permanence in the final reconciliation bill in conversations with members and conservative groups.
Some Senate Republicans caution that the final bill text isn’t out yet and that making this change will require winning over the rest of the conference.“That’s directionally true,” Senator Thom Tillis (R., N.C.) told NR when pressed on expensing permanence provisions in the Senate-drafted bill, “but I also believe Senator Crapo was saying that that’s what he’s negotiating toward.
“I think that the odds of that ultimately making the final package are pretty good, but not certain,” Tillis said.
“Nothing’s finalized,” Senator Markwayne Mullin (R., Okla.) told NR. “A big group of us want permanent, but we also know that everything’s on the table. And the ultimate goal is we’ve got to get 51 on the bill.”
To get their way on the business-tax extension front, pro-permanence GOP senators will need to find offsets elsewhere in the legislation. They could amend the House-passed version’s provisions relating to temporarily exempting tips and overtime from taxes, though tweaking those provisions risks infuriating the president, given that he campaigned heavily on both provisions in 2024.
One House-passed provision that Senate Republicans are eager to rewrite is the legislative language surrounding the state and local tax (SALT) deduction. After pressure from blue-state lawmakers, House GOP leaders agreed to raise the current $10,000 SALT cap to $40,000, with phaseouts for higher earners. Most Senate Republicans would prefer to keep the cap as is or nix it altogether, arguing that it’s a giveaway to high earners that unfairly subsidizes high-tax schemes.
“There’s a difference in what we think and what the House thinks right now. So more to come on that,” Daines told NR on SALT.
The Senate is also expected to make changes to the House GOP¯passed bill’s clean energy tax credit phaseout timelines. Along with changes to the SALT deduction, House Republicans warn that major edits to the House-passed bill risk upending the entire reconciliation endeavor, given the GOP’s narrow majority in the lower chamber. Other major changes to the bill are possible.
“We have to continue to urge the Senate to make as few changes as possible and not to mess with what is a very good product,” Representative Nicole Malliotakis, a member of the tax-writing Ways and Means Committee, told NR in a brief interview on Tuesday. “It was very well balanced and fought for, particularly the tax provisions, but also on the Medicaid side.”