President Donald Trump has set his sights on securing a major tax cut bill by July 4, a goal that now requires him to navigate a complex legislative landscape. The president is expected to meet with Senate Majority Leader John Thune and Finance Committee Chair Mike Crapo to address the growing divide between House and Senate Republicans over the structure of the megabill. The House’s version of the tax package includes extending certain business deductions through 2029, but making these cuts permanent would cost an additional $450 billion. Senate Republicans, however, are pushing for permanent business tax cuts and are considering offsetting costs with reductions in spending to avoid increasing the deficit. The White House has made it clear that it will not entertain any compromises that dilute Trump’s promises, adding another layer of tension to the negotiations. Meanwhile, Senate Republicans are also questioning whether the Senate can meet the self-imposed July 4 deadline, raising concerns about the feasibility of finalizing the entire package.
One of the primary sticking points in the negotiation is the method of funding the permanent tax cuts. House Republicans, led by fiscal hawks, are insisting that any additional tax cuts be offset with dollar-for-dollar spending cuts. This has led to the suggestion that Trump’s campaign promises to eliminate taxes on tips and overtime pay might need to be scaled back to meet these demands. However, the Trump administration has made it clear that they are not willing to make any concessions in this area, with a White House official stating, “We’re not willing to entertain any scaling back of our signature promises.”
Senators are also looking for other ways to reduce the cost of the tax package, including potentially lowering the state and local tax (SALT) deduction cap. The House had quadrupled the SALT deduction cap to $40,000 as part of a crucial compromise with blue-state Republicans, but some GOP senators are threatening to block the bill if this cap is lowered. House Majority Leader Steve Scalise has emphasized the importance of maintaining the SALT cap, stating, “Obviously, it was very heavily negotiated in the House and we don’t want to see it lower.”
Meanwhile, Senate leaders are working towards a timeline that would allow the Senate to finalize the bill by June 23 and hold a series of votes in the second half of that week, which would help the House meet its own deadline of July 4. However, some GOP senators are already openly questioning whether the Senate can achieve this within the projected timeline, raising concerns about the feasibility of meeting the original deadline. Senate Majority Leader Thune is quietly threatening to keep senators in town during the recess week to ensure the bill moves forward, but the uncertainty over the timeline remains a major challenge.
As the negotiations continue, other developments are also making headlines. House Speaker Mike Johnson is pushing for a vote on a package to rescind $9.4 billion in funds that Congress previously approved for global aid and public broadcasting. This vote is expected to be contentious, with only three Republicans willing to defect if all Democrats oppose the measure. Additionally, the Senate is moving closer to finalizing a landmark cryptocurrency bill that aligns with one of Trump’s key priorities. The bipartisan support for this legislation has cleared another procedural hurdle, setting the stage for a vote later this week.
Finally, Senate Agriculture Republicans have unveiled a new proposal to cut the Supplemental Nutrition Assistance Program (SNAP), which is significantly less aggressive than the version included in the House-approved megabill. This proposal is seen as a potential compromise that may be more palatable to moderate and at-risk Republicans. However, these developments underscore the broader challenges facing the GOP as they attempt to reconcile their internal differences in order to pass a major legislative agenda.