It will not be easy to pass the “big, beautiful” budget reconciliation bill by the July 4 deadline Senate leadership is eyeing.
On Monday, the Senate Finance Committee—which handles matters such as health care and taxes—released its draft legislative text for the “big, beautiful bill.”
This ten-year budgetary framework is the vehicle for fulfilling a number of President Donald Trump’s campaign promises, such as funding border security and extending his 2017 tax cuts.
In May, the House of Representatives passed its version of the bill by a margin of 215-214, with one “present vote.” This was thanks to last minute concessions from House leadership to holdouts.
Now, the Senate’s version of the bill seems to rework many of those midnight hour deals, which could make passing the bill in the House a Herculean task.
For example, the Finance Committee slows down the phaseout of Biden-era green energy incentives—an issue that many in the House Freedom Caucus will live and die over.
“Yeah, I will not vote for this,” wrote Rep. Chip Roy, R-Texas, in response to the news that some solar and wind energy subsidies would continue well past the Trump administration under the Senate’s framework.
Another faction that scoffed at the Senate’s plan on X were the SALT deduction advocates.
A state and local tax (SALT) deduction allows residents in high-tax states to deduct their state and local taxes on their federal tax returns. This is a major priority for Republican lawmakers from blue states such as New York.
Under Trump’s first-term 2017 tax cuts—which are set to expire at the end of the year—taxpayers currently can deduct up to $10,000 on their returns under SALT.
Speaker of the House Mike Johnson, R-La., successfully won over a number of holdout Republican SALT advocates from blue states to vote for the bill in the House by offering a quadrupling to $40,000 of the cap on SALT deductions for households that earn under $500,000 a year.
Now, this cap is back to $10,000 in the Senate.
“DEAD ON ARRIVAL,” wrote Rep. Mike Lawler, R-N.Y., in response to the first rumors of this drop in the cap.
What’s worse for the GOP’s effort to get the bill done before Independence Day is the fact that Lawler has many allies in his fight for a higher SALT deduction.
For a half dozen blue-state Republicans, this tax break is a make-or-break provision.
Republican Reps. Young Kim of California and Andrew Garbarino both said the SALT changes put “the entire bill at risk” in a statement.
New York Republican Rep. Nicole Malliotakis, R-N.Y., called it a “slap in the face” and Rep. Elise Stefanik, R-N.Y. said the “10K number will have to go up.”
These five SALT warriors hold a great amount of leverage, since they could kill the entire bill if just one of them voted against it.
There are, however, some changes which please House members.
For example, the Senate’s framework further limits states’ ability to tax healthcare providers.
Republicans often accuse states such as California of taxing providers simply to inject that money back into the health care system—a payment which the federal government is required to match with a subsequent payment to the state.
The new adjustments to the provider tax will please many fiscal hawks in the House.
But what’s top of mind at the moment is the math in the Senate to get the bill passed.
Sen. Josh Hawley, R-Mo., who represents a state with high Medicaid enrollment, shivered at the Senate’s work.
“This is going to defund rural hospitals effectively in order to, what, pay for solar panels in China,” said Hawley to reporters. “I’ll be really interested to see what the president thinks about this.”
The coming days will be a great test of both Senate Majority Leader John Thune, R-S.D., and Speaker of the House Mike Johnson, R-La., as they attempt to wrangle their tight majorities in both chambers.
With the president focused on the emerging Israel-Iran conflict, they might be on their own for a bit.
