Big, Beautiful Backlash: GOP hammered at home

IN THIS EDITION

Republicans are already getting hammered over the OBBB

How Kaine convinced Dems to embrace rebellion

The Vault: Lawmakers fight gambling tax hike

The Future of Energy: A Leading Voice

THE TOP

Republicans are already getting hammered over the OBBB

Happy Tuesday morning.

News: Senate Minority Leader Chuck Schumer is warning Senate Republicans in a new “Dear Colleague” that passing a rescissions package will have “grave implications” for any FY2026 government-funding deal.

In the letter, Schumer said that it’s “absurd” to expect Democrats to cut a bipartisan deal on government funding while Republicans are approving President Donald Trump’s “purely partisan scheme… to tear up those very same agreements.”

“This is beyond a bait and switch — it is a bait and poison-to-kill,” Schumer wrote.

What America is reading. Trump and GOP congressional leaders got the big spectacle they wanted on July 4. A White House signing ceremony for the One Big Beautiful Bill, lots of flags, fireworks, even a B-2 bomber flyover. Speaker Mike Johnson gave Trump the gavel he used to close out the House vote.

But now comes the reality — and the headlines back home. Medicaid cuts of nearly $1 trillion. No extension of Obamacare subsidies. Tens of billions of dollars in SNAP cuts. Governors may be forced to call special legislative sessions to deal with gaping holes in their own budgets.

While the biggest federal cuts won’t come until after the midterm elections, the negatives for the GOP reconciliation megabill may overwhelm any political boost that Trump and Republicans get from extending and expanding the 2017 Trump tax cuts, at least in the short term. That means vulnerable GOP lawmakers get hit now, with the worst coming later. Republicans will need to turn around public perception of the OBBB, even in their own party.

Let’s focus on Medicaid, the biggest issue, and one that Schumer, House Minority Leader Hakeem Jeffries, and other party leaders will make their focus for 2026.

In Maine, where Sen. Susan Collins (R-Maine) is up for reelection, two rural hospitals are in danger of closing, with another two potentially in trouble. Roughly 40,000 Mainers could lose health care. These Medicaid cuts were the main reason Collins was just one of three Senate Republicans to vote no, even as she fought for inclusion of a $50 billion rural hospital “stabilization fund” in the bill.

Yet Collins — the only Republican senator up for reelection in a state won by Kamala Harris – knows she’ll still have to defend the bill even though she voted against it. Collins denied to the Portland Press Herald/Maine Sunday Telegram that she was allowed to vote no because Senate GOP leaders knew they had the votes to pass the measure without her. “That is absolutely ludicrous,” Collins said as Maine Democrats hammered away.

In Pennsylvania, Democratic Gov. Josh Shapiro – a potential 2028 White House contender up for reelection next year – warned that as many as 25 rural hospitals could go under while more than 310,000 Pennsylvanians lose Medicaid coverage. Pennsylvania has at least four House districts that may be in play next year. GOP Rep. Brian Fitzpatrick (Pa.) was one of only two House Republicans to vote no.

“They knew what they were voting for. They voted for it,” Shapiro said on Monday of the nine Pennsylvania House Republicans who backed the measure.

This is happening in other swing states too. North Carolina GOP Sen. Thom Tillis – who was under heavy pressure from Trump for criticizing the reconciliation bill – retired and voted no, putting a Republican-held seat in jeopardy next year. Tillis handed out flyers saying the Tarheel State would lose nearly $40 billion in funding and coverage for more than 660,000 residents would be at risk.

What about Minnesota, now a 2026 Senate battleground? UCare, a Minnesota health provider, withdrew temporarily from Medicaid on Monday, affecting 88,000 members. Dozens of the state’s hospitals are already in financial distress and some may close.

How about Michigan, another battleground state? The Michigan Health and Hospital Association says state hospitals will lose out on $6 billion in Medicaid funding over a decade. At least 200,000 Michiganders – possibly up to 700,000 – will lose coverage. Obamacare enrollees will get hit by sharp premium increases with the end of subsidies.

Some news on this front. Liberal outside group Unrig Our Economy is launching a new ad attacking Rep. Rob Bresnahan (R-Pa.) on Medicaid cuts. The $1 million ad buy in Pennsylvania’s 8th District, part of the group’s larger $10 million House campaign, features a constituent who says Bresnahan promised to her that he wouldn’t vote to cut Medicaid.

“Afterwards, when the votes were done, when I found out how he voted, I was very upset to hear that Congressman Bresnahan voted for the largest cut to Medicaid in history,” the constituent says.

And as we told you in the Midday edition on Monday, the DCCC has launched digital ads in three dozen districts focusing on how Medicaid cuts impact hospitals.

Our new show: Fly Out Day. When we launched this company, we – Bres (PBN Bres), Anna and Jake – said our goal was to relentlessly cover congressional leaders for an audience of Hill obsessives that, quite frankly, we consider ourselves a part of.

So please let us introduce “Fly Out Day,” Punchbowl News’ weekly show about the politics of legislating.

If you’re reading this newsletter, chances are you know what fly out day is: The day when members of Congress skip town for their home states.

“Fly Out Day” will be an end-of-week show with a newsmaker conversation — a two-way conversation, not a lecture — about the issues that are driving legislating in Washington. We’ll give lawmakers time to answer questions about the substance of what they’re doing and why.

And we’ll have a very vibrant reporter roundtable with journalists who are actually covering these issues and know their way around the Capitol.

Haley Talbot – of the Big Mad Index, CNN and NBC fame — is running all things video for Punchbowl News.

This is a show about Power, People and Politics. Here’s a bit more.

Drop us a line with questions – we’re first name at punchbowl dot news. And subscribe to our YouTube channel here.

— John Bresnahan, Jake Sherman and Andrew Desiderio

TODAY at 8:30 a.m. ET, we’ll sit down with Sen. Mike Rounds (R-S.D.). Join us as Punchbowl News Founder and CEO Anna Palmer and Rounds discuss the news of the day, financial services and payments security. There’s still time to RSVP!

THE SENATE

How Kaine convinced Dems to embrace rebellion

When Republicans won control of Washington in November, Sen. Tim Kaine (D-Va.) asked his staff to compile a list of the procedural ways he could try to rein in a president determined to stretch the bounds of executive power.

Just six months in, Kaine — a longtime advocate of reclaiming Congress’ Article I authority — has checked off pretty much the entire “motley list” his staff put together.

This year alone, Kaine has triggered votes on five privileged resolutions and co-sponsored a sixth on Middle East arms sales. Just one has been successful — an April vote to block President Donald Trump’s tariffs on Canadian imports.

Along the way, Kaine even faced some resistance from his Democratic colleagues who weren’t accustomed to that level of defiance of the chamber’s leadership.

“Expressing concerns is easy. How about this — there’s a power to stop this if you don’t like it. So let’s get [everyone] on the board,” Kaine said in an interview. “There’s just a tendency to want to avoid hard votes.”

Kaine’s sales job. The former Democratic vice presidential nominee saw value in essentially hijacking the Senate floor, forcing senators of both parties to go on the record about controversial elements of Trump’s agenda. The votes can also serve as oversight tools and, more importantly, allow a senator from the minority party to control the floor.

During closed-door meetings earlier this year, Kaine argued to fellow Democrats that the party needed to start thinking outside the box to push back against Trump. Strongly worded letters weren’t going to cut it.

Kaine encountered what he described as “an initial reluctance.” The Senate has “devolved” into a place where the leadership controls everything, Kaine said, so the notion of one senator butting in so consistently to force votes on hot-button issues was foreign to many.

“People are used to the leaders controlling the floor, and there was an anxiety or discomfort about it,” Kaine noted.

Kaine said he even had to make his case to Senate Minority Leader Chuck Schumer on the Canada tariff effort. That’s because of concerns from some Democrats about the exact mechanism, which was to roll back Trump’s national emergency declaration for fentanyl trafficking. Schumer and every Senate Democrat voted for the measure.

And Kaine recalled Sen. Ron Wyden (D-Ore.), the Finance Committee ranking member, noting to him that “nobody’s ever done this before.” That’s because nobody ever did what Trump did, Kaine responded, which was to use emergency economic powers for this purpose.

Even before that April vote, Kaine started to detect a “shift in attitude” among Democratic senators. Kaine said this happened shortly after Schumer’s controversial decision in March to support a GOP-drafted government funding bill that badly split the caucus.

“I voted for Chuck to be leader. I support Chuck to be leader,” Kaine said. “At the same time, I want to be led, I don’t want to be ruled.”

Kaine’s other privileged resolutions have centered on repealing Trump’s national energy emergency, forcing a human rights report for El Salvador, preventing Trump from taking further military action against Iran and blocking Trump’s global tariffs. Looking ahead, Kaine can also trigger another tariff-related vote later this year.

— Andrew Desiderio

The Vault: Lawmakers fight gambling tax hike

There’s already a campaign to reverse one of the One Big Beautiful Bill Act’s tax hikes, just days after it became law.

Rep. Dina Titus (D-Nev.) introduced a bill Monday to restore bigger tax deductions for gamblers. The legislation is gathering backers and already has bipartisan support.

The effort is focused on a change Senate Republicans made to the reconciliation bill, which drew backlash when the legislation was nearing the finish line.

Beginning in 2026, gamblers can only deduct 90% of the money they’ve lost on bets from their total winnings for the year. Players are currently allowed to subtract 100% of losses from their gains before paying taxes.

The change is expected to bring in about $1.1 billion more in revenue compared to continuing the current policy, according to Joint Committee on Taxation estimates.

Titus said in a statement that the new limit “will only push people to not report their winnings and to use unregulated platforms.”

Reps. Ro Khanna (D-Calif.) and Troy Nehls (R-Texas) also joined as cosponsors, according to Titus. Nehls voted for his party’s reconciliation bill that included this change just five days ago.

Nevada pounces. Rep. Steven Horsford, a fellow Nevada Democrat, is also expected to join Titus’ bill.

The new deduction cap presents an opportunity for Nevada Democrats to push back on the GOP’s tax agenda, given the major gambling industry back home.

Democrats have several competitive seats to defend in Nevada, and they’re already countering President Donald Trump’s hallmark campaign promise, “no tax on tips.” The pitch sold well in Nevada, which has a big population of tipped workers in the hospitality industry.

On that front, Nevada Democrats have been working to remain vocal backers of “no tax on tips” while promoting alternatives they argue are better than Republicans’ version. The reconciliation bill includes $32 billion in tax cuts on tipped wages.

— Laura Weiss

SPECIAL PROJECTS

The Future of Energy: A Leading Voice

The third segment of our series, The Future of Energy, features a wide-ranging conversation on legislation and policy with Rep. Chuck Fleischmann (R-Tenn.).

Fleischmann, the chair of the House Appropriations Committee’s subcommittee on energy and water development, spoke with us about what unified Republican control of Washington means for energy policy. Fleischmann’s big takeaway: fossil fuels are back in vogue after a Biden-era focus on green energy.

Nuclear energy is a particular passion for Fleischmann. The Tennessee Republican chatted with us about the future of that industry, the role tax credits play in energy production and the need for American energy dominance as a pillar of national security.

Check out the third segment here and be sure to look out for the podcast on our conversation with Fleischmann.

– Ally Mutnick

…AND THERE’S MORE

Staff news: Brian Colas is leaving his role as staff director for the Senate GOP Conference to work on Sen. Tom Cotton’s (R-Ark.) reelection campaign and launch a new PR firm.

James Arnold, Colas’ deputy, will take over at the end of the month as staff director for the GOP Conference, which Cotton chairs.

Colas is a longtime Cotton adviser and confidant. He was featured on Punchbowl News’ Power List earlier this year.

New House directory: The House Administration Committee’s panel on modernization and innovation is launching a new internal online staff directory. The initiative, called LegiDex, is meant to increase collaboration between House offices.

The House Digital Services team developed LegiDex after the bipartisan Select Committee on the Modernization of Congress recommended creating an online staff directory. The directory can only be accessed by Hill staffers.

— Andrew Desiderio and Max Cohen

MOMENTS

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