The Archive

THE VAULT LOOKAHEAD

The Vault Quarterly: Welcome to the tax bonanza

BRT’s Bolten talks taxes and tariffs in 2025

We haven’t had a Banking chair like Tim Scott

The Vault Power Matrix

The House GOP bellwethers to watch in the reconciliation rumble

THE TOP

The Vault Quarterly: Welcome to the tax bonanza

Call it what you like — the Super Bowl of tax, taxmageddon, the tax showdown at the K Street corral. Whatever name you give it, the battle over the expiring Trump tax cuts is here.

Republicans swept the election and have the chance to pass a bill extending the 2017 tax cuts, many of which expire at the end of 2025, without needing any Democrats’ votes, thanks to the filibuster-proof reconciliation process.

Now the question is: What can they do, and how messy will it get before this is all over?

The stakes are extremely high. President-elect Donald Trump promised a lot of tax cuts on the campaign trail. There will be immense pressure on congressional Republicans to deliver on the overall package. If they fail, many of their signature 2017 tax cuts go poof at the end of the year.

Republicans are already brawling over the best strategy to get this done along with other top priorities like border security and energy policy.

With all the tax drama breaking loose, it’s a huge moment for another big American power center: corporate America.

So we sat down with Business Roundtable CEO Joshua Bolten to talk about the influential lobbying group’s strategy and priorities in the 2025 tax debate.

Also in this edition: We have your House GOP members to watch for any sign of trouble for getting a bill through with a barely-there majority of 217-215 early next year.

It’s a new day for the banking world too, as Sen. Tim Scott (R-S.C.) prepares to ascend to chair of the Senate Banking Committee.

What will Scott do with his gavel, and — more importantly — how will he go about it? All signs point to the South Carolinian being a markedly different kind of chair than his Republican predecessors.

But look — we know why you’re reading. Yes, The Vault Power Matrix is here. Get it while it’s hot!

Thanks as always for reading. Say hello or send tips to laura@punchbowl.news and brendan@punchbowl.news.

— Laura Weiss and Brendan Pedersen

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THE INTERVIEW

BRT’s Bolten talks taxes and tariffs in 2025

The Business Roundtable is a powerhouse of influence in Washington, deploying its over 200 CEO members to score wins on corporate America’s priorities.

With Republicans’ takeover of Congress and the White House next year, the BRT is getting ready to lobby hard on tax, trade and other economic agenda items.

It enters the fray knowing companies could be looking at a mixed bag when it comes to President-elect Donald Trump’s priorities. Like it or not, the CEO trade group is readying to spend cash and move the needle in its direction.

So we sat down with BRT CEO Joshua Bolten to talk about what’s coming in Trump 2.0.

The lobbying blueprint: BRT’s priorities next year are tax, trade and regulation. Bolten said the group will have to play defense on tax and trade but sees some opportunities too. On regulations, it’s all upside under Trump in Bolten’s view.

BRT plans to intensify its lobbying next year, including through advertising, supplier engagement, letter-writing, Hill staff briefings, op-eds, grassroots efforts and meetings with lawmakers and Trump officials.

The group is also planning to deploy its CEOs for meetings — an effort that is already underway. BRT CEOs in town for the group’s quarterly meeting this week met to talk tax with key lawmakers on Capitol Hill Wednesday.

The tax agenda: BRT’s tax priorities have shifted a bit after the election. The group has the same objectives, but it’s less worried about some taxes going up, including the corporate tax rate.

Bolten said companies are “comfortable” with the 21% rate and primarily focused on preserving it.

The group also wants to make sure that taxes on multinational companies’ foreign earnings don’t go up and that some tax breaks get done. The top priority there is a full, upfront deduction for research and development spending. That expired in 2022, and BRT wants to revive it retroactively and make the treatment permanent moving forward. It’s a huge goal for corporate America, but one that will get tricky in a complicated tax debate.

“The actual expiration of the R&D tax credit was a bad shock to the system here in the United States,” Bolten said. “And so I think now without permanence… or very long extensions, I think you will find companies making calculations and hesitating in marginal cases about where to do their R&D.”

Tariff nerves: On the trade front, Bolten said Trump’s tariff threats are giving companies a lot of pause.

Bolten said companies have been preparing for this possibility knowing Trump could win the White House and have been working to diversify their supply chains to avoid targeted tariffs for years now, especially to avoid locating any critical production solely in China. But he said there just isn’t much that companies can do to be ready for big, widespread tariffs.

Here’s more:

Bolten emphasized that if Trump instead veers toward targeted tariffs, that’s an easier pill to swallow and can address unfair trade practices. But he argued that bringing supply chains entirely to the United States to avoid tariffs just isn’t realistic as businesses work to stay internationally competitive.

The debt factor: We also checked in with Bolten — a former Office of Management and Budget director — on the ever-climbing U.S. debt. Concern about perpetual budget deficits has risen on Capitol Hill. But the GOP tax plans that BRT supports would worsen the situation in the years to come, according to Congress’ nonpartisan scorekeepers.

Bolten said BRT members are very concerned about the mounting debt and view it as unsustainable. How does he square that view with the push for tax cuts? Bolten argued taxes should fall more on consumption than on businesses. He added that companies will be ready to help if Congress has the stomach to go after the biggest area of government spending: spending on programs like Social Security and Medicare.

“There’s very little political appetite to address that,” Bolten said. “If and when there is, I think you can expect the business community to come in with constructive suggestions about how to put together a sustainable plan.”

Did you think we’d skip DOGE? The other big area of focus for BRT is deregulation. The group is focused on competition policy from the Federal Trade Commission and Justice Department, as well as changes to permitting rules to speed up the process for companies to start projects.

That’s where Bolten sees the “Department of Government Efficiency” stepping in. The so-called DOGE, run by mega-billionaire Elon Musk and biotech entrepreneur Vivek Ramaswamy, is tasked with figuring out how to cut government spending and streamline the federal government.

Bolten called it “an odd animal” given its position outside of government, but he said BRT could work with Musk and Ramaswamy on goals via DOGE.

“I think there is an opportunity there for that initiative to promote some radical and positive change in the way the U.S. does business, and I think the best target is permitting,” Bolten said.

– Laura Weiss

COMMITTEE WATCH

We haven’t had a Banking chair like Tim Scott

Republican chairs of the Senate Banking Committee have followed a reliable pattern over the last decade. The next one will be different.

With just weeks before Sen. Tim Scott (R-S.C.) ascends to the chairmanship, we’ve detected real uncertainty from industry about this incoming committee head. Washington and Wall Street alike have questions about how Scott will approach the job.

We’ve covered Scott’s leadership on the banking committee for two years. And after speaking to several former staffers, lobbyists and industry professionals, we have some answers.

Generational shift: The last three Republicans to chair the Senate Banking Committee have been policy-obsessive wonks with firm opinions on financial policy. Scott does not fit that mold, and his approach to this work will be different.

Scott has said he’ll champion significant changes in the federal housing system, expand “opportunity zones,” help the crypto industry and reshape capital formation.

But former staff, lobbyists and lawmakers say Scott is not a hard-and-fast ideologue. He’s collaborative and flexible, particularly when it comes to other Republicans.

Several committee watchers told us that Scott goes out of his way to elicit feedback from Banking peers. Sen. Thom Tillis (R-N.C.) agreed. “He’s true to his word. He’s coming in there, looking for advice,” he said. Expect subcommittee chairs to play a more prominent role in the 119th Congress.

Politics as policy: One of Scott’s greater strengths lies in electoral politics. That will affect the committee in more ways than one.

Scott seems to love running for office. It’s a habit formed by Scott’s years in state politics, then in the House and — following his 2013 appointment to the Senate — statewide campaigns in 2014, 2016 and 2022. Scott also spent much of the 118th Congress running for president and vice president.

Scott will also chair the NRSC next year. That’s a hefty gig that involves a lot of meetings and travel. Many lobbyists worry that NRSC duties will take up more of Scott’s focus from banking affairs than running for president did.

But Scott’s approach is coming into focus. We expect the South Carolina lawmaker to use both roles more or less in tandem.

Take fundraising lunches with bankers. Since mid-November, we’ve heard three accounts of Scott discussing his banking agenda at a high level before pivoting abruptly into his NRSC pitch and needing industry support in 2026. Two of those accounts described some industry participants as “disappointed” by the lack of specifics in Scott’s spiel. Then again, it is a fundraising lunch!

Scott, in a statement, told us that the “Banking Committee and the NRSC have the same goal: to advance a pro-growth agenda that will improve the lives of hardworking Americans.”

Scott has sometimes been described as “policy lite” by lobbyists. But folks in his orbit say that description — not usually a compliment — misses a larger point about how he approaches this job.

Scott thinks about policy as a means of reaching folks politically, rather than using politics to achieve certain kinds of policy. “Main Street” isn’t a rhetorical device for Scott — it’s the target audience for just about anything the senator espouses. The messaging of policy is as important as the policy itself. Scott has often said that without politics, he would have been a preacher.

Art of the possible: Scott’s tenure will face real challenges. Start with his counterpart. Sen. Elizabeth Warren (D-Mass.) is a formidable progressive who excels at messaging and is in charge of an extensive political network. “I am very hopeful that we can work together,” Warren said.

Warren — as well as Sen. Mark Warner (D-Va.), a centrist on the panel — both identified housing as an area where they could work with Scott. “Housing, housing, housing,” Warner said, adding that he’d like to work with Scott on capital formation and opportunity zones too.

It won’t be easy. The Senate Banking Committee has developed a reputation for dysfunction over the last decade, though that could be attributed to broader congressional problems.

One near-term challenge for Scott is staffing. Three of his four most senior staff on the committee have departed for the private sector in the last six months, including policy director Catherine Fuchs, chief counsel and deputy staff director Amber Beck and communications director Ryann DuRant.

Last week, we asked Sen. Sherrod Brown (D-Ohio) — who hasn’t ruled out another run for Senate in 2026 — what it was like to work with Scott on the banking panel. The Ohio Progressive declined to comment, saying: “I don’t really have an opinion I want to share.”

— Brendan Pedersen

WHO’S UP, WHO’S DOWN

The Vault Power Matrix

— Laura Weiss and Brendan Pedersen

GOP TAKEOVER

The House GOP bellwethers to watch in the reconciliation rumble

There’s nothing like not being able to lose a single vote in the House to get your blood pressure up! At least, if you’re a Republican who wants a tax bill on President-elect Donald Trump’s desk ASAP. (Democrats, we’re sure you’re settling in with some popcorn on this one.)

So who are the key House Republicans to watch if you’re tracking whether the GOP’s tax push is running into trouble? Here’s who we’ve got our eyes on as the bellwethers for how well Republicans are navigating potential pitfalls with a 217-215 margin looming early next year.

SALTy members: The first person to talk to if you’re figuring out how hard New Yorkers will fight for a bigger state and local tax deduction is Rep. Mike Lawler. There are other SALT proponents who are ready to brawl to get the GOP to loosen the $10,000 SALT cap, which expires with most of the other Trump tax cuts next year.

But Lawler is flirting with a governor run. Angling for statewide office has a way of making lawmakers loud and hard to wrangle.

The deficit hawks: There are a whole lot of Republicans who like to scream about the ever-climbing U.S. debt. But many of them will get a whole lot quieter next year with a Republican in the White House. (Remember: Trump is no deficit hawk.)

But deficit concerns are still a dynamic that key House members and aides are watching closely. Keep an eye on Republicans like Reps. Chip Roy (Texas), Thomas Massie (Ky.) and Tom McClintock (Calif.) to see how much pressure there will be on leaders to pay for at least some of the tax bill’s cost.

The ag allies: Democrats’ signature policy achievement under President Joe Biden, the Inflation Reduction Act, is on the chopping block. Republicans want to claw back spending in the law and scrap some of its tax credits for investments in clean energy. But they’re aware the party will need to tread carefully.

Members representing big agricultural regions are going to get antsy on anything that targets energy programs that involve crops — like biofuels. Think about vulnerable Republicans such as Reps. Don Bacon of Nebraska and Mariannette Miller-Meeks of Iowa. Both squeaked by this November, but they’re likely to face tough reelections again in two years.

Ag types will also get nervous about talk of putting tariffs into a tax bill.

The coalition that’s going to get picky about which clean energy tax credits get rolled back is bigger than farm state lawmakers. So, taking a swipe at this key part of the IRA will be a jigsaw puzzle for GOP leaders to put together.

– Laura Weiss