📝 The Readback: Reconciliation madness

IN THIS EDITION

Republicans racing through reconciliation

Reporting in the DC heat

A chat with a CEO

Mad about broken elevators and escalators

THE TOP

Republicans racing through reconciliation

Welcome to The Readback, our weekend digest featuring the best of Punchbowl News this week – a quick roundup of all our scoops, analysis and Capitol Hill insight you won’t find anywhere else. We’ve also included a few of our favorite outside reads from the week.

Republicans are in the middle of a whirlwind rush to get their reconciliation bill to President Donald Trump’s desk by July 4.

At every turn, GOP leaders have drawn on the power of deadlines to force the legislation carrying Trump’s legislative agenda another step forward. Now we’ll see if they can pass the final test.

But first, let’s recap. There was a ton of news this week on two crucial fronts as Republican leaders push to close out the key sticking points on their bill in both the Senate and House.

Medicaid: One of the biggest questions going into this week was what Senate GOP leaders would do to try to win over moderates up in arms over their steep provider tax crackdown.

But the situation only blew up when senators got to town on Monday night. My colleague (and fellow Philadelphia Eagles fan!) Andrew Desiderio scooped that Sen. Thom Tillis (R-N.C.) railed against the Medicaid cuts during a private meeting and even handed out a flier to emphasize his point. Some senators who hadn’t slammed the text publicly began airing concerns privately.

Amid all the uproar, Senate GOP leaders worked toward a fix. The Senate Finance Committee began circulating a plan on Wednesday for a $15 billion fund providing relief for rural hospitals that could see painful cuts under the Medicaid plan.

But moderate holdouts weren’t satisfied with that number. By late Thursday, we heard they were homing in on another change — delaying the deeper Medicaid cuts in the bill so they set in later. Senate Republican leaders also started looking at putting more money toward the rural hospital fund.

The twists and turns weren’t over yet. Then, the Senate parliamentarian ruled against the provider tax language, which means it doesn’t meet reconciliation rules. Republicans can’t afford to lose the spending cuts and keep conservatives in line.

So Senate Republicans had to go back to the parliamentarian with new language, as they kept working on political fixes, too.

The series of hurdles that came up for Republicans this week only underscored the harsh realities of reconciliation in the Senate.

Reconciliation is an attractive tool when a party wins a trifecta in Washington — controlling the Senate, House and White House — because it removes the one barrier to the majority’s will, the Senate filibuster. But to get that benefit, the Senate has to meet a strict and obscure set of rules.

SALT: The other big dealmaking this week was over the state-and-local-tax deduction.

SALT has been one of the most divisive and raucous issues for Republicans in the reconciliation process. Seven House Republicans from New York, California and New Jersey are demanding a cap higher than the current $10,000 deduction limit, which crushes their districts. But most of the GOP represents low-tax areas that aren’t impacted much by the cap.

GOP senators were threatening to jam the House with a much lower SALT cap, putting a $10,000 limit in their bill to make the point that the blue-state crew would have to negotiate. The SALT backers vowed not to, but this week they gave in and negotiated.

We broke the news that SALT Caucus members were meeting with Treasury Secretary Scott Bessent on Wednesday morning.

The talks quickly hit a feverish pace and most of the SALT backers got quiet, a perennial sign a deal is close.

Almost all the SALT members then struck a deal on Friday with Treasury and the White House to keep the House’s $40,000 SALT cap for five years, then revert to a $10,000 limit. They also agreed to drop a crackdown on SALT cap workarounds. We brought you all the details here.

Nothing’s final until it’s final. But SALT made a huge leap this week. Ultimately, most of the SALT backers caved on permanence and took a short-term cap increase.

The politics. Both Medicaid and SALT are big issues for the reconciliation bill itself. But when it’s over, we’ll be watching how the political dust settles too.

The provider tax crackdown is a tough pill to swallow for many of the most vulnerable Republicans up for reelection next year. Democrats will make Medicaid cuts a fixture of their midterm campaigns.

SALT is essential for blue-state Republicans back home, and they know it. Rep. Nick LaLota (R-N.Y.) broke with his colleagues and is opposing the latest deal on the cap. That will vex his fellow New Yorkers.

“We’ve bitched and moaned about $10K,” LaLota said. “How in the world can somebody like me vote for the very thing I’ve been bitching about for three years?”

What I’m watching: I’ve been watching Love Island USA in the background when I can. I’m late to the season but in time for Casa Amor!

– Laura Weiss

You can find The Readback in your inbox every Saturday at 8 a.m. And don’t hesitate to reach out to [email protected] with feedback. Enjoy The Readback.

Reporting in the DC heat

I’ll tell you a secret: My biggest concern about taking this job was wearing formal clothes when it’s hot.

I generally feel a little warm just at room temperature, and adding a tie and jacket to that gives me the ick.

So, this week was pretty much a worst-case-scenario for me. All last weekend, as I watched the forecast flirt with three digits, I just kept repeating to myself that “at least I wouldn’t have to work outside.”

Then, Monday morning I looked at my calendar. Scheduled for 3 p.m. was a remembrance event for kids and teens whose deaths were linked to social media usage.

It was outside. It had lawmakers speaking. And I was in the midst of writing an update on kids online safety bills that would otherwise be bereft of news or voices. (That story, by the way, was part of our quarterly edition, which you should check out to catch up on those kids bills, spectrum and the man shaping artificial intelligence policy.)

Out I went. I did strip off the jacket, but at 98 degrees, it hardly helped. The air was the kind of humid that feels too thick to breathe. I wriggled against my sweaty collar, trying to shrink from my own clothing.

Up first was Sen. Amy Klobuchar (D-Minn.), who launched her 2020 presidential bid in the opposite weather — a snowstorm.

“No matter the weather, no matter what’s going on, you guys are going to show up,” Klobuchar said as she thanked parents and advocates who sat by photos of the young people who had died.

Sen. Richard Blumenthal (D-Conn.) was there too, also without his jacket. He stayed the whole 45 minutes, mostly just watching from the sidelines alongside some very wilted-looking aides.

But it was Sen. Marsha Blackburn (R-Tenn.) who made my brutal reporting trip worth it.

“You are experiencing why they call D.C. ‘The Swamp,’” she said to giggles from audience members crammed into the few shadier seats.

Then Blackburn said she’d met that day with House Energy and Commerce Committee Chair Brett Guthrie (R-Ky.) about a bill I’d been following. That was all I needed.

Later on, inside the relative cool of the Capitol, I asked Guthrie what they’d talked about. He told me what timing he was aiming for.

Suddenly my item was at least a little newsy, and by then, I’d finally managed to cool down.

What I’m watching: “Jaws” is one of my favorite movies of all time, and I haven’t rewatched it yet for its 50th anniversary. I wouldn’t mind having a “panic on our hands on the Fourth of July.”

– Ben Brody

A chat with a CEO

It’s not every day that we get to talk to a Fortune 500 CEO.

We’re used to talking to power players in government but less often to leaders in the private sector.

So it was great to have a chance to chat with AT&T CEO John Stankey at the Punchbowl News world headquarters last week. My fellow tech reporter, Ben Brody, and our intrepid editor, Dave Clarke, joined me for the conversation with Stankey.

Stankey was very attuned to the issues dominating Washington despite being based thousands of miles away in Dallas. He told us how he’s been working with the administration to push for his priorities in tax, spectrum policy and more.

Frankly, it caught us by surprise both how personally he’s been involved with these issues and how aware he is of wonky Washington topics like the reconciliation bill.

But talking to Stankey was also an opportunity to further examine some of his company’s priorities.

AT&T, like the other two major wireless carriers, Verizon and T-Mobile, has been lobbying Congress hard for more spectrum auctions so they can boost 5G service. Republicans are about to deliver on that, as we’ve written extensively.

But AT&T’s CFO Pascal Desroches recently said the company had no “pressing need” for spectrum for the next 36 months.

Stankey told us something similar.

“When I’m lobbying for spectrum, I’m lobbying for my successor,” Stankey said.

So why make the big push now? Opponents to increasing the amount of exclusive spectrum have been bringing up the fact that carriers have plenty of spectrum.

Their big sell for the spectrum provision in reconciliation has been that it’ll boost 5G service in America.

“So if you’re a consumer, you’re not going to necessarily feel the effects of freeing up the spectrum for another four or five years?” Clarke asked Stankey.

Stankey gave us a long response. The gist of it was that if Congress doesn’t authorize more auctions, consumers will feel pain with less service capacity, particularly as demand skyrockets with AI. Carriers might have to raise their prices as they ration their spectrum, too.

It also poses a national security threat if one of the three carriers is taken out in a cyber attack and the other two don’t have enough spectrum to handle the loss, Stankey said.

Republicans and the wireless industry are making a big deal out of this new spectrum pipeline coming with their reconciliation package. We’ll all keep an eye on the telecom world and see what comes of these fresh new airwaves in the market.

What I’m watching: It’s been a long week on Capitol Hill as the reconciliation drama unfolds, leaving little time for much else. But I’m excited about going to watch the F1 movie this weekend.

I’ve always been a big motorsports fan, and watching fast cars on the big screen sounds pretty fun. Maybe theaters should even think about showing a race or two sometimes!

– Diego Areas Munhoz

Mad about broken elevators and escalators

Interning on the Hill has been a surreal experience so far. There’s so much going on every day that you can’t possibly be bored. You’re rubbing shoulders with top lawmakers (crazy!). What I didn’t expect was that members of Congress would actually relate to me.

On a weekly — or almost daily, if you ask some — basis, either an elevator or escalator is down. RIP to the elevator right next to the Periodical Press Gallery, which makes it hard to get around quickly. And as a reporter who gets lost easily, having go-to routes is key. So, when they’re disrupted by out-of-order elevators or dysfunctional escalators, things can get a little tricky.

When I went to a House Appropriations Legislative Branch subcommittee hearing on the oversight of the Architect of the Capitol earlier this week, the last thing I expected was for lawmakers to gripe about the escalators and elevators, let alone share in my daily frustrations.

“It seems that you’re lucky if you get an escalator that is either going up or going down,” Rep. Barry Loudermilk (R-Ga.) said at the hearing. “I feel like I’m at a casino with every corner I turn to find a working elevator.

Rep. Norma Torres (D-Calif.) wasn’t happy either.

“Beyond security, what other essential AOC work will suffer? Will elevators fail more frequently?” Torres said.

God, I hope not, Congresswoman. I’m just figuring out my routes to the different buildings.

While Architect of the Capitol Thomas Austin highlighted a plan to fix the elevators and escalators around the House office buildings, lawmakers at the hearing didn’t seem too convinced. In particular, they questioned how much of the budget was being spent to maintain the escalators and elevators.

“If we’re spending more money fixing them, let’s just do a flash dance in August and fix ‘em all,” Rep. Greg Murphy (R-N.C.) said. “We don’t need to be spending money when we should be just investing in fixing it.”

While lawmakers are concerned about the way the money is being spent, I’m more worried about when that elevator next to the Periodical Press Gallery is going to be working again. So, Thomas Austin, if you’re reading this, please fix that elevator first. Sincerely, a very directionally challenged intern.

What I’m reading: For a little break from reality, I’m reading V.E. Schwab’s latest book, “Bury Our Bones in the Midnight Soil.” It’s a great time travel fantasy novel that is exactly the type of fun reading everyone needs for a little reprieve.

– Kenzie Nguyen