Vice President JD Vance pleaded with Senate Republicans on Tuesday to finish their work on President Donald Trump’s tax agenda before July 4. Vance said Trump wants the bill ready for his signature by the August recess.
Republicans have a lot working against them to meet that deadline.
First, Senate Republicans need to race through time-consuming reconciliation procedures that could throw a wrench into their plans. Behind the scenes, they’ll need to hash out all the complicated political challenges plaguing the bill. And they don’t have much room to lose votes in either chamber.
The Byrd Bath. The main procedural hurdle for Senate Republicans to clear is wrapping up the “Byrd Bath.” That’s when Democratic and GOP aides each argue their case to the Senate parliamentarian about whether provisions in the bill adhere to the chamber’s Byrd Rule, which governs the reconciliation process.
It’s Democrats’ big moment to try to force some policies out of the bill by arguing they violate the Byrd Rule. If Democrats succeed on major provisions, that could make things even harder for Senate Republican leaders as they struggle over their vote and deficit math.
The Senate Finance Committee’s text came out last so it’ll be the final panel to go through the process. Finance’s Byrd Bath is likely to start later this week and could extend into next week. Parliamentarian rulings on the committee’s text could still be rolling in around the middle of next week.
Here are some pieces of Republicans’ bill we expect Democrats to challenge:
— The current policy baseline. Senate Republicans previously side-stepped a ruling on the accounting tactic, but Democrats aren’t done fighting over its viability.
— Gun and silencer provisions in Finance’s text. In addition to cutting taxes on certain guns and suppressors, aka silencers, the bill eases licensing and registration requirements too.
— Social Security number requirements for tax benefits under Finance, which aim to exclude undocumented immigrants. On the child tax credit, a new provision would require at least one parent to have a work-eligible SSN in addition to their child.
— The Senate Commerce Committee’s language requiring states not to regulate AI if they want federal broadband funds. Some Senate Republicans already oppose this, including Sens. Josh Hawley (R-Mo.) and Marsha Blackburn (R-Tenn.).
— The Senate Judiciary Committee’s new limits on judges’ power to issue preliminary injunctions against the executive branch.
Senate problems. The Senate GOP leadership is lobbying groups of Republican holdouts to try to build a 51-vote coalition for the bill. Senate Majority Leader John Thune and Majority Whip John Barrasso met on Tuesday with conservatives pushing for steeper spending cuts.
That’s one group that Republican leaders will need to get on board. But the problem is that the deeper spending cuts conservatives are seeking could further alienate GOP moderates, particularly on Medicaid.
Several GOP senators, including Hawley, Lisa Murkowski (Alaska) and Jim Justice (W.Va.), are already raising concerns that Medicaid cuts in the Senate bill go too far.
“I’ve got major concerns, that’s all there is to it,” Justice said. The freshman GOP senator wants to go back to the House language on provider taxes in order to help rural hospitals. “It’s an aggressive timeline, that’s for sure.”
Vance’s message to Republicans on Tuesday seemed to be tailored to conservatives seeking more spending cuts. Here’s how Sen. Kevin Cramer (R-N.D.) described Vance’s plea at Republicans’ closed-door lunch:
“This bill is as close to perfect as you can make it in the current situation. And we need it to pass because it’s better than not passing it.”
We’ve heard this a lot from Senate Republican leaders — that failure can’t be an option because the consequences are simply too dire. That includes being forced to negotiate with Democrats on the debt limit and the expiration of the 2017 Trump tax cuts at the end of this year.
Senate GOP leaders are banking on the pressure getting to the GOP holdouts at the later stages of the reconciliation debate. That clearly hasn’t happened yet.
House negotiations. If Senate Republicans don’t work out problems with the House now, they risk delaying the bill even further.
GOP senators are well aware that they have a big problem when it comes to SALT. They don’t want to spend the money on SALT relief that a handful of blue-state House Republicans are demanding. But the SALT backers insist they’ll hold the line and bring down the reconciliation package if necessary.
To work out the SALT impasse and other House concerns, there will have to be a lot of negotiating. And fast.
