The debate surrounding Senate Majority Leader John Thune (R-S.D.) and fellow Senate negotiators is intensifying as they strive to pass legislation that aligns with President Trump’s agenda by July 4th.
While some Republican senators have expressed concerns to their leadership regarding proposed spending cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), budget hawks are demanding further deficit reduction and restrictions on compromises that would increase the limits on state and local tax (SALT) deductions.
Thune and his Senate counterparts are currently facing a complication from a proposal advocated by fiscal conservatives aimed at eliminating over $200 billion in what they describe as waste, fraud, and abuse within Medicare.
Disagreements also exist between Senate members and the Trump administration regarding the permanence of corporate tax cuts, particularly the 100% bonus depreciation for short-term investments and immediate expenses related to research and development.
With 53 seats at their disposal, Senate Republicans can only afford to lose three votes on Trump’s “big and beautiful bill.”
Senator Rand Paul (R-Ky.) has announced he will vote “no” due to provisions that would increase the debt limit by $4 trillion. Additionally, Senator Ron Johnson (R-Wis.) stated he is a firm “no” on any bill that would not restore spending to pre-pandemic levels.
Key issues that could jeopardize the Senate bill include:
Medicaid
Senators Susan Collins (R-Maine), Lisa Murkowski (R-Alaska), Jerry Moran (R-Kan.), and Josh Hawley (R-Mo.) have expressed concerns about reduced Medicaid benefits and indicated they might oppose the bill if the Senate Finance Committee does not address these concerns.
Despite claims from Senate and House GOP leaders that the legislation will not cut Medicaid benefits, a report from the Congressional Budget Office released Wednesday indicates that 10.9 million Americans may lose health insurance if the bill passes due to changes in Medicaid and Affordable Care Act coverage.
“I hope it doesn’t lead to cuts; that’s my bottom line,” Hawley remarked Thursday afternoon.
The GOP senator expressed worry over a proposal restricting the collection of additional Medicaid funds via state health care provider taxes, suggesting that individuals earning between 100% and 138% of the federal poverty level could face high co-payments for health services.
SNAP
Several Senate Republicans, including Collins and Moran, have raised alarms about proposed cuts to SNAP amounting to $267 billion.
The Senate Agriculture Committee anticipates unveiling a draft of the budget settlement bill next week, but committee chair John Boozman (R-ARK) indicated that the issue remains unresolved.
“We’re still working on that,” Boozman told Hill, adding, “I wish it were.”
Collins has voiced concerns over the bill’s language that would transition much of the program’s administrative burden to states and penalize those with outdated systems for tracking profits.
Deficit Reduction
Some Republicans, including Senator Ron Johnson (R-Wis.), are advocating for more stringent budget cuts, calling for reductions of approximately $1.6 trillion over the next decade.
GOP senators, including Senator Lindsey Graham (R-S.C.), who chairs the Budget Committee, are pushing for even greater cuts.
“I think the bill needs to be more fiscally responsible,” he commented to reporters on Thursday afternoon.
At present, certain Republicans are exploring proposals to address “waste, fraud, and abuse” within the Medicare Advantage program, coalescing around initiatives proposed by Senator Bill Cassidy (R-La.) to reform insurance company diagnosis coding and secure Medicare rebates.
However, this idea is causing divisions among GOP senators.
Hawley criticized the proposed Medicare cuts, labeling them as “crazy,” despite support from Cassidy’s bill aimed at targeting waste, fraud, and abuse. Notably, Democrats such as Senator Jeff Merkley (D-Ore.) and Alexandria Ocasio-Cortez (D-N.Y.) have also deemed Medicare cuts as “crazy.”
Spectrum Auction
Members of the Senate Armed Services Committee, including Mike Rounds (R-S.D.) and Deb Fischer (R-Neb.), are scrutinizing provisions in the home-passed bills concerning government-owned spectrum auctions.
Rounds stated that the language from the House is a “deal breaker” and urged negotiators to add protections for the spectrum utilized by the Pentagon during the auction period.
“We need to fix that,” he said. “They must guarantee protection of the spectrum for defense. The protection should last at least until the first round of auctions concludes,” he emphasized.
Regulating AI in Restricted States
A recent contentious issue within negotiations centers around provisions preventing states from regulating artificial intelligence for ten years.
Representative Marjorie Taylor Greene (R-Ga.) mentioned she would oppose the House bill if it restricted state authority to legislate or regulate AI for that duration.
Other conservatives have flagged this provision as a significant concern.
“I worry for everyday citizens who want to keep working and safeguard their personal information. So for 10 years, no one can ensure that people are protected,” she stated.
Permanent Corporate Tax Deductions
Senate Republicans and officials from the Trump White House are at odds over the idea of making corporate tax credits, such as bonus depreciation and R&D expenditures, permanent.
The House bill proposes gradually phasing out some of the most favored corporate tax cuts by 2029, with White House officials believing this will work in their favor as these expirations occur after Trump’s term, according to GOP senators familiar with the negotiations.
Senators on the Senate Finance Committee will present their case to Trump and his economic team on Thursday to advocate for the permanence of these tax provisions, but significant differences remain.
Senator Roger Marshall (R-Kan.) expressed uncertainty on whether they made any progress, noting, “I’m not sure we moved the needle. He certainly understands how important this is to us and I believe he will revisit it with his team.”
State and Local Tax (SALT) Deduction
Republican senators plan to revise the SALT deal brokered by Speaker Mike Johnson (R-La.), which has drawn criticism from representatives in high-cost states like New York and New Jersey.
The SALT provision in the House bill is projected to cost $350 billion over a decade, raising discontent among Republican senators.
Many GOP senators believe the cap could be adjusted, decreasing it between $10,000 and $40,000 or finding alternative methods to substantially lower the cost of these provisions while still passing the bill through the House.
“That’s too pricey,” stated Senator James Lankford (R-Okla.) regarding the $40,000 SALT deduction cap.
Senator Mike Lee (R-Utah) has been promoting a compromise on the SALT deductions, arguing that it unfairly benefits states that impose high taxes.
“We’re subsidizing states that levy high taxes,” he remarked.
Lee indicated that “the overwhelming majority of Republican senators” do not agree with the $40,000 cap limit.
“There’s considerable support for setting it lower, likely back to $10,000,” Lee noted.
Speaker Mike Johnson (R-La.) cautioned that if Senate Republicans undermine the SALT provision, they risk jeopardizing the bill’s overall passage. Any amendments made in the Senate would require the bill to return to the House before reaching Trump’s desk.
Source: thehill.com