Trump Tax Bill Hits Senate as GOP Torn by Competing Demands

Senate Majority Leader John Thune is rushing to meet President Donald Trump’s July 4 deadline for pushing through his massive tax and spending bill, but first he has to work through a list of approximately eight Republican senators who have expressed opposition to portions of it.

Within the next two days, he needs to find a way to appease most of them. The Senate will kick off a marathon voting session on dozens of amendments Monday morning, a process that can take 12 hours or more, and Thune will be working behind the scenes to quell their concerns.

Ashley Davis joins Balance of Power to report on Trump's Tax Bill reaching the senate.

The South Dakota Republican has one of the least enviable jobs in Washington in the coming hours — trying to knit a compromise between factions of his party: one side pushing for more spending cuts in the legislation and senators who are threatening to withhold their support unless there is more funding for health benefits, renewable energy subsidies and other priorities.

Thune can afford to lose only three of his 53 members in the chamber, with Vice President JD Vance breaking the tie.

While markets have been more focused on the administration’s separate trade talks ahead of a July 9 deadline, the tax bill’s progress — and its estimated $3.3 trillion cost — has been closely monitored. A gauge of the dollar dipped 0.3% as negotiations continued. The Bloomberg Dollar Spot Index has posted its worst start to a year since at least 2005.

Renewable energy stocks including Vestas Wind Systems A/S and Orsted AS dropped Monday on concerns the latest bill would phase out key tax incentives for wind and solar projects more aggressively. Vestas shares fell as much as 6.7% in early trading, the steepest decliner in the Stoxx Europe 600 index. Citigroup Inc. analyst Martin Wilkie said the latest text of the Senate bill looks “incrementally negative for wind.”

Trump is also closely watching the tax talks, and has been quick to issue a harsh social media broadside against anyone who criticizes his signature legislation.

Just ask North Carolina Senator Thom Tillis, one of two Republicans who voted against a late-night Saturday procedural vote to begin debate on the legislation.

Trump unleashed a series of scathing posts, threatening to primary Tillis. The president took personal swipes, calling him a “talker and complainer, NOT A DOER!” before also getting in a jab at Rand Paul, the other GOP senator to oppose the vote to advance the bill.

Tillis on Sunday announced he wouldn’t be running for reelection, a decision that unshackles him from any need to show fidelity to Trump to preserve his political career. The 64-year-old senator indicated that he’ll likely oppose the bill.

Paul has said he is also likely to vote “no” on the legislation based on the price tag and the inclusion of a $5 trillion debt ceiling increase. If both Tillis and Paul remain in opposition, Thune can only lose one more.

Polls show that Americans are wary of the bill. A recent Pew Research survey found that 49% of Americans oppose the bill, while 29% supported it. Some 21% weren’t sure what to think.

Republicans in Congress broadly back the $4.5 trillion worth of tax cuts in the package, which extend the 2017 tax cuts and create new breaks for tipped and hourly workers, along with seniors and car buyers. But the $1.2 trillion worth of spending cuts have created numerous problems.

Moderates including Tillis, Susan Collins of Maine and Lisa Murkowski of Alaska are pushing to scale back cuts to Medicaid benefits, warning that those reductions could come at a great political cost if millions of Americans lose health coverage as a result of the bill.

Some 11.8 million people could lose access to insurance benefits over the course of a decade, according to the Congressional Budget Office’s most recent estimate.

--------

Watch Bloomberg Radio LIVE on YouTube

Weekdays 7am-6pm ET

Follow us on X

Subscribe to our Podcasts:

Bloomberg Daybreak

Bloomberg Surveillance

Bloomberg Intelligence

Balance of Power

Bloomberg Businessweek

Listen on Apple CarPlay and Android Auto with the Bloomberg Business app:

Apple CarPlay

Android Auto

Visit our YouTube channels:

Bloomberg Podcasts

Bloomberg Television

Bloomberg Originals