This Week in Congress

This week, Senate Republicans began working on their version of the budget reconciliation bill. While changes are expected, the extent is unclear, and the slim House majority's reaction remains uncertain, as both chambers must pass the same final bill. The House bill's quadrupled cap on state and local tax deductions, agreed upon by leadership to secure support from House Republicans in high-tax states, may be problematic since no Senate Republicans represent the affected blue states. Additionally, Senate Republicans hold differing views on handling clean energy tax credits from the 2022 climate law. In April, four Senate Republicans opposed a full-scale repeal of the credits, while Senate Energy and Natural Resources Chair Mike Lee (R-UT), advocated for their complete repeal. The House bill temporarily retained some clean energy credits, but accelerated their phase-out due to Republican holdouts.

The House-passed legislation by a vote of 215-214-1 is headed for a showdown with the Senate parliamentarian, as Democrats plan to challenge key elements of it, including a proposal to make President Trump’s expiring 2017 tax cuts permanent. Reps. Massie (R-KY) and Davidson (R-OH) joined all Democrats in voting no, while House Freedom Caucus Chairman Harris (R-MD) voted present and Reps. Garbarino (R-NY) and Schweikert (R-AZ) did not vote.  Senate Democrats warn that if Senate Majority Leader Thune (R-SD) bypasses the parliamentarian to make President Trump’s tax cuts permanent, it would undermine the filibuster and open the door to future changes to Senate rules by Democrats. Senate Republicans argue that the decision lies with Senate Budget Committee Chair Graham (R-SC) to set the budgetary baseline for the bill, not the parliamentarian, who determines whether extending the 2017 Trump tax cuts should be scored as adding to the deficit.

Speaker Johnson is defending the House-passed version of the “big, beautiful bill.” The Speaker has gone on a cable news blitz, countering concerns of Sens. Paul (R-KY) and Johnson (R-WI) about the bill's deficit impact, disputing the nonpartisan Congressional Budget Office’s scoring, and arguing that the benefits outweigh its shortcomings. Johnson stated that this is not the only reconciliation bill, with another to follow. The bill is now in the Senate, where Republicans plan changes that may erode House Republican support. Johnson has urged minimal alterations to maintain support. The President met with Majority Leader Thune and called Sens. Johnson (R-WI) and Hawley (R-MO), who have reservations about the House-passed package. Thune hopes to pass a bill through the Senate, send it back to the House, and have it on the president's desk by the Fourth of July. Committees are meeting and conversations will continue this week and next.

Senator Schumer sent a Dear Colleague letter to Senate Democrats about the reconciliation bill, outlining the fight ahead to protect American families from the catastrophic impacts of "One Ugly Bill." He described the bill as one of the most destructive and shamelessly self-serving pieces of legislation in modern American history. Schumer vowed that Senate Democrats would enlist American families to oppose the bill's massive cuts designed to fund billionaire tax cuts.

Finally, the House voted on legislation that would restrict Small Business Administration (SBA) loans based on immigration status, close SBA offices in “sanctuary” cities, and limit the number of certified small business lending companies.