Senate Majority Leader John Thune has some “big beautiful” conflicts to resolve — and fast — if he wants to pass his party’s tax-and-spending package next week as planned.
Here’s a look at the biggest fires Thune needs to put out to meet his deadline, some of which are newly raging following Senate Finance’s release of long-awaited bill text:
MEDICAID JITTERS — “Medicaid moderates” are reeling after Republicans on the key committee proposed lowering the provider tax, from 6 percent to 3.5 percent by 2031 for states that have expanded Medicaid offerings under the Affordable Care Act. Several states rely heavily on this tax to help fund their Medicaid programs.
Republicans, including Sen. Josh Hawley (Mo.), were already rebelling against the House-passed megabill’s move to find savings by freezing the provider tax. Now, Hawley is saying he’s “alarmed” that Senate Finance would go even further and that the plan “needs work.”
“I don’t know why we would defund rural hospitals in order to pay for Chinese solar panels,” he told reporters Monday evening, in a nod to Senate Republicans’ plan to ease some of the House GOP’s deep cuts to clean-energy tax credits (more on that below).
Sen. Susan Collins (R-Maine) also expressed concern about the provider-tax change, though she declined to elaborate as she left the closed-door meeting Monday night where Finance Chair Mike Crapo (R-Idaho) was briefing GOP senators on his proposal. But Sen. Rick Scott (R-Fla.) said he doesn’t think the plan would go far enough in slashing spending on the safety-net program, suggesting senators should reconsider including a provision that would scale back the federal government’s share of paying for states’ Medicaid expansion.
Expect this to be a topic of discussion when GOP senators meet with CMS Administrator Mehmet Oz on Tuesday during the conference’s weekly lunch.
HOLD THE SALT — Blue-state House Republicans are seething as senators continue to haggle down their state-and-local-tax deduction cap. GOP senators included the current $10,000 deduction limit — rather than the $40,000 the House passed — as a placeholder in the draft bill text Senate Finance released Monday, giving space for talks to continue.
Rep. Mike Lawler (R-N.Y.) declared the Senate’s proposal “dead on arrival” in the House. But Sen. Markwayne Mullin (R-Okla.), who’s been backchanneling with SALT Republicans including Lawler, insisted to reporters that the deduction is “fully open for negotiating.” Thune also told reporters Monday that senators are “prepared to have discussions” amongst themselves to “figure out a landing spot.”
LESS GUTTING FOR GREEN CREDITS — Senate Republicans are extending some of the House’s aggressive phase-out dates for credits benefitting “baseload” energy technologies like nuclear, geothermal and hydropower, leaving one GOP proponent of the incentives, Sen. Thom Tillis (R-N.C.), “generally satisfied.” They are still making significant cuts to solar, wind and electric vehicle incentives in Democrats’ 2022 climate law, but that’s not going to satisfy conservatives who want a full repeal of what they call the “Green New Scam.”
House Freedom Caucus members, who pushed for deep cuts to the green credits in order to get behind the megabill in their chamber last month, could fight the Senate’s slower roll. One member, Rep. Chip Roy (R-Texas), declared on X he “will not vote for this.”
Dive deeper into the long list of other Senate Finance megabill changes.
What else we’re watching:
— Lawmaker safety after Minnesota shootings: Senators have a classified security briefing with the chamber’s sergeant at arms and Capitol Police this morning, where the question of resources for lawmaker safety could come up. Across the Capitol, House Minority Leader Hakeem Jeffries is asking Speaker Mike Johnson to increase funding for members’ security as more elected officials learn they were potential targets of the man suspected of the shootings in Minnesota.
— Senate’s first major crypto overhaul: The Senate is set this afternoon to pass landmark cryptocurrency legislation, one of Trump’s biggest policy priorities outside the megabill. The bipartisan bill would create a regulatory framework for digital tokens known as stablecoins that are pegged to the value of the dollar. But the legislation faces a murky future in the House.
— Gabbard, Ratcliffe on the Hill: Director of National Intelligence Tulsi Gabbard, CIA Director John Ratcliffe and NSA acting Director Lt. Gen. William Hartman will testify on behalf of the president’s fiscal 2026 budget request for intelligence during a closed Appropriations subcommittee hearing.
Jordain Carney, Brian Faler and Jasper Goodman contributed to this report.
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