Republicans are running into a major issue as they try to finalize their sweeping domestic-policy bill: arithmetic.
With just days until Senate GOP leaders want to start voting, they have been hit with a mathematical double-whammy: Tax writers are proposing a package that’s hundreds of billions of dollars more costly than what House Republicans have proposed, while senators struggle to finalize a larger package of spending cuts to offset it.
As deadline pressure from President Donald Trump intensifies — he reiterated Tuesday he wants the bill done by July 4 — Senate Majority Leader John Thune and GOP colleagues appear ready to call one of Capitol Hill’s best-known plays: daring fiscal hawks to stand in the way of Trump’s top legislative priority.
“When the House … is confronted with a binary decision of yes or no,” Sen. Kevin Cramer of North Dakota said Tuesday, “yes is going to be a better answer than no.”
But an array of House Republicans is making clear the our-way-or-the-highway approach could be a recipe for division and delay — including from members of the House Freedom Caucus and other conservatives who have long warned they will not swallow a Senate product that adds further to the national debt.
“They got a problem,” said Rep. Ralph Norman (R-S.C.), a Freedom Caucus member. “The conservatives have got a real problem if it’s not doing what we thought we had in the House.”
That mismatch was underscored by a new nonpartisan analysis released Monday night from the Joint Committee on Taxation, which found that the Senate’s tax package would cost some $400 billion more than the House’s in an apples-to-apples comparison.
That figure reflects pet priorities for Thune, Finance Chair Mike Crapo (R-Idaho) and other Senate Republicans who want to make sure costly business tax incentives are made permanent. Notably, the JCT figure does not reflect a House-brokered deal on the state-and-local-tax deduction — something that is crucial to a handful of blue-state Republicans but is otherwise disposable as far as the Senate GOP is concerned.
Adding in the SALT language from the House-passed bill — which a handful of GOP lawmakers are insisting on — would add another $350 billion to the cost of the bill.
The ballooning tax cut package is important because House conservatives cut a deal with Speaker Mike Johnson as part of budget negotiations earlier this year that directly linked the size of the spending cuts to the overall price tag of the bill. Johnson even told hard-liners they could seek to remove him as speaker if he didn’t follow through.
Under that agreement, Republicans are permitted to enact $4 trillion in tax cuts as long as they muster $1.5 trillion in spending cuts. Any tax cuts that Republicans pile on above that amount needs to be offset dollar-for-dollar with additional spending cuts.
Thirty-eight House Republicans, led by Rep. Lloyd Smucker (R-Pa.), wrote a letter to Thune in early June reminding him as much.
“Our position has been very clear for months now,” Smucker said in a brief interview Tuesday.
“I’m confident that Senator Thune has received multiple messages, not only from members, like the letter, and myself, but also with our leadership, who made the commitment,” added House Budget Chair Jodey Arrington (R-Texas).
Technically, the deal is only binding in the House, and Republicans there can waive the budget provision with the same simple-majority vote they need to pass the bill. Still, asked on Tuesday, Johnson said he expects the final bill to comply with the House budget instructions.
Senate Republicans are hoping to exceed the House’s $1.6 trillion of spending cuts, but are running into major headaches this week.
Some of them are political: A swath of GOP senators, not to mention House moderates, are uneasy with a Crapo-led plan to hold down Medicaid costs by targeting provider taxes, which most states use to leverage federal matching dollars and fund their programs. Senate GOP leaders have sought to allay concerns about threats to rural hospitals by creating a separate rescue fund, but lawmakers are continuing to push for less drastic House language that merely freezes the provider taxes instead of rolling them back.
Other headaches have been procedural, amplified by Senate budget rules: To skirt a filibuster and pass the bill on party lines, leaders need the chamber’s parliamentarian to sign off on various cost-saving provisions, and some have not passed muster — at least not yet.
Those include a $41 billion provision that would shift some food-aid costs to states for the first time. The measure was ruled ineligible over the weekend; but Republicans were informally advised Tuesday a tweaked version could likely remain in the bill.
Asked if he still thought the Senate could find deeper savings than the House, Thune said, “I hope so” while adding that what number the Senate would ultimately land on is “not certain” while the parliamentarian rulings are pending.
Also pending is a final resolution of the SALT issue. Blue-state Republicans who pushed for raising the cap on deductions have said they’re not willing to budge on the House-passed proposal. But Arrington said that the Senate’s extra tax cuts, including the permanent business tax provisions, are “going to probably put downward pressure on what we do with SALT.”
Treasury Secretary Scott Bessent, who attended Tuesday’s closed-door GOP policy lunch on the Hill, told reporters afterward that he expected a resolution of the SALT issue in the coming days. But it could remain live until the very end of the “vote-a-rama” senators are aiming to undertake this weekend as the megabill is debated and potentially amended.
Besides SALT, House GOP leaders will likely push for several further modifications in a final “wraparound” amendment before the Senate passes the bill if it appears poised for failure in the House, according to three people granted anonymity to discuss private deliberations.
Asked about the burgeoning House opposition to the Senate bill, Johnson said “it’s premature to judge a product that hasn’t been delivered or decided upon yet.” He said he expects the bill to abide by the House budget parameters and that he spoke Tuesday with Thune to ensure “we have a product that both chambers can agree on.”
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