Trump Tax Bill Hits Senate as GOP Torn by Competing Demands (2)

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.

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.

Senate Majority Leader John Thune

Photographer: Graeme Sloan/Bloomberg

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.

Read More: Tillis Won’t Seek Reelection After Trump Primary Threat

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.

Senator Thom Tillis

Photographer: Al Drago/Bloomberg

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.

Read More: Senate Republicans Restore Medicaid Cuts to Trump Tax Package

Murkowski and Tillis have also called to slow down planned phaseouts of solar, wind and other renewable energy credits that have spurred job creation in their states.

Those requests are in direct opposition to demands from Senator Ron Johnson of Wisconsin and others to bake in more Medicaid cuts in a bid to shrink the overall price tag of the bill. He says Rick Scott of Florida, Mike Lee of Utah and Cynthia Lummis of Wyoming will join with him to back an amendment to include faster health coverage cuts during the voting session slated to start Monday.

Read More: Tax Bill Would Add $3.3 Trillion to US Deficits, CBO Says

Trump has not delved into the details of the legislation. Instead, the president has pushed for speed, demanding that Congress deliver the bill to him by July 4. The House will also need to vote on the Senate-passed version before it can go the president’s desk to be signed into law.

Meeting the July 4 deadline is ambitious — but possible if Republican leaders can successfully navigate thorny fights. Final Senate passage of the bill could come sometime late Monday or early Tuesday if Thune is able to cut deals with enough senators for passage.

The House then will need to vote on the Senate package. That likely means Speaker Mike Johnson will have to wrangle House Republicans to support the Senate legislation. A vote in the House could take place as soon as Wednesday.

Several members have already signaled they aren’t satisfied with aspects of the bill, but any further changes likely mean missing Trump’s Friday deadline and risking his ire.

(Adds additional market reaction in sixth paragraph.)

--With assistance from David Goodman and Blaise Robinson.

To contact the reporters on this story:
Laura Davison in Washington at ldavison4@bloomberg.net;
Erik Wasson in Washington at ewasson@bloomberg.net

To contact the editors responsible for this story:
Megan Scully at mscully32@bloomberg.net

Bill Faries, Kevin Whitelaw

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