President Donald Trump’s sprawling tax bill is starting to shrink in size as the strict rules of the Senate become a roadblock to some of its provisions.
Language is already being struck by the Senate parliamentarian, a nonpartisan referee on what is and is not allowed under the filibuster-skirting process of reconciliation. Core elements of the bill, a set of tax, border, and defense priorities, are expected to stay ahead of a vote next week. But some language that made it through the House has run into the Byrd Rule, which requires that all language have a direct fiscal impact.
So far, Republicans have been forced to strip out select environmental rollbacks and were blocked from zeroing out the Consumer Financial Protection Agency’s budget, with more provisions expected to get a ruling in the coming days.
Democrats are claiming an early victory. Under the budget process, the minority party can challenge language down to the title of the bill, and Democrats are planning on dozens of parliamentary inquiries before a final Senate vote.
Sen. Jeff Merkley (D-OR), the top Democrat on the Senate Budget Committee, said they’ll “continue examining every provision in this Great Betrayal of a bill and will scrutinize it to the furthest extent.”
Republicans also get to make their case before any ruling, and both parties are scheduled to meet over the weekend with Senate Parliamentarian Elizabeth MacDonough.
In addition to the CFPB, she has disqualified language that would eliminate the Public Company Accounting Oversight Board and slash pay and funding for Federal Reserve staff and the Office of Financial Research.
MacDonough also ruled against GOP attempts to roll back Biden-era climate regulations, including Inflation Reduction Act programs. However, Republicans are allowed to still retrieve unobligated funds from the law and have pursued other means of repeal.
A policy allowing companies to pay a fee to expedite environmental reviews during the permitting process was also deemed in violation and must be stricken.
Senate Majority Leader John Thune (R-SD) expects the back-and-forth to continue into next week, telling reporters on Thursday that the conversations had moved into the major tax and health provisions of the bill.
“We have sort of pre-litigated a lot of that, but there are a lot of the other provisions in the bill, chapters in the bill, that are still subject to going through the Byrd bath, and we’re in the process of doing that,” Thune said.
One of the most controversial decisions that could come before MacDonough is Republicans’ use of a “current policy baseline” to score the bill, a tactic that allows them to treat the extension of Trump’s 2017 tax cuts as cost-free.
Among the other provisions on the chopping block are a tax break for firearm suppressors and limits on states’ ability to regulate AI. Republicans also want to curtail federal judges’ abilities to issue nationwide injunctions that have hindered Trump’s efforts to rein in the size of the federal government.
The process is the same as the one that befell Democrats as they used reconciliation to pass major priorities in 2021. MacDonough repeatedly blocked Democrats from passing a minimum wage hike and legislation protecting Dreamers, among other provisions. However, they were successful in getting consequential policies, such as their drug pricing reforms, into what eventually became the Inflation Reduction Act.
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Thune could overturn the rulings of MacDonough, who was appointed to her role in 2012 by then-Senate Majority Leader Harry Reid, a Nevada Democrat, with a simple majority vote. But Thune has opposed such a precedent-setting move and may lack the GOP votes in a chamber he controls 53-47.
Republicans are racing to advance the legislation on the Senate floor next week and pass it before the July 4 holiday, at which point it would be kicked back to the GOP-controlled House.
Maydeen Merino contributed to this report.
