Tax Bill Delays Mount as Trump Softens on Deadline

Congress is on a tight deadline to pass President Donald Trump’s signature legislation before a self-imposed July 4 deadline. (Graeme Sloan/Bloomberg)

Hope of meeting President Donald Trump’s July 4 deadline to pass what he calls his “big, beautiful bill” appears to be fading. The crux of the problem is that Trump himself hasn’t taken a stand on major issues stymying Republican senators.

As of midday Friday, it is still unclear whether the Senate this weekend will begin voting on Trump’s megabill, which among other provisions extends the individual tax cuts originally passed during the president’s first term in 2017.

Trump at a White House press conference on Friday acknowledged that the bill might slip deeper into July.

“It’s important. It’s not the end all,” Trump said of the July 4 deadline. “It can go longer, but we’d like to get it done by that time if possible.”

The tight deadline sets up a difficult dynamic between the House and Senate. If the Senate votes this weekend, the House will have less than a week to act on the bill to get it to the president for his signature by Independence Day. With little time to negotiate, the House would be under pressure to accept the Senate’s text as-is. For that strategy to succeed, legislators need breakthroughs on several major issues before the Senate finishes its version of the bill.

The Senate’s arcane procedures are contributing to the delay. The Senate is attempting to pass the bill through “reconciliation,” a process that avoids the filibuster but carries with it strict rules that bill provisions be budget-related. The nonpartisan Senate parliamentarian is responsible for adjudicating disputes about Senate rules. Hearing the disputes, making decisions, and rewriting provisions that don’t pass muster takes time.

But at a closed-door meeting with GOP senators on Thursday, Republican leaders acknowledged that the parliamentarian wasn’t the core issue, according to Punchbowl News. The real problem, said Senate Majority Leader John Thune (R., S.D.), is that Republicans don’t have the 50 votes needed to advance the bill.

In both chambers, the GOP can afford to lose only three votes and pass a bill without Democratic support. The House version of the megabill passed by only one vote in May. The razor-thin majorities mean any GOP faction can sink the bill’s prospects.

One as yet unsolved problem is whether and how the bill would raise the cap on the state and local tax deduction from its $10,000 current level. House Republicans in Democrat-leaning states negotiated a permanent increase to $40,000 with a $500,000 income limit. Republican Senators, who care less about SALT, have sought to lower it. On Friday, Senate Republicans offered to increase the limit to $40,000 for five years, but at least one SALT Republican, Rep. Nick LaLota (R., N.Y.) has already said such a deal would be unacceptable.

“We are very close to a deal” on SALT, said Treasury Secretary Scott Bessent on Fox Business on Friday. “It is going to help the voters in their district, but is going to be fair for the overall American people. It is time for everyone to put away individual interests.”

In the meantime, some Republicans are fighting a lower cap on provider taxes that states use to finance their Medicaid programs, arguing that such a move would throw millions of people off of healthcare and force the closure of rural hospitals. To solve that issue, Senate leadership has floated a relief fund for rural hospitals, but some senators, including Sen. Susan Collins (R., Maine), have said the proposed fund is too small.

Trump, for his part, seems to care less about major parts of the bill than he does that he be able to sign it by Independence Day. While some GOP senators say Trump told him he preferred the House’s treatment of Medicaid, Thune told reporters that’s not Trump’s main concern.

“He just wants us to get a bill on his desk,” Thune told reporters on Friday when asked about the Medicaid issue.

The White House did not immediately respond to a request for comment.

Trump in the past has shown he can be a powerful closer when it is time to force final holdouts to fold. For there to be any hope of meeting the July 4 deadline, that time likely has to come soon.

Write to Joe Light at joe.light@barrons.com