Senate Republicans weigh paring back Trump’s campaign promises. Senate Finance Republicans are exploring ways to scale back some of President Donald Trump’s high-profile tax proposals — including “no taxes on tips” and “no taxes on overtime” — to offset the cost of permanently restoring business tax breaks in the House-passed tax bill. According to Politico, those three provisions carry a combined $230 billion price tag, and some senators argue they do little to spur growth compared to the business tax deductions. The White House and House Ways and Means Chair Jason Smith (R-MO) are urging the Senate not to challenge Trump’s priorities, while Senate Republicans weigh tweaks and procedural workarounds to keep the bill compliant with reconciliation rules.
Senators seek to rescue hydrogen tax credit dropped from House bill. Key Senate Republicans are pushing to preserve a hydrogen production tax credit that was eliminated in the House’s tax package. The incentive, part of the Biden-era climate law, offers up to $3 per kilogram of hydrogen and is currently scheduled to run through 2033. But under the House bill, it would expire at the end of this year for new projects. Sen. John Cornyn (R-TX) and Sen. Shelley Moore Capito (R-WV) say they are exploring options to extend the window for eligibility. Bloomberg reports that major industry players and the U.S. Chamber of Commerce are lobbying to keep the credit, warning that ending it prematurely could jeopardize billions in investment and thousands of jobs.
How much growth would “One Big, Beautiful Bill” deliver? TPC’s Bill Gale and The American Enterprise Institute’s Kyle Pomerleau argue that the growth effects of the House-passed One Big, Beautiful Bill Act (OBBBA) would be modest. The Joint Committee on Taxation, the Tax Foundation, and the Penn Wharton Budget Model all estimate GDP growth of under one percent over ten to thirty years. While OBBBA would lower some marginal rates and restore temporary business expensing, which would improve incentives to work and invest, other features of the plan would work in the opposite direction.
Foreign investment could take a hit from a little-known tax in OBBBA. The bill’s inclusion of Section 899, a provision that allows the US to impose steep taxes on foreign companies from countries deemed to tax US firms “unfairly,” is the subject of a new analysis from the Global Business Alliance. It estimates the provision could cost the US 360,000 jobs and $55 billion annually in gross domestic product. Critics, including multinational business coalitions, warn the measure could deter investment and stoke trade tensions. But House Ways and Means Chair Jason Smith argues it gives the US needed leverage. The Associated Press reports that the measure’s ambiguity and potential to trigger retaliation are raising concerns in the Senate.
Bessent emerges as contender to lead the Fed. Treasury Secretary Scott Bessent is reportedly under consideration to replace Federal Reserve Chair Jerome Powell when his term ends in May 2026. As Bloomberg reports, Bessent joins a short list of possible nominees that includes former Fed governor Kevin Warsh and other economists aligned with President Trump. Bessent has been central to the Trump administration’s efforts to stimulate growth through trade, tax, and regulatory changes. While the financial community sees him as competent and credible, his potential nomination raises questions about the Fed’s independence given Trump’s previous comments on interest rate policy.
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