Politics
Senate Republicans Want to Trim Some of Trump’s Tax Cuts in Domestic Policy Bill
Even before the House passed the sweeping bill carrying President Trump’s domestic policy agenda, Senate Republicans made it clear that they hoped to make major changes to the legislation before the G.O.P. was done muscling it through Congress.
Several have wanted to pare back the cuts to Medicaid, the health care program for the poor, that House Republicans envisioned in the version of the legislation that they approved late last month. A handful have sought to salvage tax credits incentivizing clean energy projects that the House measure would repeal. Many have pushed to grant companies prized tax breaks for the long run, not just for a few years, as their colleagues across the Capitol opted to do.
The problem senators face is that each of these changes would be expensive. At $2.4 trillion, the cost of the legislation that barely passed the House is already huge. So Senate Republicans are now hunting for ways to save money, a hazardous task that could involve shaving the ambitions of their colleagues in the House or in the White House.
On the chopping block are some of Mr. Trump’s favorite parts of the bill, like not taxing overtime. Republican lawmakers have long been skeptical of some of the president’s tax ideas, with the view that the populist policies will not spur the economy like traditional supply-side conservatism can.
“I think it all comes down to what we’ve got to pay for,” Senator Thom Tillis, Republican of North Carolina, said. “At the end of the day, we’ve got to pay for pro-growth policies.”
The debate is in some ways a classic one on Capitol Hill, where throughout history and without regard to political party, senators have been reluctant to defer to their colleagues in the House, and vice versa.
“It’s the Senate, so the Senate is going to do what it damn well wants to do, and that’s a good process,” Senator Ted Cruz, Republican of Texas, said at a Punchbowl News event on Wednesday, where he warned that his chamber would pass a bill “markedly different” from the House measure, pushing enactment of the package well past his party’s July 4 deadline.
To top Senate Republicans, the most economically powerful tax cuts incentivize companies to make new investments and conduct research. Accelerated depreciation schedules, though, do not grab political attention the way Mr. Trump’s promises for “no tax on tips” did, so the House version of the bill only included the business tax breaks through 2029.
Senate Republicans want to make the business write-offs a permanent feature of the tax code, a change that they and some economists believe would help encourage more companies to expand. As one way to cover that cost, Senate Republicans are looking at ways to further curb eligibility for a tax cut for overtime pay, including by setting a lower income ceiling for the break and by more strictly defining what counts as overtime, lawmakers said.
“Obviously, there’s a lot of dials, whether you’re talking about no tax on tips, overtime, any of those,” said Senator Roger Marshall, Republican of Kansas. “How many years did they go? At what level do they stop?”
Senator Bernie Moreno, Republican of Ohio and a former car dealer, wants to tighten the House plan for allowing Americans to deduct up to $10,000 in interest on car loans, which would apply to vehicles made in the United States, including used and new cars, as well as all-terrain vehicles and recreational vehicles. Mr. Moreno is proposing to limit the tax break, one of Mr. Trump’s campaign promises, just to loans for new cars.
“We save a lot of money. An R.V.? Motorcycles? A.T.V.s?” he said. “That’s not the idea; the idea is to help working Americans be able to afford a car.”
Senate Republicans are searching for cuts because of growing concern among some conservatives, as well as on Wall Street, about the bill’s impact on the country’s fiscal situation. While paring back some of Mr. Trump’s campaign promises could help keep the cost of the legislation near what it was in the House, some lawmakers are calling for much deeper spending cuts.
Senator Ron Johnson, Republican of Wisconsin, has been loudly calling for the legislation, which already includes roughly $1.8 trillion in spending reductions, to slash trillions more. His complaints won him a meeting with top White House officials, including Vice President JD Vance, at the Capitol this week.
Mr. Johnson’s pitch is to remove all of Mr. Trump’s new tax priorities from the bill and instead focus the legislation exclusively on extending expiring tax cuts from 2017, cutting spending and raising the debt ceiling. Republicans could then tackle White House priorities, and further spending cuts, in a second piece of legislation, Mr. Johnson argues.
“You can’t do it in one fell swoop. I don’t want to criticize what has been done; I want to support what’s been done,” he said. “But I absolutely — I can’t accept that this is the new norm. We need another bite of the apple in this Congress.”
Of course, jettisoning much of the president’s agenda from the legislation is a tall order, and White House officials have been making the case for the House measures to cut taxes on tips, overtime and for older Americans.
“No Tax on Overtime and No Tax on Tips are presidential priorities that 80 million Americans voted for in November,” Abigail Jackson, a White House spokeswoman, said in a statement. “They will remain in this historic piece of legislation in order to deliver the largest tax cut in history.”
There are other sources of money tempting Senate Republicans. Some are considering cuts to Medicare, though changes to the health care program for older Americans comes with substantial political risks.
Then there is the state and local tax deduction, often called SALT. In the House, a small group of Republicans from New York, New Jersey and California demanded that the legislation include an increase to the $10,000 cap on the deduction. They ultimately won an agreement to set the new limit at $40,000, an expensive change that would largely benefit homeowners in areas with high taxes.
While the change was necessary to win the support of blue-state Republicans in the House, senators are less committed to the policy. Senator John Thune of South Dakota, the Republican majority leader, recently remarked at the White House that “there really isn’t a single Republican senator who cares much about the SALT issue.”
At the same time, House Republicans committed to more SALT relief have warned that changing the House agreement could scuttle the entire package. But some Republican senators cannot help but think that money earmarked for a higher SALT cap could have a better use.
“There’s a lot of things we could do with that,” said Senator James Lankford, Republican of Oklahoma.
Megan Mineiro contributed reporting.
Politics
Federal judge blocks Trump from cutting childcare funds to Democratic states over fraud concerns
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A federal judge Friday temporarily blocked the Trump administration from stopping subsidies on childcare programs in five states, including Minnesota, amid allegations of fraud.
U.S. District Judge Arun Subramanian, a Biden appointee, didn’t rule on the legality of the funding freeze, but said the states had met the legal threshold to maintain the “status quo” on funding for at least two weeks while arguments continue.
On Tuesday, the U.S. Department of Health and Human Services (HHS) said it would withhold funds for programs in five Democratic states over fraud concerns.
The programs include the Child Care and Development Fund, the Temporary Assistance for Needy Families program, and the Social Services Block Grant, all of which help needy families.
USDA IMMEDIATELY SUSPENDS ALL FEDERAL FUNDING TO MINNESOTA AMID FRAUD INVESTIGATION
On Tuesday, the U.S. Department of Health and Human Services said it would withhold funds for programs in five Democratic states over fraud concerns. (AP Photo/Jose Luis Magana, File)
“Families who rely on childcare and family assistance programs deserve confidence that these resources are used lawfully and for their intended purpose,” HHS Deputy Secretary Jim O’Neill said in a statement on Tuesday.
The states, which include California, Colorado, Illinois, Minnesota and New York, argued in court filings that the federal government didn’t have the legal right to end the funds and that the new policy is creating “operational chaos” in the states.
U.S. District Judge Arun Subramanian at his nomination hearing in 2022. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
In total, the states said they receive more than $10 billion in federal funding for the programs.
HHS said it had “reason to believe” that the programs were offering funds to people in the country illegally.
‘TIP OF THE ICEBERG’: SENATE REPUBLICANS PRESS GOV WALZ OVER MINNESOTA FRAUD SCANDAL
The table above shows the five states and their social safety net funding for various programs which are being withheld by the Trump administration over allegations of fraud. (AP Digital Embed)
New York Attorney General Letitia James, who is leading the lawsuit, called the ruling a “critical victory for families whose lives have been upended by this administration’s cruelty.”
New York Attorney General Letitia James, who is leading the lawsuit, called the ruling a “critical victory for families whose lives have been upended by this administration’s cruelty.” (Win McNamee/Getty Images)
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Fox News Digital has reached out to HHS for comment.
In what might be the most decisive critique yet of President Trump’s remake of the Kennedy Center, the Washington National Opera’s board approved a resolution on Friday to leave the venue it has occupied since 1971.
“Today, the Washington National Opera announced its decision to seek an amicable early termination of its affiliation agreement with the Kennedy Center and resume operations as a fully independent nonprofit entity,” the company said in a statement to the Associated Press.
Roma Daravi, Kennedy Center’s vice president of public relations, described the relationship with Washington National Opera as “financially challenging.”
“After careful consideration, we have made the difficult decision to part ways with the WNO due to a financially challenging relationship,” Daravi said in a statement. “We believe this represents the best path forward for both organizations and enables us to make responsible choices that support the financial stability and long-term future of the Trump Kennedy Center.”
Kennedy Center President Ambassador Richard Grenell tweeted that the call was made by the Kennedy Center, writing that its leadership had “approached the Opera leadership last year with this idea and they began to be open to it.”
“Having an exclusive relationship has been extremely expensive and limiting in choice and variety,” Grenell wrote. “We have spent millions of dollars to support the Washington Opera’s exclusivity and yet they were still millions of dollars in the hole – and getting worse.”
WNO’s decision to vacate the Kennedy Center’s 2,364-seat Opera House comes amid a wave of artist cancellations that came after the venue’s board voted to rename the center the Donald J. Trump and the John F. Kennedy Memorial Center for the Performing Arts. New signage featuring Trump’s name went up on the building’s exterior just days after the vote while debate raged over whether an official name change could be made without congressional approval.
That same day, Rep. Joyce Beatty (D-Ohio) — an ex officio member of the board — wrote on social media that the vote was not unanimous and that she and others who might have voiced their dissent were muted on the call.
Grenell countered that ex officio members don’t get a vote.
Cancellations soon began to mount — as did Kennedy Center‘s rebukes against the artists who chose not to appear. Jazz drummer Chuck Redd pulled out of his annual Christmas Eve concert; jazz supergroup the Cookers nixed New Year’s Eve shows; New York-based Doug Varone and Dancers dropped out of April performances; and Grammy Award-winning banjo player Béla Fleck wrote on social media that he would no longer play at the venue in February.
WNO’s departure, however, represents a new level of artist defection. The company’s name is synonymous with the Kennedy Center and it has served as an artistic center of gravity for the complex since the building first opened.
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Democratic Rep. Alexandria Ocasio-Cortez is leveling a stunning accusation at Vice President JD Vance amid the national furor over this week’s fatal shooting in Minnesota involving an ICE agent.
“I understand that Vice President Vance believes that shooting a young mother of three in the face three times is an acceptable America that he wants to live in, and I do not,” the four-term federal lawmaker from New York and progressive champion argued as she answered questions on Friday on Capitol Hill from Fox News and other news organizations.
Ocasio-Cortez spoke in the wake of Wednesday’s shooting death of 37-year-old Renee Nicole Good after she confronted ICE agents from inside her car in Minneapolis.
RENEE NICOLE GOOD PART OF ‘ICE WATCH’ GROUP, DHS SOURCES SAY
Members of law enforcement work the scene following a suspected shooting by an ICE agent during federal operations on January 7, 2026, in Minneapolis, Minnesota. (Stephen Maturen/Getty Images)
Video of the incident instantly went viral, and while Democrats have heavily criticized the shooting, the Trump administration is vocally defending the actions of the ICE agent.
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Vance, at a White House briefing on Thursday, charged that “this was an attack on federal law enforcement. This was an attack on law and order.”
“That woman was there to interfere with a legitimate law enforcement operation,” the vice president added. “The president stands with ICE, I stand with ICE, we stand with all of our law enforcement officers.”
And Vance claimed Good was “brainwashed” and suggested she was connected to a “broader, left-wing network.”
Federal sources told Fox News on Friday that Good, who was a mother of three, worked as a Minneapolis-based immigration activist serving as a member of “ICE Watch.”
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Ocasio-Cortez, in responding to Vance’s comments, said, “That is a fundamental difference between Vice President Vance and I. I do not believe that the American people should be assassinated in the street.”
But a spokesperson for the vice president, responding to Ocasio-Cortez’s accusation, told Fox News Digital, “On National Law Enforcement Appreciation Day, AOC made it clear she thinks that radical leftists should be able to mow down ICE officials in broad daylight. She should be ashamed of herself. The Vice President stands with ICE and the brave men and women of law enforcement, and so do the American people.”
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