GOP Senators Plan Cuts to Trump's Tax Promises

Senate Finance Republicans are increasingly looking to dial back key items on President Donald Trump’s tax policy wish list. And it’s pitting them against the architect of the House-passed tax legislation, Ways and Means Chair Jason Smith — and potentially even the White House.

The rub is this: The House version of the megabill would restore tax incentives for research and development, business equipment and debt interest through 2029, which Trump has indicated he supports. But Senate Republicans are dead-set on making them permanent, a proposition that would likely add hundreds of billions in more red ink to the legislation.

To offset that cost, GOP senators are looking to water down other tax provisions they believe aren’t as “pro-growth.” Those policies include “no taxes on tips,” “no taxes on overtime” and tax relief for seniors — all proposals Trump touted on the campaign trail and collectively boast a price tag of roughly $230 billion, according to the Joint Committee on Taxation.

Smith is warning senators to tread carefully in challenging Trump’s desires.

“I think that the United States Senate will not want to scale down the president’s priorities. No tax on tips, no tax on overtime are two of his top priorities,” the Missouri Republican told reporters Monday. “Are there some tweaks that they can do to it that I would recommend? Yes, and I have recommended.”

But some Senate Republicans who sit on the Finance panel have made clear they have their own ideas. When POLITICO asked Sen. Ron Johnson (R-Wis.) whether he believes “no tax on tips” or “no tax on overtime” are pro-growth, he gave a terse “nope.”

“They’re making a case to increase the labor supply,” the Wisconsin Republican told POLITICO. “I would just extend the current tax law.”

Sen. Thom Tillis (R-N.C.) has likewise been pushing to make changes to both policies, telling POLITICO on Monday that “no tax on overtime” should be rewritten to ensure it applies only to people working over 40 hours a week.

White House spokesperson Abigail Jackson said “No Tax on Overtime and No Tax on Tips are presidential priorities that 80 million Americans voted for in November.”

“They will remain in this historic piece of legislation in order to deliver the largest tax cut in history,” she added.

Meanwhile, House Republicans are hoping to tweak some language in their bill they believe the Senate parliamentarian will identify as non-compliant with the budget reconciliation process. They’ll do so by using a procedural maneuver within the Rules Committee that won’t require the chamber to take a standalone vote on a revised measure, five people told POLITICO.

House Republican leaders expect a report on the potential Senate problems Tuesday morning, though Majority Leader Steve Scalise (La.) acknowledged they may not have the full list before the Rules hearing scheduled for later Tuesday.

“I don’t think there will be any big surprises,” Speaker Mike Johnson added Monday, “but that’s part of the process.”