By Richard Rubin

WASHINGTON -- Republican senators want changes to the GOP tax-and-spending megabill, and their ideas come with price tags that will challenge party leaders' ability to cobble together a version that can get to President Trump's desk quickly.

Sens. Josh Hawley (R., Mo.) says the Medicaid cuts go too far for his state, and wants some funding restored, while Sen. Susan Collins (R., Maine) is concerned about the bill's effects on rural hospitals and low-income families. Sen. Thom Tillis (R., N.C.) wants slower phaseouts of clean-energy tax credits to avoid scuttling private-sector investments that responded to federal incentives. Sens. James Lankford (R., Okla.) and Steve Daines (R., Mont.) want to take some tax cuts that are temporary in the House bill and make them permanent to provide certainty for businesses.

Locking down the votes of those senators and others with similar requests will cost money one way or another, and could further inflame intraparty tension with fiscal hawks. To balance things out, senators could find more offsetting spending cuts, dial back their tax relief or accept larger budget deficits. Each of those options comes with risks, both in finding a majority for the bill in the 53-47 Senate and in avoiding problems in the House, which passed its version 215-214 last month and must approve any changes.

Already, Sens. Rand Paul (R., Ky.) and Ron Johnson (R., Wis.) are saying that they oppose the bill because it doesn't contain enough spending cuts or do enough to address budget deficits, and others have made similar statements. Billionaire Elon Musk joined that chorus on Tuesday, calling the bill a "disgusting abomination" that lawmakers should oppose.

"There's too much spending," said Sen. Ted Budd (R., N.C.). "I'd rather deal with it now as a relatively smaller problem than I would as a massive problem later, where no one is willing to purchase our debt."

Big cuts, but bigger deficits

The House-passed bill has more than $1.5 trillion in spending cuts and other deficit-reducing policies over a decade, and administration officials are hailing it as a historic step toward fiscal responsibility. But the combination of new spending and tax cuts outstrips those spending cuts, and outside estimates suggest the bill would increase budget deficits by about $2.7 trillion over a decade, compared with doing nothing.

Senate Republican leaders have only three votes to spare in the chamber, and satisfying nearly everyone simultaneously is their core challenge as they try to push the legislation to President Trump's desk by July 4. They will try to find money to address the Hawley-Collins-Tillis concerns without losing too many votes on the party's right flank. And on top of that, they may need to find more spending cuts to satisfy conservatives.

"Republican senators are anxious to move forward, and we are going to get this done one way or the other," said Senate Majority Leader John Thune (R., S.D.) on Tuesday. "There are a lot of moving parts."

The difficulties don't mean the bill is close to collapse. GOP senators share a sense of purpose and they are committed to passing legislation that would avert an outcome they can't countenance: The scheduled expiration of many of Trump's 2017 tax cuts, which are slated to lapse Dec. 31.

Republicans packaged those tax-cut extensions with new tax cuts, a debt-limit increase, spending boosts for border security and national defense and spending cuts to Medicaid and nutrition assistance. The idea was to create one giant piece of legislation -- the "big, beautiful bill" -- that rolled the party's priorities into one must-pass measure.

But that piles a lot of pressure onto this one bill. Any lawmaker can find items in it to oppose. And senators know that they may not get many more chances to turn their priorities into law before the 2026 midterm elections, when control of the House could change hands.

"The House has a good product," Lankford said. "But just like 215 House members all put their fingerprints on it, we've got to have 50-plus senators put their fingerprints on it."

Floating various options

Senate Finance Committee Chairman Mike Crapo (R., Idaho) said lawmakers have options. They could say that extensions of expiring tax cuts don't have a cost or assume that faster economic growth will cover the cost of some changes.

"Everything is a mix and the answer is a mix of all kinds of pro-growth policies, all kinds of other revenue sources, all kinds of other offsets and all kinds of scoring differentials," he said.

Hawley floated three possible ways to cover any shortfall: a higher top individual income-tax rate, higher taxes on fund managers' carried-interest income and caps on what the government pays for prescription drugs. Trump has supported all those ideas in some form, but they sharply divide Republicans.

Sen. John Hoeven (R., N.D.) said he wanted to consider changes to the clean-energy provisions, perhaps to continue some incentives for geothermal energy while phasing out incentives for more established industries such as wind and solar.

Hoeven said that one place Republicans could look is the deduction for state and local taxes, or SALT. A late change to the House bill bumped the cap on that deduction to $40,000, up from $30,000 in the version that came out of the House Ways and Means Committee and up from $10,000 in the current tax system.

That switch reduced projected revenue by about $130 billion, but it also secured the votes of a handful of House Republicans from high-tax states.

"The House has a very large SALT number. The Senate's probably going to take a look at that," Hoeven said.

That deduction cap is one thing that the Senate can't touch, said Sen. Markwayne Mullin (R., Okla.), a former House member who acts as a liaison between the two chambers and is close to Ways and Means Chairman Rep. Jason Smith (R., Mo.).

"I think that's a killer if we try to adjust that back down," Mullin said.

Write to Richard Rubin at richard.rubin@wsj.com

(END) Dow Jones Newswires

June 04, 2025 08:00 ET (12:00 GMT)

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