MW As Congress returns, here's where the Senate could make changes to the GOP's megabill

By Victor Reklaitis

The Trump team and House leaders are pushing the Senate to aim for speed rather than lots of revisions to the One Big Beautiful Bill Act.

As Congress returns to Washington after a week-long recess, the Senate is due to ramp up its work on the tax-and-spending megabill passed by the House of Representatives before the break.

House Speaker Mike Johnson has said he's encouraging Senate Republicans to "make as few modifications as possible, remembering that I have a very delicate balance on our very diverse Republican caucus over in the House." The House, where the GOP has a 220-212 majority, struggled to OK the megabill and ultimately did so on May 22 through a squeaker of a vote - 215 to 214.

President Donald Trump and his aides also are pushing for the Senate to aim for speed rather than lots of revisions to the legislation. During a press briefing last week, White House Press Secretary Karoline Leavitt said "it's critical that Senate Republicans maintain the momentum and quickly pass the One Big Beautiful Bill."

Even so, the Senate is expected to make some tweaks to the massive legislative package before giving its OK in July or August. Here are a few key areas where GOP senators, who have a 53 to 47 majority in their chamber, look poised to make their mark.

Incentives for next-generation energy

A group of GOP senators viewed as moderates has come out against the House bill's provisions that deliver early terminations for green-energy ICLN tax credits that were established by the Democrats' Inflation Reduction Act of 2022, noted Christopher Niebuhr, a senior research analyst at Beacon Policy Advisors, in a report. The Senate is likely to restore some of those IRA tax benefits, reckon analysts at Evercore ISI.

Four GOP senators took a stand on this issue via an April letter to Senate Majority Leader John Thune, saying a "wholesale repeal, or the termination of certain individual credits, would create uncertainty, jeopardizing capital allocation, long-term project planning, and job creation in the energy sector XLE and across our broader economy." The letter writers were John Curtis of Utah, Jerry Moran of Kansas, Lisa Murkowski of Alaska and Thom Tillis of North Carolina. Solar stocks TAN tumbled on May 22 as the final version of the House bill featured a last-minute hit to some breaks for that sector.

Medicaid changes

Most Republicans are portraying the megabill's approach toward Medicaid as an effort to cut wasteful spending and fraud in order to protect the program for the lower-income Americans who need it the most. But a significant number of Republican senators have concerns about the Medicaid cuts in the House-passed version of the bill.

On this issue, veteran TD Cowen analyst Chris Krueger said it's worth tracking GOP senators such as Murkowski, along with Missouri's Josh Hawley, Maine's Susan Collins and both of the chamber's West Virginians, Shelley Moore Capito and Jim Justice. Hawley said in an op-ed in mid-May that Republicans "must ignore calls to cut Medicaid and start delivering on America's promise for America's working people."

Overall spending and the debt ceiling

GOP Sen. Ron Johnson of Wisconsin is leading a group of senators who are "adamant that they won't back the bill unless further spending cuts are included," said Beacon's Niebuhr. The senator said in a Tucker Carlson interview that lawmakers "need to take the time to go line by line, to do a DOGE impact on the entire budget, to find the outrageous spending, eliminate what people won't even notice, but also to simplify and rationalize our tax system."

DOGE refers to the so-called Department of Government Efficiency, the Trump administration's cost-cutting program that has been led by billionaire Tesla Inc. $(TSLA)$ Chief Executive Elon Musk, who is now stepping away from his work in Washington to refocus on Tesla and his other businesses. Musk has offered criticism along the lines of the Wisconsin senator's comments, telling CBS News that the GOP megabill "increases the budget deficit, not just decreases it, and undermines the work that the DOGE team is doing."

Meanwhile, Republican Sen. Rand Paul of Kentucky is objecting to a provision in the House bill that raises the nation's debt ceiling in order to avoid a U.S. default. Treasury Secretary Scott Bessent has said special measures to keep the federal government under its debt limit could run out by August, so he's urging Congress to suspend or raise the limit by mid-July. But the Kentucky senator told Fox News a week ago: "I've told them if they strip out the debt ceiling, I'll consider - even with the imperfections - voting for the rest of the bill, but I can't vote to raise the debt ceiling [by] $5 trillion. There's got to be someone left in Washington who thinks debt is wrong and deficits are wrong, and wants to go in the other direction."

Pass the SALT - maybe with tweaks

A number of GOP senators have expressed significant displeasure with the House's plan to quadruple the cap on the deduction for state and local taxes, or SALT, said Beacon's Niebuhr. But he added he agrees with the view that the Senate is more likely to tweak the new cap than return it to its current level, "for fear of tanking the bill in the House."

In order to secure crucial votes from blue-state Republicans who pushed for a higher SALT cap, House leaders are aiming to lift the cap to $40,000 from $10,000, as MarketWatch has reported. The tax break starts getting phased out for taxpayers making $500,000 year.

The Senate's No. 2 Republican, John Barrasso of Wyoming, noted on May 21 that SALT isn't an important issue for any GOP senators, though he also stressed that it looks key for maintaining Republican control of the House in next year's midterm election.

"There's not a single senator who is impacted by SALT," Barrasso said at a Washington event hosted by law firm BakerHostetler. "That's an area where we understand their situation, but we don't have that same pressure or problem. We have other issues with other members that we've got to focus on."

-Victor Reklaitis

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June 01, 2025 13:00 ET (17:00 GMT)

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