GOP weighs canceling recess to wrap up Trump's budget bill

WASHINGTON — Republican leaders are stepping on the gas to get the giant budget reconciliation package to President Donald Trump’s desk after a renewed push by the president for his Capitol Hill allies to meet his July 4 deadline.

But from tax provisions to Medicaid changes, roadblocks remain in meeting that aggressive timetable, which is more symbolic than tied to any legislative deadline, though the debt ceiling likely needs to be raised by the end of July. And lawmakers will certainly want to hold on to as much of their July 4 recess as possible, which is set to start Friday — for now.

Trump posted on Truth Social Tuesday morning that he needed the bill on his desk “ASAP.”

“To my friends in the Senate, lock yourself in a room if you must, don’t go home, and GET THE DEAL DONE THIS WEEK,” Trump wrote. “Work with the House so they can pass it IMMEDIATELY. NO ONE GOES ON VACATION UNTIL IT’S DONE.”

Speaker Mike Johnson told Republicans during a closed-door meeting Tuesday morning that they should keep their schedules flexible this weekend and early next week. He said the Senate could pass the bill “maybe by Friday, Saturday.”

“If the Senate does its work on the timeline we expect, we will do our work as well,” Johnson said. “And I think everybody’s ready for that.”

But there’s a significant amount of work for both chambers to do to get the bill to the finish line. Johnson said three areas of the Senate’s bill are causing the most concern to the House: the timing of the rollback of clean-energy subsidies, the state and local tax deduction cap and changes to Medicaid.

“I remain very optimistic that there’s not going to be a wide chasm between the two products, what the Senate produces and what we produce. We all know what the touchpoints are, the areas of greatest concern,” Johnson said.

Senate Majority Leader John Thune wants his chamber’s “vote-a-rama” to begin as soon as Thursday, though other GOP senators said the timeline could slip, potentially into the weekend.

Senate Republicans don’t have a finished product yet, and are awaiting key “Byrd droppings” — provisions that have to fall out of the bill or face a 60-vote point order on the floor — from the Senate parliamentarian on the health care and tax titles.

Navigating the ‘touchpoints’

Senators are still haggling over the bill’s provision that would bring down, by about 40%, the maximum taxes states that expanded Medicaid under the 2010 health care law can levy on health care providers. This is a much deeper cut than the House-passed version, which would freeze current provider tax rates.

States use provider taxes to finance higher Medicaid spending, which triggers more federal matching funds.

Some GOP senators fear the Senate language will disproportionately harm rural hospitals, nursing homes and community health centers. Sen. Susan Collins, R-Maine, has proposed a $100 billion fund for those hospitals and other providers to offset negative impacts.

The SALT deduction cap is another flashpoint for Republicans. Senate Republicans, who tend to represent low-tax states, want to avoid a big increase to the $10,000 cap, which they see as an expensive giveaway to high-tax, blue states.

But a handful of GOP House members from California, New Jersey and New York insist senators must stick with the $40,000 SALT cap and $500,000 income phase-out they negotiated to include in the House-passed package.

“The Senate shouldn’t fuss with the House bill,” Rep. Nick LaLota, R-N.Y., said Tuesday. “The House bill is a compromise between people who view the world very differently, and to interrupt that, to change that, to mess with that, is to put the whole bill at risk.”

LaLota said he and four colleagues would vote against the bill if the Senate waters down the deal that he and others reached with House leaders. He said he expects Johnson to move quickly in the House following Senate passage.

“Rightfully so, the speaker wants to use speed to our advantage,” LaLota said. “But we shouldn’t be confused. You know, fast is not always best, and if they try to ram down our throats a bad SALT provision fastly, it’s just going to get dumped.”

Senate Republicans said Monday evening they’re still sorting out how to handle the wind-down of clean energy tax credits.

The Senate Finance draft text included a more gradual phaseout for many of the credits than the House-passed bill. But moderates and supporters of specific clean energy subsidies, such as a tax credit for clean hydrogen production, are pushing for a slower phaseout, while conservatives would like to see them repealed entirely.

Rep. Chip Roy, R-Texas, posted on X Tuesday morning that it would be a mistake for the Senate to “jam the House with its weaker, unacceptable” version before July 4.

“The bill in its current Senate form would increase deficits, continue most Green New Scam subsidies, & otherwise fail even a basic smell test ... I would not vote for it as it is,” he posted.

House Freedom Caucus Chairman Andy Harris, R-Md., voted “present” on the House bill and said Tuesday he would vote “no” if the Senate passes its current version. Harris said the Senate bill “weakens key House priorities.”

Rep. Lloyd K. Smucker, R-Pa., the architect of a provision in the House reconciliation instructions linking tax cuts to spending cuts, reserved judgment on the bigger price tag attached to the Senate’s tax provisions, saying the Finance Committee could still make up the difference through spending cuts.

Lawmakers are still waiting on an estimate from the Congressional Budget Office on how much the Senate draft would save through cuts to Medicaid, as well as the revised package’s total savings.

But Smucker made clear that he expected the Senate to stick to the spending-to-tax-cut ratio established by the House. For every dollar above $4 trillion in tax cuts, the Senate must find an additional dollar above the $1.5 trillion spending cut target set by the House, he said.

“For me, it still has to comply with the framework to have my support,” he said. “We’ve made our position clear, and so I would hope that is being considered as they come up with a final product.”

New Medicaid warning

The Senate bill’s cuts to Medicaid are already too deep for 16 House GOP centrists, however, who penned a letter to Thune and Johnson on Tuesday expressing opposition.

Signatories on the letter, led by Rep. David Valadao of California, include many of the House Republicans considered most vulnerable in next year’s midterms.

“As Members of Congress who helped secure a Republican majority, we believe it is essential that the final reconciliation bill reflects the priorities of our constituents — most importantly, the critical need to protect Medicaid and the hospitals that serve our communities,” they wrote. “The House’s approach reflects a more pragmatic and compassionate standard, and we urge that it be retained in the final bill.”

Three of the signatories on the Medicaid letter are among those blue-state House Republicans also drawing a hard-line on the SALT issue: New York’s Mike Lawler and Andrew Garbarino and California’s Young Kim.

Inside Elections with Nathan L. Gonzales considers Lawler’s race a "Toss-up," while Kim’s is rated "Lean Republican," as is Valadao’s.