Senate Republicans wrap second week of negotiations on ‘One Big Beautiful Bill Act’

Senate Republicans have concluded a second week of internal negotiations on the One Big Beautiful Bill Act, a sweeping legislative package that passed the House last month by a narrow margin. The bill, a centerpiece of the current congressional session, proposes major reforms across energy, taxation, and border enforcement, and is a top priority for both congressional Republicans and the Trump administration.

Senate proposed adjustments prompt House reaction

As Senate Republicans consider revisions to key provisions in the One Big Beautiful Bill Act, House GOP lawmakers are pushing back – urging the upper chamber to preserve the carefully negotiated framework. The exchange highlights growing tensions between the chambers as they work to reconcile differences and advance the bill toward final passage.

Some of the key changes being considered that are related to the proposed new limits in the House bill concern a variety of clean energy tax credits established under the Inflation Reduction Act (P.L. 117-169). The House-passed bill would significantly scale back or eliminate incentives for many clean energy sources and energy efficiency programs, however, several moderate Senate Republicans have raised concerns about the potential impact on ongoing investments, prompting discussions around more gradual phase-outs or carveouts for certain tax benefits.

Senate Finance Committee Chairman Mike Crapo (R-Idaho) told senators Wednesday that the Finance Committee’s approach to IRA energy credits includes accelerating the repeal of some incentives while phasing out others more gradually based on energy type – a strategy that several Senate Republican moderates are closely monitoring amid concerns about its potential impact.

However, members of the House Freedom Caucus emphasized the importance of maintaining the bill’s rollbacks of these tax credits enacted, which they argued are essential for restoring fiscal discipline and curbing what they viewed as excessive government spending.

“We want to be crystal clear: If the Senate attempts to water down, strip out, or walk back the hard-fought spending reductions and IRA Green New Scam rollbacks achieved in this legislation, we will not accept it,” the group said, according to Bloomberg Tax on June 9.

Another sticking point is the cap on the state and local tax (SALT) deduction. The House bill raised the cap to $40,000 for those incomes below $500,000 for years starting in 2025, but Senate Republicans are considering revisions that could scale back those numbers – potentially risking backlash from GOP House members representing high-tax states. Speaker Mike Johnson (R-La.) and other House Republicans have warned against altering the carefully negotiated compromise, underscoring the delicate balance required to maintain party unity.

“I’m very, very concerned about what they might do on the SALT number and a number of provisions in the bill,” Johnson told reporters. “They need to hopefully modify it as little as possible.”

Rep. Nick LaLota expressed a more direct response in a social media post.

“The $40K SALT deal is a key thread in the 1,000+ page One Big Beautiful Bill. If the Senate pulls it, the whole framework could fall apart. They should keep changes minimal so we can deliver real relief to LONG ISLAND.”

That debate over the SALT deduction is part of a broader concern among House Republicans about preserving the integrity of the House-passed bill as it moves through the Senate. In a letter to Senate Majority Leader John Thune (R-S.D.), a group of 37 House Republicans, led by Budget Committee Vice Chair Lloyd Smucker (R-Pa.), urged the Senate to preserve the House’s fiscal framework as the One, Big Beautiful Bill advances.

Other key provisions under discussion include the proposed new section 899, which targets foreign jurisdictions imposing discriminatory tax measures on US companies. In addition, Chairman Crapo has reportedly confirmed that he will support making certain business-focused provisions – such as the limitation on interest deductibility, the restoration of immediate expensing for domestic research and development costs, and the 100 percent bonus depreciation for qualified property – a permanent part of the tax code. Together, Senate Republicans believe these provisions promote growth by providing businesses with greater certainty, encouraging productivity-enhancing investments, and strengthening the competitive position of the US economy.

Sen. John Hoeven (R-N.D.) supported Sen. Crapo’s remarks, confirming, “Yes, he did” commit to making business tax provisions permanent. “I’ve been adamant from the start, and he’s been adamant from the start,” Hoeven added.

That said, making these provisions permanent would come at a significant fiscal cost and could require tradeoffs that may complicate negotiations, posing political challenges for Republican leaders as they work to finalize the bill.

Democrats continue opposition

Democrats, meanwhile, have voiced strong opposition to the bill’s tax priorities. Senate Democratic taxwriters, along with Minority Leader Chuck Schumer of New York have called for a public markup in the Senate Finance Committee, criticizing the closed-door nature of the negotiations.

In a letter, they argued that the bill’s tax cuts for the wealthy and corporations should be debated transparently – especially given the potential impact on healthcare and climate investments.

“If Trump and Republicans in Congress are going to deprive millions of Americans of their health care so that millionaires and rich corporations can get massive tax cuts, it should not be done in secret backroom negotiations. It should be done in the light of day, including through a full markup in the Senate Finance Committee,” the signatories wrote in their letter.

Procedural hurdles

In response to procedural hurdles, Senate Republicans this week removed certain provisions – such as changes to the employee retention credit – that were flagged by the parliamentarian as incompatible with budget reconciliation rules. The House subsequently voted to formally strip those items, effectively clearing a key hurdle and preserving the bill’s eligibility for fast-track consideration under budget reconciliation – shielding it from the threat of a filibuster.

With pressure mounting and fiscal conservatives demanding that any new tax relief be offset by permanent spending reductions, the path forward remains complex. Still, momentum is building as the Senate works toward its self-imposed July 4 deadline. A draft could be released soon, marking a significant step toward reconciling the two chambers’ versions and delivering a final bill to President Trump’s desk.