Trump, Republicans Rush to Overcome Internal Clashes on Tax Bill

Key Points

  • Republican leaders are working to resolve internal conflicts over President Trump's extensive tax and spending package, facing opposition from within their party.
  • Democrats are capitalizing on GOP divisions by proposing amendments during a marathon voting session to highlight controversial cuts to social safety-net programs like Medicaid.
  • Senate Majority Leader John Thune is uncertain about securing enough votes, needing to win over key GOP holdouts while managing potential losses.
  • The $3.3 trillion package, which includes significant cuts to social programs to fund tax cuts favoring the wealthy, risks political backlash in the 2026 midterms.
  • US Treasuries are under pressure due to anticipated larger budget deficits, with long-term bond yields reflecting investor concerns over extended lending to the government.

Summary

Republican Party leaders are scrambling to unify their ranks over President Donald Trump’s $3.3 trillion tax and spending package, which includes deep cuts to social safety-net programs like Medicaid to fund tax breaks primarily benefiting the wealthy. Internal GOP disagreements persist over the extent of these cuts and the rollback of clean energy tax credits, while Democrats, sidelined in Washington, are exploiting these divisions by proposing amendments during a marathon Senate voting session. These amendments aim to expose politically sensitive provisions and complicate the GOP’s efforts to pass the bill swiftly. Senate Majority Leader John Thune remains uncertain about securing enough support, needing to sway key holdouts among a divided party, with only a narrow margin for dissent. Meanwhile, Treasury Secretary Scott Bessent expresses optimism about the bill reaching Trump’s desk by July 4. The legislation’s potential to widen budget deficits is pressuring US Treasuries, particularly long-term bonds, as investors demand higher yields. Democrats warn of a voter backlash in the 2026 midterms, with figures like Senator Thom Tillis, who announced his retirement amid disputes over Medicaid cuts, highlighting the bill’s unpopularity and Trump’s unfulfilled health care promises. The Congressional Budget Office estimates 11.8 million could lose health coverage over a decade due to the proposed cuts.

Jamie Tarabay and Ken Tran (BGOV)
June 30, 2025
Stocks
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