Senate Republicans have a plan. First, they’re going to tinker around the edges of the House of Representatives’ plan to stop taxing overtime pay. Then they’re going to mess with the House’s plan to create $1,000 savings accounts for American children born in 2025 and going forward. Finally, they’re going to use the money those moves make to give longer tax breaks to businesses.
The attempt is a tone-deaf rejection of President Donald Trump’s populist agenda in favor of old Republican economic orthodoxy, but it all makes sense if you follow the U.S. Senate.
It’s wild to see how many senators have responded to months of delicate, Jenga-like House negotiations by each coming up with a different block they want to rearrange.
The House Ways and Means Committee, led by Chairman Jason Smith (R-Mo.), built the framework for the tax cuts. The package followed a two-year listening tour and reflected a more traditional Republican approach to economic policy. Committee members aimed to align the bill with lessons from that tour and with President Trump’s campaign pledge to make raising children more affordable.
They understood the challenge ahead. The Senate remains far more willing to cut taxes for corporations than for families. The House bill’s individual tax cuts come with a higher price tag than the corporate provisions, making passage more politically fraught.
To navigate the narrow path offered by budget reconciliation — which lets Republicans bypass the 60-vote threshold and pass legislation with just 51 votes — Smith coordinated closely with Senate Finance Committee Chairman Mike Crapo (R-Idaho) to fine-tune the language.
The problem for both chairmen is that the Senate doesn’t play well with the rest of Washington. Senators don’t love Trump’s more populist economics and feel (and often are) less bound to him than members of the House. These senators point to traditional Republican thinking on permanence and reliability in business tax cuts so that businesses can better make long-term economic decisions.
With this thinking, they want the deductions for interest expenses, research and development, and the 100% depreciation for major commercial assets to be permanent, instead of sunsetting in five years.
Making these tax cuts permanent means the money to pass through reconciliation needs to be found elsewhere. That’s why they’ve set their sights on some of the individual tax benefits the House worked so hard to craft to the president’s promises. We don’t have their specific proposals yet, but the targets aren’t great for the White House.
The Senate isn’t simply a self-imposed island from much of D.C. It’s a collection of islands. Senators are powerful people, but also insular. It makes sense that Senate Majority Leader John Thune (R-S.D.) wasn’t ready to start work on taxes because these bills are supposed to start in the House anyway, but it’s still wild to see how many senators have responded to months of extremely delicate, Jenga-like House negotiations by each coming up with a different block they want to rearrange.
Once you let one Republican senator make a move, you’ve got to let 52 others have a go. It’s a dangerous level of play, taking place in a chamber that reliably trails domestic American opinion by 10+ years. In 2025, that means the tax policies of Mitt Romney and Paul Ryan in a bill crafted for Donald Trump and Vice President JD Vance’s policies. So far, the White House isn’t too keen on it.
But both chambers are still bullish. They know it needs to get done. It’s moving in the right direction, but as any Jenga veteran knows, it’s hard to know which block will bring the whole thing tumbling down.
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