Senate Republicans are scrambling this week to finalize and pass the bill containing much of President Trump’s legislative agenda. GOP leaders are still aiming to have the Senate hold a vote-a-rama on a slew of amendments starting Thursday and to get the giant tax-and-spending package to the president’s desk by July 4 — just 11 days from now — but they’ve got a lot of work left to do.

The GOP plan is still undergoing the so-called Byrd Bath, the process in which Parliamentarian Elizabeth MacDonough rules on whether its provisions meet the criteria to be included in a reconciliation bill and bypass the Senate’s usual requirement for a 60-vote supermajority. Items in the bill must address spending, revenue or the debt limit, not strict policy matters.

MacDonough has already delivered several setbacks for Republicans, ruling against some provisions, including:

* SNAP-ping back. Republicans were planning to force states to take on more costs of the Supplemental Nutrition Assistance Program, known as SNAP or food stamps, based on the states’ payment error rates. The plan also would have removed SNAP eligibility for immigrants who are not citizens or lawful permanent residents, with limited exceptions. Some Republicans had raised concerns that the SNAP changes would be politically costly.

The Senate had already scaled back a plan by House Republicans that would have cut nearly $300 billion from the program. But, as Politico notes, the loss of the Senate bill’s scaled-back SNAP savings leaves Republicans looking for more cuts to help pay for their plans, including a $67 billion farm bill package: “Although the committee’s bill hadn’t received a final cost saving estimate from the nonpartisan Congressional Budget Office, committee staff predicted it would save around $211 billion in agriculture spending, with the cost-share plan making up a large portion of those trims.”

Politico says that Republicans believe they may be able to salvage the SNAP changes by tweaking the language in the legislation and clarifying how payment error rates will factor into state costs.

* CFPB is protected. Republicans were looking to gut the Consumer Financial Protection Bureau by eliminating its funding to save $6.4 billion. But the CFPB is funded through the Federal Reserve, not Congress, so on Friday, MacDonough knocked out that measure, along with other elements of the Senate Banking Committee’s portion of the bill.

“I remain committed to advancing legislation that cuts waste and duplication in our federal government and saves taxpayer dollars,” Senate Banking Committee Chairman Tim Scott, a South Carolina Republican, said in a statement. “My colleagues and I remain committed to cutting wasteful spending at the CFPB and will continue working with the Senate parliamentarian on the Committee’s provisions.”

* Restrictions on federal judges nixed. The parliamentarian ruled against a provision that would have restricted the power of federal judges to issue nationwide injunctions or restraining orders. Those orders have stymied some Trump administration plans and frustrated Republican lawmakers and administration officials — though the Biden and Obama administrations also saw some of their plans halted by such court rulings. “We successfully fought for rule of law and struck out this reckless and downright un-American provision,” Senate Democratic Leader Chuck Schumer said in a statement.

Republicans can still include these measures in their bill, but they would require 60 votes to pass. The GOP has a 53-47 majority in the Senate.

MacDonough also ruled against a restriction on grant funding for so-called sanctuary cities, but she upheld a proposal that ties federal grants for broadband access to a ban on state and local government regulations on AI.

What’s next: Republicans were reportedly making final arguments to MacDonough today on the Finance Committee portion of the bill, which includes the Senate GOP’s Medicaid changes. Senate Republicans were scheduled to hold a conference meeting Monday night for an update on the status of the bill and sticking points. Ahead of a planned Independence Day recess starting this weekend, Republican Senate Majority Leader John Thune is reportedly prepared to keep the Senate in session until it passes the reconciliation bill.

The bottom line: At this point, for the bill to get to Trump’s desk by July 4, the House would have to swallow whatever changes the Senate might approve, but House Republicans are already raising some alarms over the Senate version of the legislation, and GOP divisions remain on key issues including Medicaid cuts, clean energy tax credits and the deduction for state and local taxes.

Good evening. President Donald Trump just announced a ceasefire between Israel and Iran that he said he hopes will become permanent. That news comes after Iran launched a missile attack on the Al Udeid Air Base in Qatar, the largest American military installation in the Middle East. The attack, retaliation for the U.S. bombing of three Iranian nuclear sites over the weekend, was thwarted by air defense systems, officials said. No casualties were reported. Trump, in an earlier post on social media, had floated the possibility of Iranian regime change.

While the world is watching the Middle East, Senate Republicans are working to finish their budget reconciliation bill. Here’s the latest.

Senate Republicans Scramble to Address Challenges to Their Megabill

Senate Republicans are scrambling this week to finalize and pass the bill containing much of President Trump’s legislative agenda. GOP leaders are still aiming to have the Senate hold a vote-a-rama on a slew of amendments starting Thursday and to get the giant tax-and-spending package to the president’s desk by July 4 – just 11 days from now – but they’ve got a lot of work left to do.

The GOP plan is still undergoing the so-called Byrd Bath, the process in which Parliamentarian Elizabeth MacDonough rules on whether its provisions meet the criteria to be included in a reconciliation bill and bypass the Senate’s usual requirement for a 60-vote supermajority. Items in the bill must address spending, revenue or the debt limit, not strict policy matters.

MacDonough has already delivered several setbacks for Republicans, ruling against some provisions, including:

* SNAP-ing back. Republicans were planning to force states to take on more costs of the Supplemental Nutrition Assistance Program, known as SNAP or food stamps, based on the states’ payment error rates. The plan also would have removed SNAP eligibility for immigrants who are not citizens or lawful permanent residents, with limited exceptions. Some Republicans had raised concerns that the SNAP changes would be politically costly.

The Senate had already scaled back a plan by House Republicans that would have cut nearly $300 billion from the program. But, as Politico notes, the loss of the Senate bill’s scaled-back SNAP savings leaves Republicans looking for more cuts to help pay for their plans, including a $67 billion farm bill package: “Although the committee’s bill hadn’t received a final cost saving estimate from the nonpartisan Congressional Budget Office, committee staff predicted it would save around $211 billion in agriculture spending, with the cost-share plan making up a large portion of those trims.”

Politico says that Republicans believe they may be able to salvage the SNAP changes by tweaking the language in the legislation and clarifying how payment error rates will factor into state costs.

* CFPB is protected. Republicans were looking to gut the Consumer Financial Protection Bureau by eliminating its funding to save $6.4 billion. But the CFPB is funded through the Federal Reserve, not Congress, so on Friday, MacDonough knocked out that measure, along with other elements of the Senate Banking Committee’s portion of the bill.

“I remain committed to advancing legislation that cuts waste and duplication in our federal government and saves taxpayer dollars,” Senate Banking Committee Chairman Tim Scott, a South Carolina Republican, said in a statement. “My colleagues and I remain committed to cutting wasteful spending at the CFPB and will continue working with the Senate parliamentarian on the Committee’s provisions.”

* Restrictions on federal judges nixed. The parliamentarian ruled against a provision that would have restricted the power of federal judges to issue nationwide injunctions or restraining orders. Those orders have stymied some Trump administration plans and frustrated Republican lawmakers and administration officials – though the Biden and Obama administrations also saw some of their plans halted by such court rulings. “We successfully fought for rule of law and struck out this reckless and downright un-American provision,” Senate Democratic Leader Chuck Schumer said in a statement.

Republicans can still include these measures in their bill, but they would require 60 votes to pass. The GOP has a 53-47 majority in the Senate.

MacDonough also ruled against a restriction on grant funding for so-called sanctuary cities, but she upheld a proposal that ties federal grants for broadband access to a ban on state and local government regulations on AI.

What’s next: Republicans were reportedly making final arguments to MacDonough today on the Finance Committee portion of the bill, which includes the Senate GOP’s Medicaid changes. Senate Republicans were scheduled to hold a conference meeting Monday night for an update on the status of the bill and sticking points. Ahead of a planned Independence Day recess starting this weekend, Republican Senate Majority Leader John Thune is reportedly prepared to keep the Senate in session until it passes the reconciliation bill.

The bottom line: At this point, for the bill to get to Trump’s desk by July 4, the House would have to swallow whatever changes the Senate might approve, but House Republicans are already raising some alarms over the Senate version of the legislation, and GOP divisions remain on key issues including Medicaid cuts, clean energy tax credits and the deduction for state and local taxes.

Senate GOP Slashes Official Cost of Megabill With Accounting ‘Gimmick’

A new analysis of the Republican megabill currently under consideration in the Senate finds that it could be much less costly than previously estimated – as long as you’re willing to ignore the cost of extending the 2017 tax cuts that were set to expire at the end of the year.

Senate Republicans asked the non-partisan Joint Committee on Taxation to score the tax provisions of the reconciliation bill using a “current policy” baseline, a novel accounting method that assumes that maintaining current policies effectively has no cost, regardless of whether the policies were set to expire, and thus is budget neutral.

Under that assumption, the JCT reported this weekend that the tax portions of the Republican megabill would cost just $442 billion over 10 years – a huge drop from the previous estimate, which included a roughly $3.8 trillion cost for extending the 2017 tax cuts.

A malleable number: Senate Finance Chair Mike Crapo, Republican from Idaho, said the JCT score reflects his preferred way of thinking about the 2017 tax cut extension. “Extending the Trump tax cuts prevents a $4 trillion tax increase-this is not a change in current tax policy or tax revenue,” he said in a statement Sunday. “This score more accurately reflects reality by measuring the effects of tax policy changes relative to the status quo.”

Sen. Jeff Merkley of Oregon, the senior Democrat on the Budget Committee, rejected the new score as the product of “magic math.”

“Republicans finally showed their hand, and its completely dishonest,” Merkley said in a statement. “‘Current policy baseline’ is a budget gimmick that is nothing more than smoke and mirrors instead of honest accounting. This bill will add trillions upon trillions of dollars to the national debt to fund tax breaks for billionaires – while Republicans want everyone to think it adds zero.”

Democrats have asked the JCT to release a score of the bill using the more conventional “current law” baseline, which recognizes that many of the 2017 tax cuts are set to expire at the end of 2025. Eliminating that expiration dramatically alters projections for tax revenues over the next 10 years.

Tax and budget experts typically rely on the current law baseline. Maya MacGuineas, president of the fiscally conservative Committee for a Responsible Federal Budget, said the current policy baseline amounts to little more than a “gimmick” that threatens to produce legislation that is “an affront to logic, consistency and sound principles of budgeting.”

“The TCJA was scored as temporary back in 2017 in order to keep its reported costs down,” she said in a statement Monday. “The current bait and switch doesn’t make $3.8 trillion of borrowing disappear, it just hides the cost from the public.”

Senate tweaks to the bill: The Senate altered some tax provisions in the bill in an effort to reduce costs, reducing the generosity of some notable components that were passed by the House in May. As congressional reporter Jamie Dupree notes, the Senate reduced the cost of policies that would eliminate federal income taxes on tips and on overtime pay by placing a cap on the amount of income that can be exempted and by phasing out the tax break at higher income levels.

Workers would be able to avoid taxes only the first $25,000 in tip income, an allowance that starts phasing out at $150,000 a year in total income. For overtime pay, the Senate capped the amount that could be claimed at $12,500, and the tax break also starts phasing out at $150,000 in earnings.

The changes lower the cost of those elements in the bill. The cost of the “no tax on tips” provision falls from $39.6 billion in the House version to $30.7 billion in the Senate, and the cost of the “no tax on overtime” provision drops from $124 billion to $89.3 billion, according to the JCT.

Other provisions of the bill that saw tweaks include the proposed deduction for auto loan interest, the cost of which fell from $58 billion in the House version to $31 billion in the Senate, and new rules for expensing manufacturing costs, which dropped from $148 billion to $141 billion, per Andrew Lautz of the Bipartisan Policy Center.

For many of the other major tax provisions, the switch in baselines did the work of reducing costs, even where lawmakers tweaked some of the related details. For example, per Politico’s Benjamin Guggenheim, extending the personal income tax cuts in the 2017 bill would cost an estimated $2.2 trillion in the conventional analysis, but that cost is sharply reduced to $83 billion in the new JCT analysis, which looks only at the ways the Senate altered the existing rules moving forward. Similarly, the cost of extending and expanding the Child Tax Credit is estimated to be about $800 billion, but that cost falls to $124 billion in the new JCT score.

The bottom line: Republicans may hope to use the current policy baseline to obscure much of the cost of the bill as understood in conventional analysis. Still, the JCT score does tell us that the new provisions in the tax portions of the reconciliation bill would cost an estimated $442 billion, bringing the total cost of the tax component to about $4.2 trillion over 10 years when analyzed on a current law basis.

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