06/12/2025

Senate Tweaks to Tax Package Could Create Headaches in the House

The "big, beautiful bill" is facing challenges

Republicans are racing to finalize a major tax package before the July 4 recess — but growing differences between the Senate and House versions could throw a wrench in the plan.

At the heart of the debate is the state and local tax (SALT) deduction cap.

• The House bill, passed last month, raises the cap from $10,000 to $40,000 — a big win for lawmakers from high-tax states like California, New Jersey and New York.
• But Senate Republicans are questioning the price tag.
• According to the nonpartisan Tax Policy Center, the change could cost $33 billion in 2025 alone.

Green energy tax provisions are also a sticking point.

The House proposal includes cuts to clean energy incentives originally created under the Inflation Reduction Act — changes that were hard-fought and narrowly passed. Now, the conservative House Freedom Caucus is urging Senate Republicans not to backtrack.

However, Senate Majority Leader John Thune (R-SD) is navigating competing pressures: keeping the bill's cost down while avoiding major changes that could send the legislation into a tailspin when it returns to the House.

Now, the Senate Finance Committee is still working on the final text, and Thune is expected to meet with former President Trump today to align on strategy.

With time running short, lawmakers acknowledge the July 4 deadline is ambitious — and could slip. Still, the pressure is on to deliver a unified bill that can make it to the President’s desk without unraveling along the way.

Thune has recognized the razor-thin margin for error but continues to stress that "failure is not an option."

This article was provided to OSAP by ASAE's Power of Associations and Inroads.