Congress
Capitol agenda: GOP eyes cuts to Trump’s tax promises
Senate Finance Republicans are increasingly looking to dial back key items on President Donald Trump’s tax policy wish list. And it’s pitting them against the architect of the House-passed tax legislation, Ways and Means Chair Jason Smith — and potentially even the White House.
The rub is this: The House version of the megabill would restore tax incentives for research and development, business equipment and debt interest through 2029, which Trump has indicated he supports. But Senate Republicans are dead-set on making them permanent, a proposition that would likely add hundreds of billions in more red ink to the legislation.
To offset that cost, GOP senators are looking to water down other tax provisions they believe aren’t as “pro-growth.” Those policies include “no taxes on tips,” “no taxes on overtime” and tax relief for seniors — all proposals Trump touted on the campaign trail and collectively boast a price tag of roughly $230 billion, according to the Joint Committee on Taxation.
Smith is warning senators to tread carefully in challenging Trump’s desires.
“I think that the United States Senate will not want to scale down the president’s priorities. No tax on tips, no tax on overtime are two of his top priorities,” the Missouri Republican told reporters Monday. “Are there some tweaks that they can do to it that I would recommend? Yes, and I have recommended.”
But some Senate Republicans who sit on the Finance panel have made clear they have their own ideas. When Blue Light News asked Sen. Ron Johnson whether he believes “no tax on tips” or “no tax on overtime” are pro-growth, he gave a terse “nope.”
“They’re making a case to increase the labor supply,” the Wisconsin Republican told Blue Light News. “I would just extend the current tax law.”
Sen. Thom Tillis (R-N.C.) has likewise been pushing to make changes to both policies, telling Blue Light News Monday that “no tax on overtime” should be rewritten to ensure it only applies to people working over 40 hours a week.
Meanwhile, House Republicans are hoping to tweak some language in their bill they believe the Senate parliamentarian will identify as non-compliant with the budget reconciliation process. They’ll do so by using a procedural maneuver within the Rules Committee that won’t require the chamber to take a standalone vote on a revised measure, five people told Blue Light News.
House Republican leaders expect a report on the potential Senate problems Tuesday morning, though Majority Leader Steve Scalise acknowledged they may not have the full list before the Rules hearing scheduled for later Tuesday.
“I don’t think there will be any big surprises,” Speaker Mike Johnson added Monday, “but that’s part of the process.”
What else we’re watching:
— Rescissions heads to Rules: The House Rules Committee is scheduled to vote on the White House’s rescissions package at 2 p.m. Tuesday, paving the way for a floor vote by Thursday. Johnson and Scalise are confident they can appease members’ concerns about clawing back money Congress has already greenlit and slashing funding for the PEPFAR program and public media.
— Crypto vote imminent: Senate Majority Leader John Thune wants to pass landmark cryptocurrency legislation this week that would create new rules for dollar-pegged digital tokens. He teed up the stablecoin bill for another procedural vote as soon as Wednesday.
— Trump admins on Blue Light News: A slew of Trump administration officials will testify before various House and Senate committees Tuesday on the president’s fiscal 2026 budget requests for their agencies. That includes Defense Secretary Pete Hegseth, Joint Chiefs of Staff Chair Gen. Dan Caine, NIH Director Jay Bhattacharya, CIA Director John Ratcliffe and Energy Secretary Chris Wright.
Jordain Carney, Jasper Goodman, Meredith Lee Hill and Jennifer Scholtes contributed to this report.
Texas Attorney General Ken Paxton raised $18 million in the third quarter of 2026 across his campaign and his joint fundraising committees, his campaign tells Blue Light News, a significant haul for the homestretch of the election.
Paxton’s number is double his $9 million second-quarter total, and signals Republican donors are rallying behind their Texas nominee. The campaign did not provide a current cash-on-hand total.
Democrat James Talarico’s campaign has yet to release his fundraising totals for the quarter. He raised $30 million last quarter.
“We now have the resources to make sure every Texan sees Talarico’s radical record between now and Election Day,” said Nick Maddux, senior adviser to the Paxton campaign.
The past quarter — the first full reporting period after Paxton’s primary runoff victory in May — saw Republicans flock to Texas for their midterm convention, which featured pro-Paxton fundraisers on the sidelines. Last week, the Paxton campaign announced a massive $20 million ad buy across the state, one of the largest-ever single media investments in a Texas Senate race.
Paxton needs the money: In a recording of a private donor event last month shared with POLITICO, he said he has “never been in a race where I felt less control over the campaign,” pointing to influence “from D.C.”
Texas has emerged as a huge money suck for Senate Republicans, who have poured tens of millions into the state to aid Paxton. Senate Leadership Fund, their top super PAC, has spent or reserved well over $100 million in the state to date, and the Trump-aligned MAGA Inc. and its affiliates plan to spend near $45 million in the state through Oct. 12.
Paxton has acknowledged that money has changed the race’s narrative: In a recording of a private donor event last monthshared with POLITICO, he said he has “never been in a race where I felt less control over the campaign,” pointing to influence “from D.C.”
Most recent public polling shows Talarico with a small lead in the race in spite of the recent onslaught in GOP spending, though Paxton’s campaign released an internal poll last week showing Paxton leading by three points.
Sen. Raphael Warnock is hitting the road for the last month before Election Day.
The Georgia Democrat’s final midterm campaign surrogate sprint will only increase chatter around the possibility that he might run for president in 2028, according to a nine-stop itinerary shared first with Blue Light News.
First, he’ll touch down in New Hampshire on Tuesday before hitting Nevada on Wednesday. Next, he’ll travel to South Carolina (Oct. 13), Mississippi (Oct. 14), North Carolina (Oct. 15), South Carolina (Oct. 16-17), Michigan (Oct. 20-21), Wisconsin (Oct. 23) and Ohio (Oct. 24-26).
“Senator Reverend Warnock will be hitting the trail to energize voters who are sick of the President enriching himself while ordinary people continue to pay more for everything,” a spokesperson told Playbook. “Tapping into the righteous anger that voters are feeling across the country, the pastor in the Senate will again make the campaign trail his pulpit: calling out Trump’s corruption, while leaving voters hopeful for the next generation of Democratic leadership.”
Asked recently at the Texas Tribune Festival about whether he would run for president, Warnock said: “We’ll see what happens.”
Democrats are eager to win back subpoena power if they retake Congress, but they’re split on how hard they’ll go after corporate America.
The party is united by the idea of aggressive oversight of President Donald Trump’s administration, which will help shape their messaging in the run-up to the 2028 election. But Democrats are at odds over how fiercely to use their probing power to go after the corporations, law firms and universities that courted the White House over the past two years.
“We don’t want to turn into a banana republic where you lose an election and it’s all about retribution,” Rep. Bill Foster, a senior member of the Financial Services Committee, said.
“We’re going to have to be a little bit wise about when companies simply did something they had to do to survive this unprecedented level of corruption, compared to companies that actually got on board and profited more by being a partner in his corruption,” he added.
Some progressives counter that a restrained approach would sit uneasily with the party’s base.
“It would be political suicide for Democrats to campaign on fighting corruption and then turn around and go easy on the very companies that are facilitating it,” said Ella Fanger, corporate power policy adviser at the liberal nonprofit group Demand Progress.
Prime targets for some Democrats are the tech companies that have taken steps to be on the president’s good side, like Apple, Amazon and Meta, which have all donated to Trump’s ballroom effort. Major cryptocurrency players, including Coinbase, Ripple and Tether also chipped in for the ballroom, and will be subject to questioning from Democrats.
The late convicted sex offender Jeffrey Epstein’s networks and associates are also poised for probes — a push that has ensnared big banks like JPMorgan Chase, Deutsche Bank and Bank of America in the past.
Sen. Chris Murphy said the party should focus on the nexus between Trump and corporate corruption.
“We should get to the bottom of the corrupt relationship that exists between corporations in this country and the Trump administration,” Murphy said, pointing to questions he’s posed about a tobacco company’s donation to Trump’s super PAC before new e-cigarette rules were unveiled.
Still, Sen. Catherine Cortez Masto, who serves on Senate Banking, warned against the weaponization of power.
“Our focus should be solving problems that we’re seeing happening,” she said, pointing to cost-of-living issues around health care, housing and energy.
What else we’re watching:
— FIRST IN IC: BUILD AMERICA CAUCUS AGENDA — Energized by progress on permitting and housing legislation this term, a bipartisan development-focused caucus is rolling out a detailed agenda for next term. The 40-member Build America Caucus is releasing a 95-page package of proposals, first shared with Blue Light News, that outlines plans touching on health care, transportation, child care and research. The group launched last year with the goal of cutting red tape and regulatory bottlenecks to spur development.
— AI COLLAB STILL ILLUSIVE FOR CRUZ, CANTWELL — Commerce Chair Ted Cruz and ranking member Maria Cantwell might still be celebrating Senate passage of their landmark college sports bill last week, but it’s unclear the momentum will carry forward to agreement on another committee priority: artificial intelligence. Among the dozen lawmakers, aides and industry experts who spoke to Blue Light News, few expect the two senators to shed their well-established ideologies and styles after the mutual win. That could doom their ability to replicate their latest achievement in something as complex and divisive as an AI regulatory framework.
Jasper Goodman, Katherine Hapgood, Riley Rogerson and Kelsey Brugger contributed to this report.
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