Congress
From spaceports to venture capitalists, tailored tax breaks add billions to megabill
Special tax breaks for venture capitalists, Alaskan fisheries, spaceports, private schools, rum makers and others — together costing tens of billions of dollars — quietly caught a ride on Republicans’ sprawling domestic policy megabill.
The legislation is primarily designed to prevent $4 trillion in looming tax increases set to hit at the end of this year. But, shortly before approving the plan, Senate Republicans added a new crop of unrelated, bespoke tax breaks. House GOP lawmakers got in their share, too.
Many are the sort of narrowly targeted breaks Republicans have long complained are unfair, reward influential special interests and unnecessarily complicate the tax code.
There’s a new supersized deduction for business meals — though only for employees at certain Alaskan fishing boats and processing plants, with the measure stipulating the facilities must be “located in the United States north of 50 degrees north latitude” though not in a “metropolitan statistical area.”
There’s a $17 billion expansion of a little-known provision that enables venture capitalists to make a fortune tax-free.
Sen. James Lankford (R-Okla.) won a carve-out for the oil and gas industry from a minimum tax on big corporations that was created during the Biden administration.
There’s a $2 billion break important to the rum industry and, tangentially, Louisiana, said Sen. Bill Cassidy (R-La.), a tax writer.
“We have the highest per capita intake of alcohol in the nation,” he said.
The targeted tax breaks have been overshadowed by the main purpose of the legislation: preventing a whole slate of tax cuts from expiring at the end of this year, and enacting a handful of breaks for things like tips and overtime pay that President Donald Trump had promised.
But they nevertheless got the same fast-track-into-law treatment, despite some seeming to come out of nowhere with little public vetting.
Some House Republicans grumbled about the provisions — “loaded with pork to buy key Senate votes,” the chamber’s hard-right Freedom Caucus said in a memo to colleagues. But House lawmakers backed down from threats to sink the plan over fiscal concerns and other complaints, and approved it Thursday on a 218-214 vote that sends it to Trump for his signature into law.
Even as Senate Republicans added their own provisions to the legislation, they deleted some earmarks that had been approved by the House.
Though some of the add-ons are small — like an increase in a special deduction for certain Alaskan whaling captains to buy weapons and maintain their boats — others have price tags that run in the billions.
The bill includes an expansion of a little-known break that Silicon Valley investors have used to nix tax bills on tens and even hundreds of millions of dollars in earnings from Internet startups. Another spends $26 billion to create a new $1,700 credit for people who give to groups providing scholarships for children to attend private school.
Sen. Mitch McConnell (R-Ky.) secured a $7 billion tax cut for farmers that allows them to postpone paying some of the capital gains taxes they owe when selling off farmland.
There’s also a $1 billion provision allowing “spaceports” — which the legislation defines as “any facility located at or in close proximity to a launch site or reentry site” — to sell tax-exempt bonds, like airports. Sen. Ron Wyden, the chamber’s top Democratic tax writer, said in an X post that “Trump’s wedding gift to [Jeff] Bezos and birthday gift to [Elon] Musk were tucked in the new budget bill.”
Finance Chair Mike Crapo (R-Idaho) chafed at suggestions the various tax breaks are earmarks.
“I wouldn’t describe them that way,” he said. “You can go through there and find 100 specific issues, and if you want to call them earmarks, that’s your choice, but I don’t think they are.”
“Would you say that if we build a highway, would you say we’re doing an earmark for roads?” he said. “It’s infrastructure policy.”
His colleagues are likewise defending their provisions.
Lankford says the special break for oil and gas companies is needed because the arcane calculations that go into determining when a company is subject to a 15 percent minimum tax are biased against the industry.
The provision reverses the “tax penalty Democrats placed on America’s energy producers and allows our producers to deduct essential capital costs just like any other manufacturer,” he said.
Cassidy said the rum item is a permanent version of a temporary break lawmakers have approved many times before. The Treasury has long transferred federal excise taxes imposed on rum made in Puerto Rico and the Virgin Islands and sold in the U.S. back to those governments.
“We’re attempting to provide certainty for businesses, and that includes distillers,” said Cassidy, whose sugarcane-producing state is part of their supply chain.
Democrats tried, unsuccessfully, to kill some of the proposals.
During Senate deliberations, Sen. Mazie Hirono (D-Hawaii) watched her amendment targeting the private-school tax break win bipartisan support but nevertheless go down on a 50-50 vote.
“Nearly 90 percent of K through 12 students attend public schools, yet Republicans are pushing a plan in this bill to undermine support for public schools,” she said. Sen. Ted Cruz (R-Texas) retorted that Democrats “are more beholden to teacher union bosses than they are dedicated to fighting for kids.”
Even as they added their own pet projects, Senate Republicans jettisoned earmarks that had been approved by their colleagues in the House. Out is an $800 million tax cut for corporations that have income in the Virgin Islands.
They also dumped plans to spend $10 billion on a provision pushed by the fitness industry, including the YMCA, that would have allowed people to count gym-membership fees as a medical expense in Health Savings Accounts. A provision boosting the Earned Income Tax Credit for some Purple Heart winners was similarly axed.
It wasn’t all bad news for House members, though.
Rep. Mike Kelly (R-Pa.) was pleased to see Senate Republicans reinserted his plan sending a $3 billion tax break to real estate investment trusts, after lawmakers had initially deleted it from their draft.
“It was a little questionable about what was going to go and what wasn’t,” he said.
And Senate Republicans not only kept a House-approved provision exempting gun silencers from a long-standing $200 tax on firearms — they dumped the tax on all guns it applied to, except machine guns and what the legislation terms “a destructive device.” That cost: $1.7 billion.
Rep. David Kustoff (R-Tenn.) hailed the plan, calling the charge “an illegal poll tax used as a piggy bank for the federal government.”
Rep. Max Miller gave more than $70,000 in campaign cash to over a dozen congressional Republicans in the cycle’s most competitive races.
So far, most of those members aren’t saying whether or not they will return it.
The Dependable Conservative Leadership PAC kicked money to 16 vulnerable GOP candidates for Congress, according to FEC filings. The PAC is aligned with Miller, who has continued his reelection bid while denying allegations of domestic abuse.
The donations put these members in a politically delicate position as they have welcomed the cash in their fights to hold onto their seats this November — and help the party protect its fragile majorities in both chambers.
Spokespeople in the congressional and campaign offices for 13 of the 16 candidates who took the Miller-aligned money did not respond to requests for comment on if they planned to return the funding.
Only the campaign for Rep. Brad Finstad said it had already returned its contribution.
Meanwhile, a campaign spokesperson for Rep. Mike Lawler said the incumbent Republican had no plans to relinquish the money. He instead slammed Democratic challenger Cait Conley for attending a fundraiser hosted by former New York Gov. Eliot Spitzer, who resigned in 2008 after allegations of involvement in a prostitution ring.
And Derrick Van Orden, asked Tuesday night about the contribution he received from Miller during about an interview about the results of his state’s primary elections, refused to discuss the matter, calling the accusations against Miller “allegations” he had heard about “the day before yesterday.”
The recipients of Miller’s campaign cash who didn’t respond to inquiries include: Reps. Rob Bresnahan, Ryan Mackenzie, Brian Fitzpatrick, Zach Nunn, Mariannette Miller-Meeks, Nick Begich III, Tom Barrett, Juan Ciscomani, Gabe Evans, Tom Kean Jr., Jen Kiggans, and David Valadao.
Sen. Jon Husted is also staying quiet about whether he’ll return the cash. He previously said Miller should not run for reelection after Emily Miller — Max Miller’s ex-wife and Ohio GOP Sen. Bernie Moreno‘s daughter — accused her former husband of assaulting herself and their young child.
Democrats are already seizing on the matter, with a campaign spokesperson for Mackenzie’s opponent, Bob Brooks, saying in a statement the GOP incumbent is “open for business for whoever’s willing to pay up, no questions asked.”
Mike Marinella, a spokesperson for the National Republican Congressional Committee, said Tuesday Democrats are “shameless hypocrites who conveniently look the other way when their vulnerable members are bankrolled by scandal-plagued Democrats like [former Rep.] Eric Swalwell.”
The NRCC also claimed that some of the Democrats who said they’d give away Swalwell campaign contributions have, in fact, not returned the money as promised.
Unlike Miller, Swalwell resigned in April and ended his gubernatorial bid in California amid intense pressure from inside his own party over sexual assault allegations he denies.
What else we’re watching:
— NANCY PELOSI CORRECTS THE RECORD ON BIDEN: For the first time, former Speaker Nancy Pelosi disclosed what she told President Joe Biden before he withdrew his 2024 presidential reelection bid. “I only said to President Biden, ‘I’ve come to question the polling that you have and how your campaign is being conducted. I think there has to be a better campaign to win the White House,’” she shared Tuesday. Pelosi’s comments — shared on stage with Jonathan Martin at Blue Light News’s The California Agenda: Sacramento Summit — shed new light on the scramble that led to Biden dropping his campaign. But she pushed back on the narrative that she puppeteered the president’s withdrawal. She added she advised Biden to hear from outside pollsters and told him, “I think the public would like to hear that you’ve had testing that demonstrates that you can serve.”
— JEFFRIES VAGUE ON IMMIGRATION AGENDA: House Minority Leader Hakeem Jeffries Tuesday said Democrats are “committed to an accountability agenda” on immigration should they take the majority. But the New Yorker offered few specifics on what immigration policies a future House Democratic majority might pursue. “We’ll have a conversation about what dramatic change looks like” after November, Jeffries said, adding that what “unites the entirety of the House Democratic caucus family” is that “immigration enforcement should be fair, just and humane in this country.”
Riley Rogerson and Joey Fox contributed to this report.
Rep. Max Miller has kicked campaign cash to more than a dozen fellow Republicans competing in some of the midterm’s tightest races. Few are saying whether they now have plans to return the money as the Ohio lawmaker seeks reelection despite serious allegations of domestic abuse.
According to records filed with the Federal Elections Commission, Miller’s Dependable Conservative Leadership PAC has made contributions to 16 GOP incumbents struggling to hold onto their seats in Congress.
The money — more than $70,000 in all — has largely been donated in increments of $1,000, $2,500 or $5,000. In a few cases, such as with Sen. Jon Husted (R-Ohio) and Rep. Mike Lawler (R-N.Y.), the PAC maxed out with $10,000 donations.
Of these 16 Republicans who received money from Miller this cycle contacted this week by Blue Light News, only the campaign for Rep. Brad Finstad of Minnesota said it had already returned its $5,000 contribution.
A campaign spokesman for Lawler, meanwhile, said the incumbent Republican had no plans to relinquish the money, noting that Democratic challenger Cait Conley had attended a fundraiser hosted for her by former New York Gov. Eliot Spitzer, who resigned in 2008 amid a prostitution scandal.
But spokespeople in the congressional offices and campaigns for the other 14 candidates did not return requests for comment, underscoring the uncomfortable situation Republicans find themselves in as they seek to distance themselves from Miller without giving up any cash advantage in the final weeks leading up to the November elections.
Those staying silent now include Husted, who is facing a tough election against former Sen. Sherrod Brown. Husted said Miller should not run for reelection after Emily Miller — Max Miller’s ex-wife and fellow Ohio GOP Sen. Bernie Moreno’s daughter — accused her former husband of assaulting her and their young child.
Miller has denied the accusations. Spokespeople for his campaign and PAC did not respond to requests for comment.
Other Republican candidates who have remained quiet in recent days about whether they’ll give Miller back his money are Pennsylvania Reps. Rob Bresnahan, Ryan Mackenzie and Brian Fitzpatrick, as well as Iowa Reps. Zach Nunn and Mariannette Miller-Meeks.
They also include Reps. Nick Begich III of Alaska, Tom Barrett of Michigan, Juan Ciscomani of Arizona, Gabe Evans of Colorado, Tom Kean Jr. of New Jersey, Jen Kiggans of Virginia, David Valadao of California and Derrick Van Orden of Wisconsin.
Van Orden, asked Tuesday night about the $2,500 contribution he received from Miller during about an interview about the results of his state’s primary elections, refused to discuss the matter, calling the accusations against Miller “allegations” he had heard about “the day before yesterday.”
Miller will be the GOP candidate on the ballot this fall in Ohio’s 7th Congressional District after he rejected calls to get out of the race before a legal deadline this past week to replace him — forcing Republicans to support him if they want the party to hold onto the seat. Members of President Donald Trump’s political team also urged Ohio Republicans to hold off on a public pressure campaign to get Miller to drop out so as not to risk the party appearing ununified.
Polling now shows Miller trailing his Democratic challenger, Brian Poindexter, which could force the GOP to spend precious resources in a district that would otherwise be safely red — and possibly cost them a seat Trump won by double digits. Poindexter, a city councilmember and union ironworker, was added Tuesday to the Democratic Congressional Campaign Committee’s “red-to-blue” program, reserved for congressional candidates who are seen as standing a chance of flipping a Republican-held seat.
But Miller’s baggage may not be confined to his race alone. Some Democrats are already using the unreturned campaign donations as fodder to hammer Republicans running in other contests around the country.
“Ryan doesn’t care,” said Benny Stanislawski, communications director for Democrat Bob Brooks, in attacking Brooks’ opponent Mackenzie. “That’s who he is: open for business for whoever’s willing to pay up, no questions asked.”
Mike Marinella, a spokesperson for the National Republican Congressional Committee, in a statement Tuesday called Democrats “shameless hypocrites who conveniently look the other way when their vulnerable members are bankrolled by scandal-plagued Democrats like [former Rep.] Eric Swalwell.”
The NRCC also claimed that some of the Democrats who said they’d give away Swalwell campaign contributions have, in fact, not returned the money as promised.
“Nobody should take these slimeballs seriously when their supposed principles disappear the second they become politically inconvenient,” Marinella added of Democrats.
Unlike Miller, Swalwell resigned in April and ended his gubernatorial bid in California amid intense pressure from inside his own party over sexual assault allegations he denies.
Viet Shelton, a spokesperson with the DCCC, shot back that it is, in fact, Republicans who “spend all their time virtue signaling about how self righteous they are just to turn around and take dirty money from disgraced, disgusting, and abhorrent men … They should stop with the fake outrage.”
Some House Republicans continue to rally around Miller as the party seeks to hold onto its razor-thin majority: Just last week, Miller and Rep. Anna Paulina Luna (R-Fla.)filed a new joint fundraising committee with the FEC.
Lunasaid in a recent text message to POLITICO that she would not get in the middle of a private matter between the Millers. Tuesday night, she said the committee was “not active,” adding: “nothing more to it.”
Samuel Benson, Lisa Kashinsky, Madison Fernandez and Meredith Lee Hill contributed to this report.
Democratic lawmakers are readying aggressive oversight of Paramount Skydance’s bid to acquire Warner Bros. Discovery, and Paramount’s top lawyer said Tuesday the company is “happy to cooperate.”
“We’re not naive to know that politics does not exist,” Paramount Chief Legal Officer Makan Delrahim said. “We’re not shocked about that. We’ll be happy to cooperate and really engage with Republicans and Democrats about any issue and aspect. This merger is actually going to be good not only for California, it’ll be good for America.”
Paramount has been “transparent” and responsive to lawmaker’s concerns,” Delrahim — who served as Trump’s antitrust chief in his first administration — said at Blue Light News’s The California Agenda: Sacramento Summit.
The merger of the media companies has become a flashpoint for Democratic outcry, as the party outlines a range of grievances that could resurface as a sweeping oversight effort if they take control of one or both chambers of Congress next year. Top Democrats already insist Paramount CEO David Ellison and his company have been less than forthcoming.
Democrats have blasted Paramount’s $110 billion takeover of Warner Bros. Discovery as a gross antitrust violation with serious national security implications due in part to the involvement of foreign investment in the deal. And they have slammed Ellison for paying a $16 million settlement to President Donald Trump, which Sen. Elizabeth Warren of Massachusetts claimed could be “bribery in plain sight” in exchange for the administration’s approval of the company’s merger with Skydance last year.
Ellison also last week tried to tamp down Democratic concerns he would influence the independence of news network BLN after the deal, after Paramount’s takeover of CBS News last year led to outrage from journalists that leadership was pressing for more favorable coverage of the Trump administration.
California Attorney General Rob Bonta is leading 12-states in a lawsuit to block the company’s current merger with Warner Bros., and last week, a federal judge scheduled a March trial to decide whether the acquisition violates antitrust law. Paramount agreed to punt the merger until next year — precisely when Democrats hope to be back in power.
Rep. Jamie Raskin of Maryland, the top Democrat on the House Judiciary Committee, said in a statement to Blue Light News that Ellison “has evaded Congressional oversight of his work to create a mega-media empire designed to serve Donald Trump’s political agenda. If he thinks he can run out the clock on Congressional scrutiny of his massive media mergers and blockbuster corporate deals, he’s mistaken.”
Raskin called the investigation a “priority” and said “anyone involved should be prepared to answer under oath for their role in this brazen campaign to bend America’s free press to Donald Trump’s political, financial and personal will.”
Presented with Raskin’s statement, Delrahim said, “You can allege all you want. There is no corruption here.”
“We’d be happy to engage with Congressman Raskin and provide him, as we have, information,” Delrahim continued. “It sounds good, and I get it. It’s politics. But we respect his role and his important role in oversight. But just because he said so doesn’t mean that there is any corruption.”
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