Congress
Business tax incentives will grow, SALT will be cut, Crapo tells senators
Senate Finance Committee Chair Mike Crapo told fellow Republicans in a Wednesday briefing that three major business tax provisions will be made permanent in the GOP’s megabill, senators who attended said, while a key break for individual taxpayers will be scaled back.
The pledge to restore larger tax deductions for research-and-development costs, business equipment purchases and interest on debt fulfills a major priority for Crapo and members of his panel, who consider them a major driver of economic growth.
But making the breaks permanent is costly, and it will require tradeoffs that could cause political problems as GOP leaders seek to finish work on the bill in the coming weeks. Crapo said one such move will be scaling back a House-brokered deal on the state-and-local-tax deduction.
GOP Sens. Steve Daines of Montana and John Hoeven of North Dakota, who have both pushed for the business tax cuts, confirmed Crapo’s remarks. “Yes, he did” guarantee business tax permanency, Hoeven said. “I’ve been adamant from the start, and he’s been adamant from the start.”
The House-passed version of the bill restores the trio of tax incentives through 2029; making them permanent would likely add hundreds of billions of red ink to the bill.
Permanency is mainly a Senate priority; President Donald Trump has signaled he’s fine with a short-term extension of the business tax cuts. To help offset the additional costs, Crapo is targeting a hot-potato House priority in the SALT deduction.
He told GOP senators he plans to cap SALT at a lower level than the $40,000 deal Speaker Mike Johnson cut with his own members. Blue-state GOP lawmakers are already raising warning bells over the plan, which Senate Majority Leader John Thune first outlined to POLITICO.
Crapo didn’t give a precise SALT number in the meeting, attendees said, but some GOP senators have floated going down to $20,000 while others are floating that they should offer the House the same $30,000 that Johnson initially offered to his holdout members.
“The House did $40,000; we’re going to do something less,” Hoeven said. “We know there’s a potential $350 billion there, but we haven’t settled on a number.”
The move on SALT is a blow to Johnson and other House Republicans who have urged Thune to make as few changes as possible to the House bill. While the Senate bill is likely to mirror large swaths of the House language, Crapo’s presentation is the most significant indication yet that the Senate will alter some of the most politically sensitive areas of the bill.
“I’m very, very concerned about what they might do on the SALT number and a number of provisions in the bill,” Johnson told reporters after the Senate meeting broke. “They need to hopefully modify it as little as possible.”
Responding to Crapo’s comments, Rep. Nick LaLota (R-N.Y.) said, “I can guarantee you: any bill that passes here will have a SALT provision of $40,000 or more.” Rep. Nicole Malliotakois (R-N.Y.) warned Senate Republicans are “running the risk of this entire bill imploding” if they alter the House SALT deal, adding that “they will be responsible for the largest tax hike on the American people.”
Crapo and Thune will meet with Trump at the White House on Thursday to walk him through the tax plan, said two people granted anonymity to describe the private plans. Crapo is also expected to brief the Senate GOP in greater depth early next week.
In addition to the tax language, Crapo is responsible for drafting the bill’s Medicaid provisions, and he gave considerably less detail about what changes he is eyeing there, senators said. Many of the GOP senators who have concerns about the bill’s handling of the program are not on the Finance Committee.
Sen. Susan Collins of Maine, who is seeking to protect rural hospitals in her state, told reporters after the meeting she’s “making some suggestions” on Medicaid tweaks but did not elaborate. Sen. Kevin Cramer of North Dakota added that “some of the Medicaid stuff is going to have to be scrubbed” and suggested it would be subject to further changes.
Lisa Kashinsky and Meredith Lee Hill 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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