Congress
Capitol agenda: ‘No tax’ fever hits Congress
Special tax carve-outs for everyday Americans are suddenly all the rage in Congress.
What began with President Donald Trump’s signature tax cuts has sprung copycats, with lawmakers from both sides of the aisle proposing breaks on virtually everything — from boat loan interest to selling New Jersey swag.
“Must be an election year,” Rep. David Schweikert, a retiring tax writer.
It’s all part of lawmakers’ push to show they’re responding to voters’ affordability concerns ahead of the midterms, despite the mixed reviews for last year’s GOP tax cuts — even from Trump supporters.
The slew of targeted tax break proposals are modeled and named after some of the best known provisions of Republicans’ One Big Beautiful Bill Act, with titles like “No Taxes on Utility Bills” and “No Tax on Health Care.”
Still, they’ve spurred frustrations from some conservatives over clogging the tax code with smaller, specific changes, while progressives worry the breaks eat into funding dollars they’d like to see go elsewhere. And fiscal hawks have sounded off on concerns over shrinking the tax base while the U.S. has a sky-high deficit.
None of this is set to go away anytime soon, tax experts say, as provisions from the megabill are poised to expire in 2028. That leaves lawmakers with an opportunity to extend and create more special exemptions in addition to the tax breaks on tips, overtime, seniors and car-loan interest.
“These policies elicited eye rolls with Republicans while they were crafting the tax bill — these were just Trumpist favors they had to include before getting to the real tax cuts,” said Jessica Riedl, a former Republican tax aide now at Brookings Institution. “Over time, Republicans have increasingly embraced this kind of stuff. I don’t think this is a temporary trend.”
Plus, for Democrats, there’s the exemptions that possible 2028 hopefuls have been looking to enact, from Sen. Jon Ossoff’s proposal to temporarily allow farmers to shield crop payments from taxes to Sen. Chris Van Hollen’s plan to strike everyone earning less than $46,000 from paying federal income taxes.
And both parties recognize that allowing the breaks to lapse during a presidential election year could be a risky gambit.
“I don’t know what they think is going to happen,” said Bob Lord, a vice president at Patriotic Millionaires, a group of wealthy individuals who support higher taxes, who helped devise Van Hollen’s plan. “If they do away with no tax on tips, well, they can kiss the state of Nevada goodbye.”
What else we’re watching:
— FIRST IN IC: FLANAGAN TALKS SCHUMER, PANELS: Democratic Senate hopeful Peggy Flanagan — fresh off her primary victory in Minnesota Tuesday —said she’d pursue many of the same committee assignments as predecessor Sen. Tina Smith if elected. “This particular seat has a long track record of serving on the Indian Affairs Committee,” Flanagan, who would be the first Native American woman elected to the chamber, said, adding she “would look forward to serving on that committee and bringing my lived experience and work in strengthening tribal government relations to that table.” Flanagan also flagged Agriculture, Banking and Health, adding “there are a lot of priorities for Minnesotans that go right through that committee.” Flanagan also declined to back Chuck Schumer as the party’s leader should Democrats retake the chamber, saying she was “grateful” for his work but, “I think it’s time for us to have a new voice in that role.”
— REPUBLICANS TRY TO KEEP THEIR FRAUD FIGHTING DREAMS ALIVE: House Republicans are hoping Vice President JD Vance’s personal appeal to the conference to tackle alleged abuse of safety-net programs will push the issue back to the forefront of the GOP’s already-long priority list. But many are skeptical any such legislation will ultimately reach the president’s desk. Finding ways to cut government waste and fraud across Medicare, Medicaid and federal food assistance programs was a top priority for House Republicans, who set out earlier this year to pass another party-line reconciliation package centralizing the effort. Many believed the fraud issue would speak to voters’ larger concerns about affordability, since it would ostensibly involve returning lost funds to government programs.
Brian Faler, Mia McCarthy and Robert King contributed to this report.
Sen. Ron Johnson is sending a letter Monday requesting a conference meeting to discuss the midterm results and a delay in the leadership election.
Johnson has gathered enough signatures to force the meeting under the Senate GOP’s rules and is proposing the gathering for 9 a.m. Tuesday.
“Tuesday’s result was a stunning defeat,” Johnson and his backers write in the letter to Conference Chair Tom Cotton (R-Ark.), a copy of which was obtained by POLITICO. “Holding leadership elections without engaging in a robust discussion and evaluation of how those running for leadership intend to lead would be political malpractice”
Republicans still expect their leadership election to be held Tuesday, where Majority Leader John Thune is so far unopposed to lead the party next year in the minority.
Sen. Chris Murphy announced Friday that he has been released from the hospital after suffering a stroke last week, but will miss “several weeks” of Senate votes while he continues to recover.
“The doctors are very encouraged by the progress I’ve made so far,” the Connecticut Democrat said in a statement. “In order to take my recovery seriously and get back to work on the quickest timeline possible, I will be spending several weeks at a rehabilitation center after being discharged from the hospital today.”
He added that he remains in touch remotely with his staff and colleagues.
Murphy, who was hospitalized last weekend, said Friday that he was “diagnosed with a small bleed in the thalamus region of my brain.” Jose Suarez, the Chief of Neurosciences Critical Care at The Johns Hopkins Hospital, said in a separate statement released by Murphy’s office that the senator “experienced a small hemorrhagic stroke.”
“He has shown tremendous progress, and at the current rate of improvement, we expect that he will make a full recovery following rehabilitation,” Suarez added.
Murphy is the latest senator to suffer a stroke in recent years. Sens. Chris Van Hollen (D-Md.) and Ben Ray Lujan (D-N.M.) were both hospitalized for strokes in 2022. Sen. John Fetterman (D-Pa.), at that time a Senate candidate, also had a stroke in 2022 that he later described as near fatal.
The head of the Congressional Progressive Caucus said his group will still be power brokers in a massive Democratic majority in a strategy memo previewing plans for next term.
“While some in the press have speculated that a majority of this size undermines our influence within the caucus, they have it exactly backwards,” Rep. Greg Casar of Texas said in the Friday memo obtained by Blue Light News. “Big majorities are good for getting big things done. Our goal is not to win a battle against other Democratic caucuses. It is to pass longstanding progressive priorities that bring down costs, root out corruption, and boost wages.”
The CPC will have at least 105 members next term, according to the memo. If Democrats had a narrow majority, progressives — and any other faction in the caucus — could have used their votes as leverage. Now that presumptive speaker Hakeem Jeffries will have as many 30 votes to spare, Democrats broadly are recalibrating their approach next term.
Casar laid out a “three-pronged” strategy for the CPC to “wield our power” in the three-page memo — tackling legislation, oversight and “holding Donald Trump to his word on populist economic policies.”
“Small majorities give corporate special interest groups the ability to block popular populist policies by recruiting a small number of opponents; a big majority gives us the advantage,” he said.
Casar previewed how the CPC can engage with Trump, noting that “one of the few bright spots for bipartisan lawmaking” was a housing bill that banned private equity firms from buying homes. He noted the caucus should push Trump to cap credit card interest rates, lower credit card fees for small businesses and lower prescription drug costs.
“While we oppose [Trump] strongly on the vast majority of fronts, we should send bills to his desk that would lower prices and raise paychecks. If he signs them, good. If he vetoes those bills, that will propel us to a continued Democratic majority and a trifecta where a Democratic president can sign these proposals into law,” he said.
Casar also outlined oversight targets beyond the administration, urging Democrats to specifically investigate corporations that use customer data for “surveillance pricing,” health care companies that are “taking advantage of seniors” through the Medicare Advantage program and artificial intelligence labs who are “putting jobs and lives at risk.”
“By focusing not just on the Trump administration but also on big corporations and billionaires, we will show the American people we are not just anti-Trump but also pro-worker and pro-consumer,” he said.
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