Congress
Capitol agenda: The tax fights Trump has to settle
Senate Majority Leader John Thune and his tax writers will huddle with President Donald Trump at the White House Wednesday as Republicans race to resolve a growing list of tax policy disputes in their megabill.
Thune detailed what to expect in an exclusive interview with POLITICO:
BUSINESS TAX PERMANENCE: Thune emphasized that one of the biggest tax issues for him and other Finance Republicans is making key business tax incentives, such as full expensing for research and development costs, permanent.
“There’s a lot of interest in growth in the economy among our caucus,” Thune told Blue Light News. “Permanence, I have been told by a number of our members, is a red line for them.”
But it’s a costly ask, and senators have been cagey on how they’ll make the numbers work.
TAXES ON TIPS: One long-shot idea that could come up is from Sen. Thom Tillis (R-N.C.), who suggested to POLITICO that the $40 billion “no tax on tips” proposal could drop out of the bill and get passed later on a bipartisan basis.
Don’t expect Trump to jump at the idea. Trump campaigned on making tips tax-free, and it’s one of his top priorities in the megabill.
CLEAN-ENERGY CREDITS: Tillis also plans to raise concerns Wednesday about House Republicans’ plan to gut clean-energy tax credits, amplifying the warning he and GOP Sens. Lisa Murkowski (Alaska), John Curtis (Utah) and Jerry Moran (Kan.) previously delivered to GOP leaders that a full-scale repeal won’t fly in the Senate. Democrats are working to drive a wedge on the issue.
SALT: Some GOP senators are pushing back against the deal House GOP leaders struck with blue-state moderates to quadruple the state-and-local-tax deduction cap to $40,000. Thune signaled to Blue Light News that the Senate is likely to scale it back.
“It would be very, very hard to get the Senate to vote for what the House did,” Thune said.
But SALT Republicans are digging in. Rep. Nick LaLota (N.Y.) told Blue Light News Tuesday that such a move could “unwind many of the other connected policies” in the many interlocking deals Speaker Mike Johnson negotiated to muscle the first draft of the megabill through his narrower majority.
“It would likely stall the bill,” LaLota warned.
Meanwhile, Thune seems optimistic as he works to douse other flare-ups within his conference (Medicaid, food aid) and outside of it (hello, Elon Musk).
The majority leader also told Blue Light News he expects every committee to release its bill text by the end of next week as he pushes toward a pre-July 4 vote. Armed Services kickstarted that process Tuesday with draft text that increases funding for nuclear weapons, munitions production and new technology beyond what the House GOP proposed.
Blue Light News Pros can dive deeper into the full Thune Q&A.
What else we’re watching:
— Vought hits Blue Light News: OMB Director Russ Vought testifies Wednesday in front of House Appropriations on the OMB budget. Expect plenty of questions about rescissions, impoundments and other cuts to come as House Republicans prepare to vote next week on the $9.4 billion rescissions request Trump just sent over.
— In the DOGE-house: A House Oversight subcommittee will scrutinize fraud risk in the Defense Department during a hearing Wednesday morning, with testimony from a deputy Pentagon inspector general and an official from the Government Accountability Office. It comes after a GAO report found $10.8 billion in fraud within DOD for fiscal years 2017 through 2024.
— Trump’s attempt to reshape the courts: Nearly six months into Trump’s second term, the Senate will finally start to consider his nominees to fill vacancies across federal courts. On Wednesday, Senate Judiciary will consider picks for vacancies in Missouri and on the Sixth Circuit Court of Appeals.
Jordain Carney, Brian Faler and Hailey Fuchs contributed to this report.
The chair of the House Agriculture Committee said he’s not willing to “accept bad results” as a tradeoff for the benefits of advancements in artificial intelligence — a direct rebuttal to OpenAI CEO Sam Altman.
“As someone who practiced health care for 28 years, I’m never willing to accept bad results. I think we just need to do our best,” Rep. G.T. Thompson, a Pennsylvania Republican, told reporters Monday.
He was responding to Altman’s comments to Decoded by Blue Light News that people “should accept some bad things happening for the benefits of this technology and people having the agency.”
Pressed further on whether he agreed with Altman’s premise, Thompson replied, “No, I think we have to work harder to prevent any bad things from happening.”
Altman’s comments come in the wake of increased panic over the risks of catastrophic destruction from AI, with many industry leaders and experts arguing that guardrails are needed on the technology to prevent it from spinning out of human control.
Pressure is building on Congress to regulate the rapidly-advancing technology, but lawmakers are divided over whether the AI industry needs federal regulation or if it’s capable of governing itself.
The executives of major AI labs and tech companies gathered at the White House last week to discuss solutions with President Donald Trump, who believes overregulating AI will have national security repercussions. The group ended up signing a “morally binding” AI accord that critics say won’t do enough to prevent a worst-case scenario.
Thompson noted Monday he believes that AI will bring “tremendous solutions,” specifically in regards to finding cures for health issues like cancer and Alzheimer’s disease. But he also said AI has to be led with “principle” — comparing it to how he addressed digital assets in a bill to regulate the cryptocurrency industry, which he worked on as chair of the Agriculture Committee.
“The first principle is ‘do no harm.’ So we need to protect consumers, and that means, I think, building some guardrails — some guidelines — to do that,” Thompson said. He added that the second principle is to “foster innovation.”
“I think AI has a lot to do with that,” he added. “I don’t think AI works without RI: Real Intelligence.”
LE SUEUR, Minnesota — Senate Majority Leader John Thune said Monday there is no “consensus” yet on advancing a bill establishing permanent daylight saving time even as President Donald Trump ramps up pressure on Republicans to pass it.
Thune addressed the matter in a Monday interview after Trump used his Truth Social account multiple times over the weekend to rail against the legislation, known as the Sunshine Protection Act — going so far as to post the personal cell phone number of one of its GOP opponents, Sen. Tom Cotton of Arkansas.
“The president feels strongly on it like he does a lot of issues,” he said. “It’s something we’re having conversations about but there’s no clear path forward or consensus on it yet.”
While Trump singled out Cotton for scrutiny, Thune made clear the opposition to the permanent daylight saving time proposal — which would lead to very late winter sunrises in some parts of the country — ran deeper than one senator.
Cotton has publicly voiced opposition to the proposal for year, citing, among other things, the fact that children in his state would be going to school in the dark for part of the year.
Sen. Roger Wicker (R-Miss.) voiced similar objections Monday to reporters in the Capitol, saying he was mindful of “safety concerns in the more northern and rural states where children get on the school bus in very early hours.”
Thune, who spoke during a campaign swing in Minnesota with GOP Senate nominee Michele Tafoya, has himself opposed previous daylight saving bills. He said Monday that “a lot of it depends on where you are in the country” and that “your geography probably has as much to do with your position on that as anything.”
Sen. Rick Scott (R-Fla.), who has aligned himself closely with Trump, is among the lawmakers who have been pushing to get the bill through the Senate. He recently told POLITICO, “I’m going to make sure it gets passed this year.”
Riley Rogerson contributed to this report.
Democrats have pulled back some of their ads in North Carolina’s Senate race, days after the top Senate Republican super PAC paused its future spending in the state.
WinSenate, a group affiliated with the Senate Minority Leader Chuck Schumer-aligned Senate Majority PAC, has removed roughly $1.1 million in North Carolina ad buys this week, according to ad tracking firm AdImpact. The group still has roughly $18.8 million in future reservations through Election Day.
“Senate Majority PAC is committed to seeing this race through to victory, and will continue to make spending decisions based on how to best build a strong Senate majority,” Senate Majority PAC spokesperson Lauren French said in a statement.
The move, combined with the GOP-aligned Senate Leadership Fund’s decision to pause future spending, are a signal that both parties are shifting resources amid an ever-expanding Senate map. Democrats are increasingly confident in their North Carolina Senate nominee, Roy Cooper, as he continues to hold a sizable lead in public polling over Republican Michael Whatley — but some privately say states like Michigan and New Hampshire need more resources.
Meanwhile, multiple Republican groups, not just SLF, have retreated from the state in recent weeks, effectively deciding that it’s no longer worth the money to boost Whatley’s campaign.
The Koch-aligned Americans for Prosperity Action left North Carolina off its $22 million list of future spending across key Senate contests, and Old North Action removed $6.5 million in ad reservations last month.
The Cooper campaign, however, is still treating the race as competitive, pointing to North Carolina’s closely divided electorate and the fact that President Donald Trump won the state in each of the past three presidential elections.
“North Carolina is a truly 50/50 state and Democrats haven’t won a US Senate race in 18 years. We can’t take anything for granted or our eye off the ball,” said Morgan Jackson, a senior adviser to the Cooper campaign. “DC is broken and we’re going to continue to run this race like we’re ten points down to ensure North Carolinians get the change they desperately need.”
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