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.”
Congress
Sen. Rand Paul sees ‘cultural cover-up’ about Trump shooting last July
One year after a shooter injured then-candidate Donald Trump at a rally in Butler, Pennsylvania, Sen. Rand Paul called for congressional oversight of the Secret Service, complaining of a “cultural cover-up” that he claimed masked critical security failures before the attack.
The Kentucky Republican, chair of the Homeland Security Committee, told CBS’ Margaret Brennan on “Face the Nation” that “somebody was begging” for security in both writing and phone calls but was repeatedly denied resources by the Secret Service.
“They did not want to assess blame or look internally, and they wanted to discount any of their actions that may have led to this,” Paul said. “There was no way the director of the Secret Service did not know the request had been made.”
The breakdown in security led to Trump’s ear being grazed by one of the bullets. Fire chief Corey Comperatore was killed, and two others were wounded before a Secret Service sniper fatally shot 20-year-old Thomas Crooks. Former President Joe Biden called for investigations into the Secret Service soon after the deadly incident, and at least one found “deep flaws” in the organization. Meanwhile, congressional Republicans accused the former director of the Secret Service, Kimberly Cheatle, of lying under oath when she denied that those requests existed, a point Paul repeated Sunday.
A new report from the Senate Committee on Homeland Security and Governmental Affairs found that the Secret Service had “denied or left unfulfilled at least 10 requests” for additional resources for Trump.
Sen. Tom Cotton (R-Ark.) in a separate interview on Sunday blamed the Biden administration for the security failure.
“The report from the [Government Accountability Office], as well as the Senate reports, indicate that there were serious failures in communications and the allocation of resources,” Cotton said on “Fox News Sunday.” “Under the Biden administration, the Secret Service simply was not responsive to the request not only of the Trump campaign, but the head of his security detail, Sean Curran, who is now the head of the Secret Service as well.”
Paul said that regardless of party identification, the rallies posed “extraordinary risk” for their sheer size. Such events, he added, require a lot of detailed planning and organization.
But when individuals were subpoenaed, Paul said, “no one would actually admit to being in charge of security for Butler.”
“They were not going to discipline anybody until I subpoenaed and asked what they had done, but in the end, nobody was fired,” Paul said. “I think even the investigation by the Secret Service was inadequate. That’s why we need congressional oversight.”
Congress
The 5 big questions about the Senate battleground map
The battle for the Senate won’t be decided for another year and a half. But the key questions that will determine who wins the upper chamber are beginning to come into focus.
For Democrats to flip the chamber, everything needs to go right. They have to net four seats, and a wave of retirements earlier this year is expected to make a handful of Democratic-held seats more competitive. There are also relatively few openings for the party to make pickups — only two of the 22 Republican seats up for reelection next year are in states President Donald Trump either lost or won by less than 10 points in 2024.
Yet Democratic leaders have projected confidence, fortified by the retirement of Sen. Thom Tillis (R-N.C.) shortly after he broke with Republicans over concerns about their signature legislative accomplishment.
Here are the five biggest questions still hanging over the Senate race:
Can Democrats get their dream recruits?
Democrats are holding their breath for Roy Cooper and Janet Mills to decide if they’ll run for Senate in North Carolina and Maine — a former and current governor, respectively, who could dramatically improve their party’s chances to flip those swing seats. Their outstanding decisions have frozen recruitment in both states, signaling the party’s strong preference for them.
The odds look better for Democrats in North Carolina, where Cooper’s top political strategist told POLITICO earlier this month that the former governor was “strongly considering a run” and “will decide in the coming weeks.” North Carolina Democrats have argued that Cooper’s aw-shucks brand coupled with his strong fundraising network would instantly transform the now-open race.
Tillis announced that he was not running for reelection last month after clashing with Trump over his tax-and-spend megabill. That “puts a lot more pressure on Cooper to run,” said Democratic state Sen. Jay Chaudhuri, as he is “heads and shoulders above every other candidate.”
But Cooper hasn’t cleared the field yet. Former Rep. Wiley Nickel entered the Senate primary in April, and he demurred when asked if he’d exit if Cooper jumped in. Rep. Don Davis is also eyeing the race.
Republicans have yet to see a major candidate step up, although the president’s daughter-in-law Lara Trump has expressed interest.
National Democrats are still working to woo Mills, but her interest in challenging Sen. Susan Collins is less clear. Mills, who is 77 and won reelection in 2022 by 13 percentage points, told a Maine outlet in April that “I’m not planning to run for another office” but added that “things change week to week, month to month.”
Jordan Wood, the former chief of staff to former California Rep. Katie Porter, has already raised $1 million in his bid against Collins. But some Maine Democrats are concerned that the race hasn’t yet attracted bigger name contenders.
Can a bloody Republican primary in Texas put the state on the map in November?
Republicans have a messy — and expensive — primary on their hands down in Texas.
Senate Majority Leader John Thune discussed the high-stakes intraparty brawl with Trump — as part of a broader discussion on the 2026 midterm map during a recent White House meeting — where state Attorney General Ken Paxton is primarying Sen. John Cornyn.
GOP leaders have been privately trying to sway Trump for months to back Cornyn, arguing that his conservative bona fides match the president’s agenda and he would be a safer bet in November.
Cornyn got a break after Paxton’s wife announced she was filing for divorce on “biblical grounds,” with his allies quickly seizing on the news. And he was able to get in some face time with Trump on Friday when he traveled with the president back to Texas.
But so far, Trump appears poised to remain on the sidelines for a while longer as polling has shown Cornyn consistently trailing Paxton in a primary. Rep. Wesley Hunt, who is also mulling a Senate run, traveled with Trump on Friday as well.
Asked whether he was concerned about Cornyn’s standing, Thune told reporters Thursday, “We’re working on it.”
Democrats believe, and some Republicans fear, Paxton would be a weaker general candidate that could finally put the Lone Star State in play. Former Rep. Colin Allred is already in the race, but Democrats could face their own packed primary.
Who will Republicans run in Democratic-held battlegrounds?
Democrats have two super-competitive Senate seats to defend — and losing either could all but extinguish their dream of retaking control of the Senate.
Georgia Gov. Brian Kemp struck a blow to Republicans’ hopes of defeating Democratic Sen. Jon Ossoff when he passed on a Senate bid in May.
Now, Republicans face a potentially messy primary, as several potential candidates eye a bid to challenge Ossoff, who already has a $15 million head start in fundraising. Rep. Buddy Carter is already in, and other members of Congress are considering a run, including Rep. Rich McCormick and Rep. Mike Collins.
Kelly Loeffler, the former senator and current head of the Small Business Administration who lost to Sen. Raphael Warnock in 2020, wouldn’t rule out another Senate bid when asked earlier this year. Secretary of Veterans Affairs Doug Collins, who also ran in the state’s Senate primary in 2020, has also not ruled out a Senate bid.
One potential wild-card candidate has passed on running: Rep. Marjorie Taylor Greene, the controversial firebrand and close Trump ally.
Unlike in Georgia, Republicans have successfully recruited their top candidate in Michigan, where Democratic Sen. Gary Peters made a surprise retirement announcement earlier this year. Former GOP Rep. Mike Rogers decided to take another shot at winning an open Michigan Senate seat after he lost out to Sen. Elissa Slotkin last year.
All eyes are now on Rep. Bill Huizenga, who is openly weighing a Senate run despite Republicans’ worries about a competitive Senate primary and the fate of his battleground House district.
Democrats are grappling with their own competitive primary in Michigan, as progressive former Michigan public health official Abdul El-Sayed, Michigan state Sen. Mallory McMorrow and Rep. Haley Stevens jockey for position.
New Hampshire is also an open-seat race in a Democratic-held state, but Democratic Rep. Chris Pappas starts as the favorite over former Massachusetts Sen. Scott Brown, both of whom appear for now to have a straight shot to the general election.
Is there even a fourth state for Democrats to capitalize on?
Democrats believe they’ll have strong national headwinds by next November, but they are still facing a difficult mathematical reality.
To flip the chamber, Democrats have to net four seats. But they have only two clear pick-up opportunities right now: North Carolina, especially if Republicans shift further to the right in their primary, and Maine.
Beyond that the map gets exponentially harder: Sen. Joni Ernst is mulling retiring in Iowa, which would give them an open race in a state where House districts are increasingly competitive. But some Democrats believe their chances would be better if Ernst was on the ballot, especially after she opened herself up for attacks by saying “we all are going to die” to an angry constituent concerned about potential Medicaid cuts.
Schumer recently had dinner with former Sen. Sherrod Brown (D-Ohio), who is quietly mulling a comeback bid against Sen. Jon Husted, the Republican who was appointed to fill now-Vice President JD Vance’s seat. But many Democrats believe Brown is more likely to try to run for governor than return to his old stomping ground.
The pickings get slimmer elsewhere: Democrats will try again for their white whale of Texas, and Florida Democrats are desperate to show any signs of life in a one-time battleground that has become a dark shade of red.
In Nebraska, in-state Democrats are blessing, but not formally endorsing, independent candidate Dan Osborn’s second Senate bid, though Republicans are confident he won’t be able to catch them off guard after a close call last year.
Can Democrats weaponize Trump’s megabill successfully?
Democrats have spotted an opportunity to go on offense after Republicans passed their sweeping domestic-policy bill earlier this month. The bill polled unfavorably as it came together — particularly the cuts to Medicaid — even as significant percentages of voters across several surveys said they knew little about its contents.
“It’s going to raise insurance costs even if you don’t have Medicaid,” Senate Minority Leader Chuck Schumer told The New York Times on Thursday about Democrats’ message on the megabill. “Your electricity costs will go up by 10 percent. Even not poor people, it goes across the board. And it’s hitting at the same time that your costs are going up because of tariffs.”
Some Republicans in Congress acknowledge they’re concerned about the political consequences of their landmark legislation.
“You would be foolish not to worry about it,” Sen. Jim Justice (R-W.Va.) told Blue Light News shortly after the bill passed. “If you don’t keep the voters right with you, you’re going to awaken to a bad, bad, bad day.”
The White House is pushing polling suggesting some parts of the bill — implementing work requirements for Medicaid recipients and eliminating taxes on tips — could be part of a winning message next year.
TV ads across the nation will soon help determine who was right.
Congress
Trump threatens to withhold endorsements for GOP senators who don’t back rescissions bill
President Donald Trump is threatening to withhold endorsements from Republican senators who don’t support the administration’s effort to claw back $9.4 billion of congressionally approved funds.
Trump said in a social media post Thursday that the proposed cuts — in particular the $1.1 billion to come from public media — are “very important” to him. His statement comes as some in the Senate have raised objections to the rescissions bill, including Senate Appropriations Chair Susan Collins of Maine, who faces reelection next year.
“It is very important that all Republicans adhere to my Recissions Bill and, in particular, DEFUND THE CORPORATION FOR PUBLIC BROADCASTING (PBS and NPR), which is worse than BLN & MSDNC put together,” Trump wrote in the social media post. “Any Republican that votes to allow this monstrosity to continue broadcasting will not have my support or Endorsement.”
The Senate is expected to vote on a rescissions package next week ahead of a July 18 deadline.
Some senators have suggested amendments to eliminate certain spending cuts, including those targeting public media. Alaska Sens. Lisa Murkowski and Dan Sullivan along with Sen. Mike Rounds of South Dakota have said they want the package amended to preserve funding for NPR and PBS stations.
Collins has expressed disapproval of cuts to global AIDS prevention funding and other health programs. She spoke at the Senate GOP’s conference meeting on Wednesday as the party discussed possible tweaks to the package.
Republicans can only afford to lose support from three senators before relying on Vice President JD Vance to cast a tie-breaking vote on the bill.
Any amendments made by the Senate will need to be approved by the House again before July 18 or else Congress would be required to spend money appropriated to the targeted programs.
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