Please see our note on the week ahead – the most consequential week in the Senate this year to date.
Pivotal Week Ahead in the Senate
The Senate will vote Monday evening to invoke cloture on Daniel Zimmerman to be Assistant Secretary of Defense for International Security Affairs. Leader Thune also filed cloture on Paul Dabbar, Deputy Secretary of Commerce, and Ken Kies, Assistant Secretary of the Treasury. All three nominees will be confirmed this week. The focus of the week, however, will be finalizing the reconciliation bill so that floor action can begin mid- to late-week.
Byrd Bath Meetings Continue into This Week
Bipartisan meetings with the Senate Parliamentarian have been proceeding apace committee by committee, with one big one left to do: the bipartisan Byrd Bath for the Finance Committee text will occur tomorrow, June 23. Through the previous bill titles, Democrats have had some successes, as expected, arguing to the parliamentarian that certain provisions are not compliant with the Byrd Rule and are therefore subject to a 60-vote point of order on the floor.
Notably, the Senate Agriculture Committee has lost a big chunk of its SNAP savings, having lost a ruling on language increasing certain state cost shares; the Agriculture Committee Republicans are working on new language in an attempt to pass Byrd muster. On the other hand, in a bit of a surprise, the Senate Commerce Committee’s language making BEAD funding contingent on state AI moratoriums was ruled to be compliant with the Byrd rule. This language is still likely to face opposition from a bipartisan coalition on the Senate floor, and its fate remains uncertain. Importantly, we do not believe any of the Byrd decisions thus far change the trajectory of Senate action for this week.
Reconciliation Bill Release and Floor Action
As the final meetings are conducted, Senate Republicans will prepare their legislation for floor action; they may introduce the consolidated reconciliation bill before proceeding to it on the floor. We expect Leader Thune to move to proceed to the reconciliation bill by mid-week, likely on Wednesday; a simple majority vote is required to advance to it. Once the Senate proceeds to the bill, we expect Leader Thune to introduce a Manager’s or Substitute Amendment incorporating text from all ten Senate committees that received reconciliation instructions from the budget resolution; making necessary changes based on the “Byrd bath” to remove some or all of the provisions ruled out by the Senate Parliamentarian (including deleting the provisions listed below); and various other changes needed to secure 50 votes, including on Medicaid.
There will be up to 20 hours of debate on the resolution although Republicans may yield back some of their time. Following debate, the “vote-a-rama” process will begin, during which Democrats will offer dozens of amendments on a litany of political issues including Medicaid, SNAP, and tax. While most Republicans will not offer amendments to the reconciliation bill, it is possible some conservative members may push for votes. Amendments must be germane and comply with reconciliation rules; if they do they are subject to a simple majority threshold for adoption.
It is also possible that Leader Thune might offer a so-called “wraparound” amendment at the tail end of the vote-a-rama to incorporate any additional necessary changes before final passage. This final amendment could delete any problematic amendments if any are adopted during vote-a-rama, or make adjustments needed to ensure that the bill can both pass the Senate and clear the House without further amendment (which remains Leadership’s preferred path). Following the vote-a-rama, passage of the reconciliation bill is a simple majority threshold.
JCT Score of Finance Committee Text
The Joint Committee on Taxation (JCT) released its score of the Senate Finance Committee draft text, without Medicaid savings included, projecting a net $442 billion deficit increase relative to a current policy baseline that assumes the extension of expiring TCJA tax provisions and 40% bonus depreciation. The score illustrates how the Finance Committee text both reduces the size of Trump priorities relative to the House-passed bill and softens the hit of other taxes from the House-passed bill:
- No tax on overtime: $89 billion ($124 billion in House)
- No tax on tips: $31 billion ($40 billion in House)
- No tax on auto loans: $31 billion ($58 billion in House)
- Sec. 899: $52 billion ($116 billion in House)
- Remittance tax: $1 billion ($26 billion in House)
- Endowment tax: $4 billion ($16 billion in House)
- Sec 199A: $6 billion at 20% ($104 billion at 23% in House)
While less onerous than the House bill, the Finance tax title still raises nearly $500 billion over 10 years, terminating or phasing out the green energy incentives from the Inflation Reduction Act (IRA).
Committee Provisions Ruled Subject to a 60-Vote Byrd Rule Point of Order (Not Including Finance)
Judiciary
- Appropriation: Eligibility. This subparagraph limits certain grant funding for “sanctuary cities,” and where the Attorney General disagrees with states’ and localities’ immigration enforcement. (Section 154, Paragraph 5, Subparagraph C)
- Bridging Immigration-Related Deficits Experienced Nationwide Reimbursement Fund. Language in this section gives state and local officials the authority to arrest any noncitizen suspected of being in the U.S. unlawfully. (Offending language in Section 155)
- Restriction on Enforcement. This section limits the ability of federal courts to issue preliminary injunctions or temporary restraining orders against the federal government by requiring litigants to post a potentially enormous bond. (Section 203)
- Limitation on Donations Made Pursuant to Settlement Agreements to Which the United States is a Party. This section limits when the federal government can enter into or enforce settlement agreements that provide for payments to third parties to fully compensate victims, remedy harm, and punish and deter future violations. (Section 301)
Commerce, Science, and Transportation
- Fire Damaged Pier. This section appropriates $250 million to Coast Guard stations significantly damaged by fire in 2025, which can only refer to one on South Padre Island, Texas. (Section 0001(a)(10)(E))
- NASA Space Vehicle Transfer. This section appropriates $85 million to transfer the Space Shuttle currently on display at the Smithsonian Air & Space Museum to a nonprofit in Houston, Texas. (Section 0005)
Agriculture, Nutrition, and Forestry
- Matching Funds. This section mandates that states cover a portion of SNAP benefits with the state share escalating with payment error rates. (Section 10105)
- Alien SNAP Eligibility. This section removes SNAP eligibility for immigrants who are not citizens or lawful permanent residents, with certain exceptions. (Section 10108)
- Suspension of Permanent Price Support Authority. This section extends the suspension of permanent price support authority, which has traditionally been addressed in the Farm Bill. (Section 10314)
Banking, Housing, and Urban Affairs
- Funding Cap for the Consumer Financial Protection Bureau. This section cuts $6.4 billion by reducing the CFPB’s maximum funding to 0% of the Federal Reserve’s operating expenses, eliminating the agency. (Sec. 30001)
- Pay and Benefits of Employees of the Federal Reserve System. This section cuts $1.4 billion by reducing the pay of Federal Reserve staff. (Sec. 30002)
- Financial Research Fund. This section cuts $293 million by reducing the Office of Financial Research funding. (Sec. 30004)
- Transfer of Public Company Accounting Oversight Board. This section cuts $771 million to eliminate the PCAOB and transfers its authority to the Securities and Exchange Commission. (Sec. 30005)
Environment and Public Works
- Funding Repeals. These sections repeal statutory authorizations for Inflation Reduction Act programs and rescind funds. The repeals of authorizations, but not the rescissions, violate the Byrd Rule. (Secs. 01 and 03-25)
- Repeal of Multipollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles. This section repeals EPA’s rule that sets limits on the air pollution emissions of passenger vehicle models manufactured, sold, or operated in the United States. (Sec. 27)
- Judicial Review portion of Project Sponsor Opt-In Fees for Environmental Reviews. This subsection allows environmental projects to skirt judicial review if they pay a fee. (Sec. 28)
Armed Services
- Multi-Year Operational Plan. This section reduces appropriations to the Department of Defense if spend plans are not submitted on time. (Sec. 20014)
OUTLOOK/ANALYSIS. This will be the most consequential week in the Senate this year as Leadership attempts to lock down final deals, drafts and scores, and pass its version of the One Big Beautiful Bill by Friday, ideally in a form that the House can pass without further changes. We expect the Senate’s individual SALT provision – currently limited to a $10,000 deduction – to change through the process to reflect an agreement that House Republicans can live with.
Much has to come together in a short time for both Senate and House passage prior to July 4, but in recent history that has been true for virtually every major bill that has ultimately been enacted. The pressure to move legislation is great and we believe there will be votes to support Senate passage.
While it is true that some members are disappointed that finding political consensus with a narrow majority means there won’t be several trillion more in spending cuts, it is also true that virtually all GOP Senators support extending current tax law and pairing it with the largest mandatory spending reduction in modern history. We think at least 50 Senators will vote for what is in the bill rather than against the bill for what is NOT included.
Our base case remains Senate passage late this week, but we expect the Senate to stay in town until an eventual agreement is reached, whenever that may be. Timing on a House vote will depend on whether or not the Senate’s timeline holds.
###