The Republican-led Senate's plans for changing the House-passed One Big, Beautiful Bill Act (OBBBA, H.R. 1), which would extend Tax Cuts & Jobs Act (TCJA) provisions expiring at the end of 2025 and cut mandatory spending, are coming into greater focus. Following a White House meeting with Senate Finance Committee Republicans, there was more speculation about dialing back the House bill's state and local tax deduction (SALT) cap and greater uncertainty about Senators' plans to make permanent the House bill's temporary, five-year extensions of TCJA pre-cliffs on bonus depreciation, IRC Section 163(j) interest deductibility, and IRC Section 174 R&D expensing. Senators are also emphasizing their concerns about Inflation Reduction Act (IRA) energy tax credit rollbacks and education and charitable provisions.

Politico reported June 5: "Sen. Ron Johnson of Wisconsin, who was among the Senate Finance Committee Republicans to meet with Trump at the White House Wednesday, said the president told lawmakers it could be better for economic growth to make the provisions temporary, because that would provide a more immediate incentive for businesses to take advantage of them. 'He actually made a pretty good case for making them temporary to spur investment early on,' Johnson told reporters." However, Senator Steve Daines (R-MT), who said weeks ago that pro-growth provisions in the Ways and Means bill, focusing on the pre-cliff extenders, should be made permanent rather than only extended on a temporary basis, interpreted the President's position as being good with either approach.

The SALT cap issue seemed mostly resolved when House leaders struck a deal with high-tax state Republicans to increase the cap to $40,000 per household for incomes under $500,000 prior to the OBBBA vote, with the expectation that the deal would need to stick for a Senate-amended version to pass the House again. But Republican Senators, while aware of the political need for SALT cap relief in the House despite having no members of their own heavily invested in the issue, aren't yet on board with the level of relief in the House-passed bill.

Finance Committee Chairman Mike Crapo (R-ID) was cited as saying there are no Republican Senators from New York, New Jersey or California, and therefore little appetite "to do $353 billion for states that, basically, the other states subsidize." Similarly, Senate Finance member Roger Marshall (R-KS) said on Bloomberg TV, "This is basically a $350 billion subsidy for blue states," and that Senate leaders should consult House Speaker Mike Johnson (R-LA) regarding potential "wiggle room" on the bill's approach. Senate Majority Leader John Thune (R-SD) said in the Bloomberg Daily Tax Report, "There really isn't a single Republican senator who cares much about the SALT issue." It isn't clear how the provision may be trimmed, but high-tax state House members are warning a bill can't pass without the agreed-upon relief.

Senator Thom Tillis (R-NC), one of at least five Republican members with concerns about IRA energy tax credit rollbacks — the others are Lisa Murkowski (AK), John Curtis (UT), Kevin Cramer (ND) and Jerry Moran (KS) — was reported by Bloomberg Government as saying the Senate Finance Committee has a general consensus to soften some of the House provisions. "We have an agreement we have to change some of the ramp-down provisions," he said, adding proposals are still being discussed.

Politico reported Senator James Lankford (R-OK) as saying he may push for changes to the House proposals on university endowment taxes and excise tax on private foundations, while also advocating for the charitable non-itemizer deduction.

The Congressional Budget Office said the OBBBA would increase the deficit by $2.4 trillion over 10 years and require $550 billion in interest payments. There has been an undercurrent of concern about the deficit impact of the bill, but a story in today's Washington Post said some opposition appeared to soften following the White House meeting. The story cited Senator Ron Johnson as saying more significant deficit reduction could come in subsequent legislation. And it highlighted the fact that, even following House passage of the bill, there is a still a balancing act required in appeasing members, including those invested in the SALT issue. "If Trump and Republican leaders in Congress alter the bill to placate the moderates, they risk losing the support of budget hawks," the story said. "And if they increase cost-cutting measures to satisfy hard-liners, blue-state Republicans have threatened to sink the legislation."

Global tax — There continues to be attention on the House bill's new IRC Section 899, which would increase income tax and withholding tax rates and expand the application of the BEAT rules on foreign-parented groups, applicable to residents of countries with certain "unfair foreign taxes," including the undertaxed profits rule (UTPR) and digital services taxes (DSTs). The House has said the proposal wouldn't cover portfolio interest such as on Treasuries, but concerns over potential effects on foreign investment in the US persist. There was discussion about whether the proposal could run afoul of the reconciliation Byrd Rule if it was found to engage treaty issues that are under the jurisdiction of the Senate Foreign Relations Committee, which doesn't have a role in the reconciliation bill, but Punchbowl News reported that the Senate parliamentarian had ruled that the provision is under the purview of the Finance Committee.

Congress — The House Ways and Means Committee has scheduled a hearing with Treasury Secretary Scott Bessent for Wednesday, June 11 at 10 a.m.

The staff of the Joint Committee on Taxation released its Bluebook for the 118th Congress, which provides an explanation of tax legislation approved passed and signed into law and the estimated budget effects.

On June 4, Senator Bill Cassidy (R-LA) introduced a bill (S. 1938) to modify the amount of revenue transferred to Puerto Rico and the U.S. Virgin Islands, the "rum cover over," from the excise taxes collected on rum that is produced in or imported into the rest of the United States from the two US territories.