The Senate "Byrd bath" process with Republican and Democratic staff and the parliamentarian to determine if Finance Committee tax and health provisions of the Senate version of the One Big, Beautiful Bill Act (OBBBA) to extend Tax Cuts & Jobs Act (TCJA) provisions beyond 2025 meet revenue parameters required of reconciliation bills is set to begin today (Monday, June 23). Apart from the reconciliation rule review, open policy issues still must be resolved ahead of a potential Senate vote on the bill this week, related to Inflation Reduction Act (IRA) energy tax credit changes, the state and local tax (SALT) deduction cap, and Medicaid.

The Byrd bath and closing out negotiations with concerned Senators — and House members, given the goal of having the other chamber pass the eventual Senate bill as-is — will be pivotal for the reconciliation bill and the July 4 target for enactment, which some see as a more realistic target for just Senate passage. Of course, the discussion on Sunday political shows and in Congress and the nation generally over the weekend was largely focused on global events. Bloomberg Government reported that strikes on nuclear sites on Saturday "notably sidelined Congress just as [President Trump] needs Republicans lawmakers to unite around one thing he can't do without them: Pass his legislative agenda. Senate Republicans are still planning to move ahead this week with votes on Trump's massive tax and spending bill … a spokeswoman for Majority Leader John Thune, said Sunday."

There is the expectation that Senate consideration of the bill will begin in the coming days, setting up a potential vote on passage toward the end of the week or over the weekend. "Great unity in the Republican Party, perhaps unity like we have never seen before. Now let's get the Great, Big, Beautiful Bill done … " President Trump posted on social media June 22. Republicans can lose the votes of only three of their members to pass the bill in the Senate, and, as has been the case for weeks, multiple groups of members have concerns that threaten party unity on the bill, including on Medicaid, specific tax issues including SALT, and the overall fiscal implications.

Senate Republicans are set to meet as they return to Washington tonight. "Senate Republicans will receive an update on their tax-cuts plan on Monday evening … and they could take the bill to the floor as soon as Wednesday," a Semafor report said this morning. "Monday will be a key gut check for GOP leaders after a whirlwind of changes and ongoing negotiations aimed at passing the bill before the impending recess."

Late on June 21, the staff of the Joint Committee on Taxation released an estimate of the tax provisions of the Senate's substitute reconciliation bill released on June 16, reported relative to the Senate's current policy baseline. The estimate shows a $441.5 billion cost over 10 years, potentially leaving more room for additional SALT cap relief and perhaps other tax changes because the Senate Finance Committee was allocated $1.5 trillion in total tax cuts under the budget resolution.

Notably, the Senate's IRC Section 899 retaliatory tax provision would raise $52 billion, compared to the $116 billion House provision. Under the retaliatory tax plan included in the Finance Committee package, the increase in withholding tax rates of 5 percentage points per year would be capped at 15 percentage points, instead of the cap of 20% over the statutory rate or treaty rate in the House bill, and all the IRC Section 899 penalty provisions would be delayed until 2027. IRA tax credit and other energy changes would raise $476 billion. The 0.5% floor on the deduction of contributions made by itemizers and 1% floor on deduction of charitable contributions made by corporations are estimated to raise more than $80 billion.

Byrd rule challenges to the current policy baseline used by the Senate, which doesn't count the cost of making the TCJA expiring provisions permanent, are expected to be made by Democrats, who have also requested a current-law estimate of the bill. Chairman Mike Crapo (R-ID) issued a statement June 22 defending the approach, saying, "Extending the Trump tax cuts prevents a $4 trillion tax increase — this is not a change in current tax policy or tax revenue. This score more accurately reflects reality by measuring the effects of tax policy changes relative to the status quo."

The Senate Finance Committee language retains the current policy $10,000 SALT deduction cap as a placeholder for negotiations, instead of the $40,000 cap in the House bill (provided fully only for households with less than $500,000 in annual income). Senate Republican leaders want the House relief dialed back, arguing that it would provide a subsidy to Democratic-controlled states. Senator Markwayne Mullin (R-OK), a former House member himself, has held discussions with House members over retaining the $40,000 cap but lowering the income threshold. The Hill Newspaper reported that Reps. Mike Lawler (R-NY), Andrew Garbarino (R-NY), Young Kim (R-CA) and Tom Kean Jr. (R-NJ) were present on the call. "We're still working on a deal. We're still running numbers on things … " Senator Mullin said Thursday. "We're not there. … We're in a good spot. We're not in a final spot."

BGov reported this morning that the subject of "renewable energy incentives continues to divide the party as well, with some conservatives pushing for a faster phase out of tax breaks for wind, solar, nuclear, geothermal and hydrogen. Other senators are angling to keep the breaks in place for projects that have already begun."

Parliamentarian's rulings — Senate Republican and Democratic staff have already been holding a rolling series of Byrd bath meetings with the Senate parliamentarian, as Democrats try to strike provisions from the bill for not meeting the strict requirements of the fast-track budget reconciliation process, which allows legislation to pass in the Senate with a simple majority vote (vs. the 60 vote threshold required to advance most legislation in the Senate). On Friday morning (June 20), Democrats announced that the parliamentarian had struck several provisions drafted by Senate Banking Committee Republicans, including a move to defund the Consumer Financial Protection Bureau (CFPB) by zeroing out the budget it receives as a percentage of Federal Reserve profits, which the committee had estimated would save $6.36 billion. Also struck were provisions: 1) that would have reduced the pay of some Fed employees; 2) eliminating Treasury's Office of Financial Research, an independent bureau created by the Dodd-Frank Act to monitor risks on Wall Street; and 3) eliminating the Public Company Accounting Oversight Board (PCAOB), an auditing watchdog, and folding its responsibilities into the Securities and Exchange Commission (SEC). The rulings will require the Banking Committee to come up with new or modified reconciliation provisions to hit its $1 billion savings target. "My colleagues and I remain committed to cutting wasteful spending at the CFPB and will continue working with the Senate parliamentarian on the committee's provisions," Chairman Tim Scott (R-SC) said.

The cuts continued over the weekend, as the parliamentarian on Saturday morning disqualified Republicans' language requiring states to cover a portion of SNAP nutrition aid benefits that have high payment error rates, as well as a provision barring immigrants who are not citizens or lawful permanent residents from receiving SNAP benefits. Senator John Boozman (R-AR), who chairs the Agriculture Committee, said GOP senators would keep trying to find a way to cut Federal food assistance that complies with Senate rules. Then on Sunday, it was reported that the parliamentarian had also struck provisions in the bill limiting grant funding for "sanctuary cities," as well as: 1) language on state and local immigration arrests and 2) a provision that would have limited the ability of federal courts to issue preliminary injunctions or temporary restraining orders against the federal government by requiring litigants to post large bonds. In a win for Republicans, however, a provision that would block states from regulating artificial intelligence for10 years by denying them federal broadband build-out funds was preserved.

"President Trump's 'big, beautiful bill' is getting smaller just as Republicans head into a crucial week, after the Senate's rules arbiter decided several controversial provisions don't qualify for the special procedure the GOP is using to bypass Democratic opposition … " said a story in the June 23 Wall Street Journal. "One of the top measures that the parliamentarian said didn't fit, according to Democrats who publicized her decisions: a provision requiring states to pay a portion of food benefits, with their share increasing the more they mistakenly overpay or underpay beneficiaries. It isn't clear if Republicans plan to rework the measure to try to accommodate the parliamentarian's guidance."

The New York Times reported June 22: "A Senate official rejected on Sunday a measure in Republicans' sweeping domestic policy bill that could limit lawsuits seeking to block President Trump's executive actions. The measure would target the preliminary injunctions and temporary restraining orders issued by federal judges on Mr. Trump's directives. Those rulings have halted or delayed orders on a host of policies … "

Congress — The Senate is back in today with a vote 5:30 p.m. related to the nomination of Daniel Zimmerman to be an Assistant Secretary of Defense. Last week, Leader Thune took a procedural step (filed cloture) in relation to the nomination of Ken Kies to be Treasury Assistant Secretary for Tax Policy, setting up a potential vote as soon as this week.

The House is also back today with votes beginning at 6:30 p.m. on suspension bills under the jurisdiction of Foreign Affairs Committee, Financial Services Committee, and Energy and Commerce Committee, including the Global Investment in American Jobs Act of 2025 (H.R. 1679) to direct the Secretary of Commerce to conduct an interagency review of and report to Congress on ways to increase the global competitiveness of the United States in attracting foreign direct investment. Later in the week is a planned vote related to the appropriations process, on the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2026 (H.R. 3944).

There are two hearings in the House Ways and Means Committee:

• Health Subcommittee hearing on "Health at Your Fingertips: Harnessing the Power of Digital Health Data," on June 25 at 9 a.m.
• Joint Social Security and Work & Welfare Subcommittee hearing with the Social Security Commissioner, Frank Bisignano, on June 25 at 2 p.m.

An EY Alert, "Senate Finance Committee's proposals on Opportunity Zones differ from House proposals," is available here.