Bessent, congressional Republicans kickstarting tax cut talks

Treasury Secretary Scott Bessent and congressional leaders will begin meeting weekly as Republicans look to shape a tax cut package with a year-end deadline, according to people familiar with the matter.

The meetings, which will start this week, will include key Republican leaders, including House Speaker Mike Johnson, Senate Majority Leader John Thune, and Senator Mike Crapo and Representative Jason Smith, who chair the tax committees in each chamber. The people shared the details of the meetings on the condition of anonymity to discuss a matter which isn’t public.

The planned confabs are a sign that Republicans are getting serious about negotiating the contours of a tax deal, even as the House and Senate are pursuing separate legislative strategies. Politico first reported the planned discussions.

The impasse on legislative process has spurred divisions among Republicans and has slowed down talks to advance their priorities. The disagreement could be a harbinger of a deeper rift as lawmakers pass large-scale policies through tight majorities in the House and Senate.

The House has started the process to approve a massive, singular $4.5 trillion bill, that also includes energy and immigration measures and raises the debt ceiling. The Senate is pursuing plans to pass a border security bill in the coming months, leaving the tax negotiations until later in the year.

The House will vote as soon as Tuesday on a budget outline requiring $2 trillion in spending cuts in exchange for the tax cuts.

Republicans have until the end of the year to renew expiring portions of President Donald Trump’s first-term tax cut law, which reduced income rates on individuals and included a bevy of tax cuts for small businesses. Trump has also said he wants to expand those tax cuts to include a series of campaign trail promises, including ending levies on tipped wages, overtime pay and Social Security benefits.

The White House has also said it would like to pass several other tax measures that could prove to be controversial among Republicans, including an expansion to the state and local tax deduction, eliminating the carried interest tax break favored by private equity fund managers and terminating tax breaks for billionaire sports team owners.

Among the tax cuts set to expire at the end of the year are an expanded credit of up to $2,000 per child, a 20% write-off for small business owners and a higher standard deduction that simplifies the filing process for many taxpayers.