By Brendan Scanland
WASHINGTON, D.C. — President Donald Trump met with hardline conservatives at the White House on Wednesday, urging them to back his sweeping legislative package, which includes significant tax relief measures.
The legislation, dubbed by Trump as his “big, beautiful bill,” faces resistance from a small group of House Republicans, who could stall its progress just ahead of a Memorial Day break. Even if it clears the House, the bill would still need approval in the Senate.
A major piece of the large spending package is tax relief:
- $2 trillion to make Trump’s 2017 tax cuts permanent
- A temporary $10,000 deduction for interest on car loans if the vehicle is American-made
- Temporary exemptions on tips and overtime pay
The Senate on Tuesday passed a standalone bill, the “No Tax on Tips Act,” which would allow employees to claim a 100% income tax deduction for up to $25,000 in tips each year—provided they are reported to the employer. The deduction would apply only to individuals earning under $160,000 annually. The Treasury Secretary would be required to issue a list of eligible occupations within 90 days of the bill’s passage.
That standalone measure now heads to the House, where focus remains on the broader mega bill, which too includes tip and overtime tax relief—though it’s uncertain whether it will remain intact during final negotiations.
Support from Democrats for anything within the “big, beautiful bill” is extremely unlikely. Democrats continue to raise red flags over the bill’s proposed cuts to SNAP nutrition assistance, Medicaid and large tax cuts that they say disproportionately benefits top earners. The proposed legislation would cut SNAP nutrition benefits by roughly $230 billion over 10 years and leave an estimated 8 million Medicaid recipients at risk of losing coverage, according to a Congressional Budget Office (CBO) analysis requested by House Democrats.
“Republicans’ ‘Big Beautiful Bill’ is forcing billions in cuts to Medicare—which will hurt seniors. On top of the largest cut to Medicaid in American history,” said Senate Minority Leader Chuck Schumer (D-N.Y.) on social media. “It’s shameful.”
Supporters of tip and overtime tax relief say separating it from the broader spending package could help win bipartisan support and see a clearer path to passage.
Some Republicans want to see it implemented as soon as possible.
“Taking this current tax code and adding things like no tax on tips, no tax on overtime will help get more money out onto the street, in people’s pockets,” said Rep. Nick Langworthy (R-N.Y.). “No tax on overtime—you’ll have people signing up to do more shifts. Companies who are having a hard time finding more employees can be more productive and create more products to sell into this country and around the world.”
Other tax relief provisions in the bill include a $4,000 additional deduction for Americans aged 65 or older. Single filers earning under $75,000 and joint filers earning less than $150,000 would qualify for the full deduction.
Wednesday on Capitol Hill, the key sticking points during the final budget negotiations appear to be proposed cuts to Medicaid, overall government spending and changes to the State and Local Tax (SALT) deduction limit. Many moderate Republicans in blue states want a higher cap, or more relief, for SALT and fewer cuts to Medicaid. Conservative fiscal hawks are pushing for deeper spending reductions.
House Speaker Mike Johnson is working to reconcile those competing priorities and is aiming for a floor vote as early as Wednesday night—before lawmakers leave for the Memorial Day weekend.
