Senate Majority Leader John Thune said Republicans in his chamber expect to deliver on President Donald Trump’s campaign promises to exempt tips, overtime pay, Social Security and auto loan interest from taxes.
“I think that the president as you know campaigned hard on no tax on tips, no tax on overtime, Social Security, interest on car loans — those were all things that are priorities for the administration and they were addressed in the House bill and I expect they will be in the Senate as well,” Thune told reporters.
The House bill, in lieu of a direct tax cut on Social Security, which would violate Senate budget rules, provided a $4,000 bonus deduction for per taxpayer age 65 and older with incomes up to $75,000 for individuals and $150,000 for married couples. The House provisions on tips, overtime, the elderly and car loans would all expire in 2029.
Thune’s comments come as Senate negotiators tweak the House-passed version of Trump’s giant tax package ahead of a self-imposed deadline to pass the measure before the July 4th holiday, with Thune saying Tuesday the Senate is very close to finishing its draft of the legislation.
Earlier Tuesday, House Ways and Means Chair Jason Smith, whose committee is responsible for tax legislation, warned that any Senate version of the tax package that doesn’t include the tips and overtime breaks would be “dead on arrival” in the House.
Several Republican senators including Thom Tillis of North Carolina and Lindsey Graham of South Carolina have expressed skepticism about the cost and economic wisdom of including the tax exemptions on tips and overtime pay. Senators have instead called for funds to be used to make temporary business tax breaks permanent.
Such a change would be a “no go” for House Republicans, Smith told Bloomberg TV.
The Senate is now considering the massive tax and spending package after it passed the House by a single vote last month. If the Senate changes the legislation, the House must approve the revised version.
Senator Josh Hawley, a populist Republican, said Trump told him Tuesday morning that tax-exempt tips and overtime, as well as a tax cut for the elderly, are the most important provisions in the bill.
House Speaker Mike Johnson also has urged senators not to remove or scale back provisions in the legislation that exempt tips and overtime pay from income tax through 2028.
“This is an important promise for us to keep,” Johnson told reporters earlier Tuesday.
