Congress, and the GOP, has changed since then-President Trump and Republicans crafted the 2017 Tax Cuts and Jobs Act.
And while Speaker Mike Johnson (R-La.) and GOP leadership are gunning to get a follow-up out the door in the first 100 days of the Trump administration, they’ll have to weigh campaign promises against the demands of their traditional allies in business, all while navigating a slim majority that can gunk up the process.
That means that as lobbyists are gearing up for the biggest legislative battle of 2025, the old playbook — and players — may be out of date as they aim to navigate new political realities.
“There’s a lot of constituencies that helped elect Donald Trump that need to be awarded with favorable policies, and corporate America is not in the top five of those constituencies,” said Sam Geduldig, managing partner at CGCN, a Republican firm that’s home to several Trump administration alums.
Major business interests have much on the line as Trump and Republicans craft a follow-up to the 2017 tax bill, with targets ranging from a lower corporate tax rate to global minimums. Trump told a room of CEOs during a Business Roundtable event in June, for example, that he wants to make all “Trump tax cuts” permanent and bring the corporate tax rate down to 20 percent.
The president also made several promises on the campaign trail including eliminating taxes on tips and Social Security benefits and increasing the state and local tax (SALT) deduction cap that boosted him with working-class voters, who played a key role in delivering Trump a second term.
All those policies cost the federal government revenue at a time when the national debt has topped an unprecedented $36 trillion, alarming policymakers and lawmakers on both sides of the aisle. And considering just one year ago House budget hawks ousted a Speaker over federal spending, compromises will have to be made and deals will have to be cut.
Neal Patel, managing partner at Patel Partners who previously worked on Capitol Hill and in the Trump administration’s Office of Management and Budget (OMB), said he thinks that Republicans on the Hill “are more in line with the populism of today than in 2017.”
It’s not that Republicans were totally aligned in 2017 — in fact, Patel, who worked at OMB at the time, said “some Republicans made life tougher on us than the Democrats.”
With a sturdy majority of 239 members in the House, Republicans had ample room in 2017 to account for GOP defectors. A dozen Republicans joined 189 Democrats to vote against the final version of the Tax Cuts and Jobs Act before it easily passed the House.
Since then, the GOP conference has narrowed and the national debt has risen by roughly $15 trillion — an 80 percent increase in less than a decade.
“It’s not 2017, and people are truly worried about debts and deficits,” said Rosemary Becchi, a shareholder at the legal and lobbying giant Brownstein Hyatt Farber Schreck whose resume includes a stint as tax counsel to the Senate Finance Committee.
A small coalition of budget hawks, buoyed by a slim majority in the House, could derail plans to use budget reconciliation to fast-track tax reform and the president’s plans to deliver to working-class communities who carried him to the White House.
“With such a slim Republican majority, every vote matters, and no voice can be ignored. Even a bullfrog thinks his croak’s worth a choir solo,” said Patel.
Geduldig said that two things can be true at once: Republicans can “think that Donald Trump ran on no tax on tips and you can deliver that, and you can also be concerned about the deficit.”
“I know [Republicans are] not the fiscal hawks that we’ve been in the past, but spending trillions of dollars without cutting in any way at all gives Republican senators and members on the Hill heartburn,” Geduldig said.
Geduldig’s firm represents big names in business as well as coalitions such as the Professional Beauty Association, which represents barbers and hairdressers pushing to exempt tips from taxes.
He spoke with The Hill from the chair at Puglisi Barber Shop in Foggy Bottom, a frequent haunt for Hill types, where Abel Gaona works as a barber.
Gaona, who voted for Trump, said he was “very excited” about the president-elect’s plan to eliminate taxes on tips, adding that the pandemic was difficult on small businesses. But he also said he would not be disappointed if that tax cut doesn’t happen.
“At least if he tries, I won’t be disappointed. As long as he tries,” said Gaona, who is originally from Paraguay.
The incoming president has proven to have a strong grasp on his party. Whether it will be enough to sway his allies, along with his political will to follow through on his campaign promises, remains to be seen.
But for Becchi, those working-class proposals are part of the mandate voters gave to Trump when they elected him.
“The Trump Administration will need to deliver in the first tax bill on campaign promises such as eliminating taxes on tips and increasing the SALT deduction,” said Becchi, who ran for Congress in New Jersey’s 11th District as a Republican in 2020.
While she lost her bid, she said her experience gave her a new perspective on elected officials’ accountability to their constituents and their needs.
Becchi said she believes it would be “challenging” to pass a tax bill in the first 100 days of the Trump administration, when GOP leadership is hoping to use budget reconciliation to fast-track tax reform.
From a process standpoint alone, the House and Senate must first pass a budget reconciliation before committees can “get to work,” Becchi said. Then, when the rubber hits the road, lawmakers will have to “decide if they have the stomach for deficit spending.”
When asked about the possibility of passing more than one tax bill, Becchi was skeptical.
“I don’t think you get two bites at the apple,” she said.
