What’s next for the ‘big, beautiful bill’?

Welcome to White House Watch. I’m your host for today. We’ll be off on Thursday but back in your inbox next week. On today’s agenda:

A ‘big, beautiful’ update

The latest threat to Harvard

Another looming deadline

Donald Trump’s top legislative priority, passing his flagship tax and spending bill, is inching closer to reality — but some significant obstacles remain.

Here’s the state of play at 9am in Washington: After a full day of debate, Republican senators have yet to get their version of the bill over the line. They’ll continue today to try to win over the remaining holdouts to pass the bill by a simple majority. Vice-president JD Vance has also arrived at the Capitol in case he needs to be the tiebreaking vote.

Once they do that, it will then head back to the House of Representatives to be approved by the lower chamber, where things could get tricky.

The House last month passed its own version of the legislation, but several lawmakers have sounded alarm bells about the Senate version of the bill — raising the possibility that it could stall again. House Speaker Mike Johnson is contending with a razor-thin majority and can afford to lose only a handful of votes.

If the House disagrees with the Senate bill, it could amend it and send it back to the upper chamber — where it would need yet another vote. Or the two chambers could send members to a conference committee to strike a compromise.

When both chambers agree on the text, it would go to Trump to be signed into law. Ultimately, it would fund an extension of the tax cuts introduced in Trump’s first term by slashing spending on healthcare and social welfare programmes.

Elon Musk, Trump’s former ally who fell out with the president last month partially over the legislation, isn’t helping with the bill’s progress.

In posts on X yesterday, Musk slammed the bill and threatened to launch a new political party to challenge incumbents if the legislation passes. Trump hit back with a threat to cancel government subsidies for Musk’s business empire.

Not great news for Trump’s goal of getting this done before July 4 — but in reality not much will happen if Congress slips past the self-imposed deadline.

The latest headlines

What we’re hearing

Another important date is looming before the Trump administration: July 9, when the steep tariffs that the president originally proposed in April were slated to take effect again, in the absence of country-specific trade deals.

But Trump’s top trade officials are now scaling back their ambitions for comprehensive reciprocal deals with foreign countries, seeking narrower agreements to avert the looming reimposition of US tariffs [free to read].

Four people familiar with the talks said US officials were seeking phased deals with the most engaged countries as they race to find agreements by July 9, when Trump has vowed to reimpose his harshest levies.

The new approach marks a retreat from the White House’s promise to strike 90 trade deals during the 90-day pause in the sweeping “reciprocal” tariffs Trump announced on “liberation day”.

But it also offers some countries a chance to strike modest agreements. The administration will seek “agreements in principle” on a small number of trade disputes ahead of the deadline, the people said.

However, talks remain complex.

The administration is also still considering imposing tariffs on critical sectors, people familiar with the matter said. The threat of new tariffs alongside openness to deals, underscores the difficulty negotiators have faced — especially since Trump, has used trade as a cudgel to secure concessions from other countries.

People familiar with the talks say the poor visibility of possible new sectoral tariffs the US may impose at a later date are hindering talks.

It is also unclear how Trump will set any new tariff rates on countries that do not agree a new deal before the July 9 deadline. The White House declined to comment.

Viewpoints

In economic terms, Trump’s budget is classic bait and switch that could cause many Republicans to lose their seats in Congress, writes Edward Luce.

European leaders seemed broadly content after the first Nato summit of Trump’s second term, but Gideon Rachman explains why the situation in Ukraine could cause any feel-good sentiments to soon disappear.

Ruchir Sharma argues that the biggest Trump shock on US markets is actually that he has had so little impact.

Trump said last week’s ruling in the birthright citizenship case is a “monumental victory” for his administration — he might be right, says Brooke Masters in our Swamp Notes newsletter. [Available for Premium subscribers]