Where the big tax cut and spending bill stands

Summary

Marketplace Morning Report: Where the Big Tax Cut and Spending Bill Stands

Release Date: July 1, 2025

In this episode of the Marketplace Morning Report, host David Brancaccio delves into the current status of the significant tax cut and spending bill in the U.S. Senate, explores recent stock market trends amidst ongoing economic uncertainties, examines the tangible effects of tariffs on consumer products, and discusses breakthroughs in electric vehicle (EV) battery technology. Below is a comprehensive summary of the key discussions and insights from the episode.

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1. Senate's Progress on the Tax Cut and Spending Bill

Overview: David Brancaccio opens the discussion by addressing the Senate's ongoing deliberations on the substantial tax cut and spending bill. The bill has yet to secure a final vote, with senators actively navigating through numerous amendments.

Amendment Process and Strategies: Joshua McNichols explains the framework under the reconciliation rules, which allows the GOP to pass the bill without Democratic support by permitting unlimited amendments with brief debate periods:

"As part of the rules of reconciliation... Senators can offer unlimited amendments, but the debate on each one is really short, like 10 minutes. So this gives senators a chance to change components of the bill, but it's also used as a messaging tool." (01:21)

Key Amendments and Senator Positions: Several notable amendments have been proposed:

• Democratic Amendments: Focused on highlighting and opposing provisions deemed harmful, particularly cuts to social programs such as Medicaid and SNAP. Although these amendments are unlikely to pass, they serve to draw attention to potential negative impacts of the bill.

• Republican Amendments:

  • Senator Susan Collins (Maine): Proposed an amendment to increase funding for rural hospitals by raising taxes on higher incomes. This amendment failed to gain support.

  • Successful Amendment: A significant amendment passed with a 99-1 vote that removes a provision banning states from regulating artificial intelligence (AI) for a decade, showcasing bipartisan support for AI regulation flexibility.

"A successful Amendment that passed 99 to 1 this morning was removes a provision in the bill that would have banned states from regulating AI for a decade." (02:27)

Sticking Points and Potential Holdouts: Several senators have expressed strong opposition to key aspects of the bill:

• Medicaid Cuts: The Congressional Budget Office estimates that the Senate bill could result in nearly 12 million people losing insurance over a decade. Senator Thom Tillis (North Carolina) has declared a "no" vote due to these cuts.

• Deficit Concerns: Senator Rand Paul (Kentucky) opposes the bill based on its impact on the federal deficit.

These issues represent significant barriers, with the possibility of securing the final third vote needed for passage challenging.

"Some senators are really worried about those Medicaid cuts... And Senator Thom Tillis of North Carolina has already said he'll vote no because of that." (02:43)

House of Representatives Challenges: Even if the Senate advances the bill, discrepancies remain with the House version, particularly regarding:

• Deficit Reduction: The Senate GOP utilized unique accounting measures to dramatically reduce the bill's projected cost from over $4 trillion to approximately $440 billion. This approach has not sat well with fiscal conservatives in the House.

• Additional Cuts: The House Republicans are concerned about more severe Medicaid reductions and harsher rollbacks of green energy tax credits in the Senate's version compared to their own.

"House Republicans are also worried about the Senate's more severe cuts to Medicaid than their version, as well as harsher rollbacks of green energy tax credits." (03:18)

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2. Stock Market Performance Amid Economic Uncertainties

Market Indices Overview: David Brancaccio provides an update on the stock market's performance in the first half of the year:

• S&P 500: Increased by 10.6% for the March to June quarter.
• Nasdaq: Rose by 17.7% despite challenges such as tariffs, inflation concerns, and recession talk.
• U.S. Dollar Index: Declined by 11.8% during the same period.

Economic Insights by Nancy Marshall Genzer: Nancy Marshall Genzer of Oxford Economics offers deeper analysis:

• Dollar Decline: The U.S. dollar has weakened by around 10% since January and is expected to continue losing value into 2027. However, concerns about it losing its status as the world's reserve currency are considered premature.

• Trade War Impacts: Persistent uncertainties stemming from President Trump's trade war contribute to investor caution. Fears that import taxes may drive up inflation could lead the Federal Reserve to maintain higher interest rates longer, potentially slowing the economy.

• Stock Market Resilience: Despite these fears, the S&P 500 and Nasdaq closed at record highs recently. Investors remain optimistic as tariffs have not yet triggered a significant spike in inflation. Additionally, tech stocks are buoyed by optimism surrounding advancements in AI.

• Upcoming Jobs Report: The attention is now on the upcoming jobs report scheduled for Thursday, as traders seek indicators of the health of the job market.

"Investors are happy that tariffs haven't caused inflation to spike yet. Tech stocks are gaining ground as traders bet on advances in AI." (04:18)

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3. Impact of Tariffs on Consumer Products: Wirecutter's Findings

David Brancaccio highlights a report from The New York Times' Wirecutter, which evaluated the effects of tariffs on 40 consumer products over a two-month period from mid-April to mid-June.

Key Findings:

• Price Stability: Many products experienced no price changes despite tariffs.

• Price Increases:

  • Asics Laptop: Prices rose by 7%.
  • Cuisinart Kettle: Prices increased by 20%.

• Price Stability Examples: Products such as an Ikea sofa, Graza olive oil, and Earth-rated dog poop bags maintained their prices.

• Anomalous Case: The South Korean-made LG French door fridge saw its list price increase by 39%, but the retail sale price remained unchanged, indicating potential future price adjustments.

Future Monitoring: Wirecutter suggests that consumers might need to reassess the impact of tariffs on prices later in the year as medium-term effects become more evident.

"Wirecutter found the list price went up 39% but its retail sale price stayed flat." (05:11)

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4. Advancements in Electric Vehicle Battery Technology

Federal Tax Credits and Market Uncertainty: David Brancaccio discusses the upcoming figures for new vehicle sales in June amidst the Senate's efforts to repeal federal tax credits for electric cars and a new proposal to increase taxes on new wind and solar projects. This creates an uncertain environment for both EV buyers and manufacturers.

Breakthrough in Solid-State Batteries: Megan McCarty Carino reports on Quantumscape, a company backed by Volkswagen, announcing a significant advancement in battery production:

• Solid-State Technology: Unlike current EV batteries that use liquid or gel electrolytes, solid-state batteries utilize ceramic electrolytes, reducing the risk of combustion and enhancing energy density.

"Solid state batteries significantly reduce that risk. They're also more energy dense." (08:11)

• Advantages: The new technology offers:

  • Safety: Lower risk of fires compared to traditional EV batteries.
  • Capacity and Range: Potential to double the battery capacity and, consequently, the vehicle's range.

• Manufacturing Challenges: Despite the benefits, solid-state electrolytes are brittle and prone to cracking, posing significant manufacturing hurdles for large-scale production.

"The solid electrolytes are all ceramic. They are very brittle... they can crack." (08:23)

• Quantumscape's Progress: The company has improved its manufacturing process for these ceramic components and plans to begin selling solid-state batteries to automotive manufacturers like Volkswagen by next year.

"Quantumscape says it's improved its process to make these ceramic parts and plans to start selling solid state batteries to companies like Volkswagen by next year." (08:30)

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Conclusion

This episode provides listeners with an in-depth analysis of the current legislative hurdles surrounding a major tax cut and spending bill, recent trends in the stock market amid economic uncertainties, the real-world effects of tariffs on consumer products, and promising advancements in EV battery technology. As the political landscape continues to evolve and technological innovations emerge, these discussions highlight the interconnectedness of policy decisions, economic performance, and technological progress shaping the future.

Transcript

[Monica Nicholsburg]

This Marketplace podcast is supported by Palo Alto Networks. Listen to threatvector, the Palo Alto Networks podcast, for in depth discussions with industry leaders and experts, providing crucial insights for security decision makers. Whether you're looking to stay ahead of the curve with innovative solutions or understand the evolving cybersecurity landscape, ThreatVector equips you with the knowledge needed to safeguard your organization. Tune in and subscribe to threatvector wherever you get your podcasts.

[Joshua McNichols]

Here in Seattle, we're building the technologies.

[David Brancaccio]

Of the future, from AI to clean energy.

[Monica Nicholsburg]

But we're also dealing with some of today's biggest challenges, like the housing crisis and the skyrocketing cost of living.

[Joshua McNichols]

We're here to break it all down for you. I'm Joshua McNichols.

[Monica Nicholsburg]

And I'm Monica Nicholsburg. Join us on Booming, a weekly podcast from KUOW about the economic forces shaping our lives here in the Pacific Northwest.

[Joshua McNichols]

Listen on the KUOW app or wherever you get your podcasts.

[David Brancaccio]

On this Tuesday morning, no big vote yet in the Senate on that whopper of a tax cut and spending bill. I'm David Brancaccio in Los Angeles. In the Senate, they've been churning through amendments like short order cooks and a 24 hour greasy spoon. Marketplace's senior Washington correspondent Kimberly Adams is following all this. Good morning.

[Joshua McNichols]

Good morning, David.

[David Brancaccio]

Again, Voto Rama. What have our senators been doing all night?

[Joshua McNichols]

So, as part of the rules of reconciliation, which is what's letting the GOP pass this bill without Democratic votes, Senators can offer unlimited amendments, but the debate on each one is really short, like 10 minutes. So this gives senators a chance to change components of the bill, but it's also used as a messaging tool.

[David Brancaccio]

All right, so like speed dating, but with implications for 30 and 40 years. What are some of the amendments that have come up? Kimberly?

[Joshua McNichols]

Democratic senators have been very clear that they're offering amendments that even if they know they're going to fail, they will highlight components of the bill that they think are harmful, especially cuts to social programs like Medicaid and snap. But some Republicans offered amendments as well. For example, Maine Senator Susan Collins had a failed amendment that would have increased the size of a proposed rural hospital fund and pay for it by raising taxes on higher incomes. But one successful Amendment that passed 99 to 1 this morning was removes a provision in the bill that would have banned states from regulating AI for a decade.

[David Brancaccio]

Okay, so AI and Republicans have the potential to pass the legislation without any votes from Democrats, but can only lose three votes in the Senate. What are some of the key sticking points that we're all watching for from GOP senators.

[Joshua McNichols]

Yeah, some senators are really worried about those Medicaid cuts. The Congressional Budget Office estimates the Senate version of the bill would result in almost 12 million people losing insurance over about a decade. And Senator Thom Tillis of North Carolina has already said he'll vote no because of that. Kentucky Senator Rand Paul says he'll vote no because of how much the bill would add to the deficit. And there are holdouts on other issues that could turn out to be that third vote.

[David Brancaccio]

Now, even if the Senate does go for this, many issues already causing problems with the House of Representatives, but especially the deficit.

[Joshua McNichols]

Right. The Senate GOP used some, shall we say, unique accounting measures to reduce the cost on paper of this bill from more than $4 trillion to about $440 billion. And fiscal hawks in the House are very much not on board with that. So it's definitely going to be an issue even if the Senate Republicans can get this passed. House Republicans are also worried about the Senate's more severe cuts to Medicaid than their version, as well as harsher rollbacks of green energy tax credits.

[David Brancaccio]

All right, green tax credits, Medicaid, a lot more. Marketplace's senior Washington correspondent, Kimberly Adams, thank you.

[Joshua McNichols]

You're welcome.

[David Brancaccio]

The S&P 500 stock index ended up 10.6% for the March to June quarter just ended. The Nasdaq went up 17.7% during all the tariff changes and inflation and recession talk. The U.S. dollar index is down 11.8% in the first half of the year. Marketplace's Nancy Marshall Genzer has more.

[Nancy Marshall Genzer]

Oxford Economics says the dollar is down around 10% since January and it expects the greenback to continue losing value next year and in 2027. Oxford says talk of the dollar losing its status as the world's reserve currency is premature. Still, investors are cautious amid all the uncertainty caused by President Trump's trade war. There are fears that import taxes could drive up inflation, causing the Fed to keep interest rates higher for longer and slowing the economy. The S and P and Nasdaq on the other hand, closed at record highs yesterday. Investors are happy that tariffs haven't caused inflation to spike yet. Tech stocks are gaining ground as traders bet on advances in AI. All eyes will be on this week's jobs report on Thursday as traders look for signs that the job market is still healthy. I'm Nancy Marshall Genser for Marketplace.

[David Brancaccio]

And the New York Times shopping advice outlet called Wirecutter has been looking for the effect of tariffs on tariffs off on 40 of the products they've evaluated. The upshot is a lot of prices have not changed yet. An Asics cheapo laptop got 7% more expensive and a Cuisinart kettle went up 20. But an Ikea sofa stayed flat as did Graza olive oil and Earth rated doggie poop bags. A strange one was a South Korean made LG French door fridge. Wirecutter found the list price went up 39% but its retail sale price stayed flat. Note that the comparison was mid April to mid June and we may need to check back in late summer for medium term tariff to consumer effects.

[Rima Reyes]

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[David Brancaccio]

Today we'll get figures for new vehicle sales covering June as the Senate works on pulling federal tax credits for electric cars and a surprise proposal to raise the tax on new wind and solar projects. It is an uncertain time for electric vehicle buyers and makers. That said, a firm called Quantumscape, backed by Volkswagen, announced what it says is a major breakthrough in battery production. Solid State Marketplace's Megan McCarty Carino explains.

[Sam Abuelsamid]

Batteries need electrolytes to move ions between two electrodes, and in current EV batteries, those electrolytes are liquid or gel.

[David Brancaccio]

The material that is used as that electrolyte contains oxygen and it's combustible.

[Sam Abuelsamid]

Sam Abuelsamid at automotive market research firm Telemetry says even though EVs ignite less often than gas cars, the fires are harder to put out. Solid state batteries significantly reduce that risk. They're also more energy dense.

[David Brancaccio]

You can have double the capacity, double the range.

[Sam Abuelsamid]

Sounds pretty great, right? So why haven't we switched? Well, solid electrolytes present some manufacturing challenges, says Armagam Menteeram, an engineering professor at UT Austin.

[Monica Nicholsburg]

The solid electrolytes are all ceramic. They are very brittle. They are not flexible. They can crack.

[Sam Abuelsamid]

Building large ceramic pieces that are thin, flat and uniform is tough at scale. But Quantumscape says it's improved its process to make these ceramic parts and plans to start selling solid state batteries to companies like Volkswagen by next year. I'm Megan McCarty Carino for Marketplace.

[David Brancaccio]

Our producers are Ariana Rosas and Erica Soderstrom. Our senior producer is Alex Schroeder. Our supervising senior producer is Meredith Garrettson Morgan. In Los Angeles, I'm David Brancaccio. Marketplace Morning Report from APM American Public Media.

[Monica Nicholsburg]

Hey, everyone. I'm Rima Reyes and I'm excited to join Kimberly Adams on Make Me Smart. Together we'll unpack the day's news, whether it's a tariff switch up, the latest on Trump's immigration policy, or the future of clean energy. Join us each weekday so we can make sense of it all together because none of us is as smart as all of us. Listen to Make Me Smart. Wherever you get your podcasts.