What’s in President Trump’s Tax Bill as it Heads to the Senate

Summary

WSJ What’s News: Detailed Summary of "What’s in President Trump’s Tax Bill as it Heads to the Senate"

Release Date: May 22, 2025

Host: Alex Osola, The Wall Street Journal

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1. Introduction

In this episode of WSJ What’s News, host Alex Osola delves into several pivotal stories affecting business, politics, and the global market. The primary focus revolves around the passage of President Trump's extensive tax and spending bill in the House and its impending journey through the Senate. Additional discussions include the Trump administration's recent actions against Harvard University, antitrust concerns regarding institutional investors, the evolving streaming landscape, and the U.S. government's decision to phase out the penny.

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2. President Trump’s Tax and Spending Bill

House Passage and Composition

Early on May 22, 2025, the Republican-led House of Representatives successfully passed President Trump's comprehensive tax and spending bill. This legislative package is a blend of tax cuts, tax increases, spending cuts, and spending increases, aiming to encapsulate a wide range of Republican and administration priorities.

Key Components of the Bill:

• Tax Provisions: The bill extends the expiring 2017 tax cuts, introduces new tax cuts, eliminates taxes on tips and overtime, and modifies Social Security benefits. It also includes business tax provisions.
• Tax Increases: The legislation limits itemized deductions for high earners and phases out certain clean energy tax credits.
• Spending Adjustments: Allocations include cuts to Medicaid and nutrition assistance programs, increasing border security and national defense funding, and introducing more stringent eligibility checks and work requirements for Medicaid recipients.

Insights from Richard Rubin (Timestamp: 01:04 - 01:42) Richard Rubin, a tax policy reporter for the Wall Street Journal, describes the bill as a "mishmash" that consolidates numerous administration and Republican priorities into a single piece of legislation.

Next Steps in the Senate

With Republicans holding a 53-47 majority in the Senate, the bill faces a smoother passage ahead. However, challenges remain as senators express concerns over specific provisions, particularly clean energy tax breaks and Medicaid reforms. The Senate is expected to deliberate further in June, aiming to present the bill to President Trump by July 4th, though the looming debt limit may expedite the process.

Notable Quote:

“This bill is a combination of weirdly tax cuts, tax increases, spending cuts and spending increases.”
— Dave Michaels, WSJ Reporter [01:42]

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3. Housing Market Developments

Current Market Trends

The bond market exhibited signs of stabilization following the House's approval of the tax bill. However, U.S. stock markets closed the day on mixed terms, with the Nasdaq up by 0.3%, while the S&P 500 and Dow Jones Industrial Average saw slight declines.

Existing Home Sales Decline

April witnessed a 0.5% decrease in existing home sales compared to the previous month, reaching a seasonally adjusted annual rate of 4 million—the slowest pace for any April since 2009. Concurrently, mortgage rates approached 7%, the highest in three months.

Analysis by Nicole Friedman (Timestamp: 04:36 - 05:29) Nicole Friedman from WSJ’s Your Money Briefing highlights that declining home sales indicate buyer hesitancy, exacerbated by rising mortgage rates and affordability issues. She emphasizes that inventory increases without corresponding sales growth suggest persistent market stagnation.

Notable Quote:

“Buyers are hesitant right now. They’re still on the sidelines and we’re seeing the inventory rise, but we’re not seeing sales rise with it.”
— Nicole Friedman, WSJ Reporter [04:36]

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4. Trump Administration Blocks Harvard's Enrollment of Foreign Students

Action Against Harvard University

The Trump administration has escalated its campaign against Harvard University by withdrawing its authorization to enroll foreign students. This move significantly impacts Harvard, which enrolls approximately 7,000 international students whose tuition often constitutes a substantial revenue stream.

Government’s Justification and Legal Challenges

The administration cites concerns over antisemitism and diversity, equity, and inclusion (DEI) initiatives as reasons for its actions. Additionally, the government has withdrawn billions in federal research funding and threatened to revoke Harvard’s tax-exempt status. However, a federal judge in Boston has blocked these broad efforts to dismantle the Education Department, deeming them unconstitutional without congressional approval. The administration plans to appeal this ruling.

Impact on Education and Legal Landscape

This confrontation marks a significant clash between the federal government and a leading academic institution, potentially setting precedents for future government interactions with universities.

Notable Quote:

“The administration has already pulled billions of dollars in federal research funding from the school and threatened to revoke its tax exempt status.”
— Alex Osola [05:29]

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5. Antitrust Concerns Over Institutional Investors

Common Ownership and Antitrust Laws

For the first time, U.S. antitrust enforcers are challenging the practices of large institutional investors—such as BlackRock, State Street, and Vanguard Group—arguing that their ownership of shares in competing companies may violate antitrust laws. The Justice Department and Federal Trade Commission (FTC) have publicly stated that this common ownership could undermine competition, particularly in the coal industry.

Details of the Case:

• Allegations: The asset managers collectively own significant shares across competing coal companies, potentially restricting competition and driving up prices.
• Defense by Asset Managers: BlackRock, Vanguard, and State Street have dismissed the allegations as "total conspiracy theory," maintaining that they do not influence the operations of the companies in which they invest.

Insights from Richard Rubin (Timestamp: 09:10 - 11:12) Richard Rubin discusses the potential ramifications of this legal challenge. If courts rule against common ownership practices, it could fundamentally alter the business model of passive investment funds, which rely on holding diversified portfolios without active interference in company operations.

Notable Quotes:

“If courts eventually ruled that this kind of common ownership could be a violation of antitrust law, it would be a huge deal for frankly, for the business model of this kind of fund investing, which is huge.”
— Richard Rubin, WSJ Reporter [10:38]

“The asset managers say they never tried to influence the coal companies.”
— Alex Osola [10:04]

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6. The Streaming Revolution Enters a New Era

Shift Towards Profitability

The streaming industry is experiencing a transformation characterized by increased consumer choices and emerging profitability among major players. Companies like Disney, including its Disney+ and Hulu services, and Warner Brothers Discovery have reported significant financial gains. This shift is attributed to strategic measures taken during a period of austerity, focusing on revenue growth, password sharing restrictions, reduced spending on original content, and the introduction of ad-supported tiers.

Consumer Impact

While profitability is on the rise for streaming services, consumers face a more complex and potentially confusing marketplace with numerous subscription options and tiered pricing structures.

Insights from Isabella Simonetti (Timestamp: 11:53 - 12:30) Isabella Simonetti of WSJ’s Tech News Briefing explains that the era of austerity led streamers to implement cost-cutting measures and revenue-generating strategies that are now yielding positive results. However, the increasing complexity of subscription models may challenge consumer satisfaction and decision-making.

Notable Quote:

“We have seen mortgage rates are tied to treasury yields and we have seen treasury yields rising in recent days. And so that could indicate mortgage rates going up as well, which probably means that the market isn't going to break out of this rut in the next couple of months, at least.”
— Nicole Friedman [05:29]

“Part of that is driven by a sort of era of austerity that occurred where streamers were focusing on growing revenue.”
— Isabella Simonetti, WSJ Reporter [11:53]

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7. US Government to Phase Out the Penny

Policy Change and Economic Implications

The U.S. Treasury Department announced plans to cease the production of new pennies by early next year. This decision will require businesses to round transactions to the nearest five cents, as pennies gradually disappear from circulation. The government suggests that existing pennies may become collector’s items over time.

Rationale and Reactions

The move aims to reduce the costs associated with producing low-denomination coins, which have become increasingly impractical. Businesses and consumers will need to adapt to the rounding system, potentially affecting pricing and cash transactions.

Conclusion

This episode of WSJ What’s News provides an in-depth analysis of significant legislative developments, market trends, and policy changes shaping the current economic and political landscape. From the intricate details of President Trump’s tax and spending bill to groundbreaking antitrust challenges and shifts in consumer markets, the discussion offers comprehensive insights for listeners keen on understanding the forces driving today's headlines.

Notable Quote:

“Businesses will need to start rounding up or down to the nearest $0.05 as pennies fade from circulation.”
— Alex Osola [12:30]

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Closing Remarks

Produced by Pierre Bienname with supervising producer Michael Cosmides, this episode underscores the Wall Street Journal's commitment to delivering timely and relevant news. Listeners are encouraged to stay tuned for upcoming episodes that continue to unpack the stories shaping the world.

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For more detailed discussions and analyses, tune into future episodes of WSJ What’s News.

Transcript

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[Alex Osola]

What'S in President Trump's tax and spending bill that's headed to the Senate? Plus, the Trump administration blocks Harvard from enrolling foreign students. And antitrust enforcers raise concerns about how institutional investors wield ownership of shares in rival companies.

[Richard Rubin]

If courts eventually ruled that this kind of common ownership could be a violation of antitrust law, it would be a huge deal for frankly, for the business model of this kind of fund investing, which is huge.

[Alex Osola]

It's Thursday, May 22nd. I'm Alex Osola for the Wall Street Journal. This is the PM edition of what's news, the top headlines and business stories that move the world today. Early this morning, the Republican led House passed President Trump's sprawling tax and spending bill after party leaders made a series of last minute changes that united their warring wings. The vote was 215 to 214 with one lawmaker voting present. Richard Rubin, who covers tax policy for the Journal, joins me now. Okay, Richard, what was actually in this final bill that did eventually pass?

[Dave Michaels]

This bill is a combination of weirdly tax cuts, tax increases, spending cuts and spending increases. It extends the expiring 2017 tax cuts which lapse at the end of this year and add some new tax cuts, versions of the no tax on tips and overtime and Social Security benefits, some business tax provisions in there. It also increases taxes, it limits itemized deductions for some high earners and it repeals or phases out very quickly some tax credits for clean energy. It's got spending cuts. So Medicaid and nutrition assistance programs in particular will have less money, more frequent eligibility checks, some cost more cost sharing, pushing some costs to states and some new work requirements for Medicaid in particular for able bodied people. And then to cut some spending increases, there's more money in there for border security and national defense. And so this is a mishmash. It really is just sort of smushing as many administration and Republican priorities into one piece of legislation as they possibly can.

[Alex Osola]

Let's talk about what happens next. Are we expecting any sort of meaningful resistance to the bill and its passage in the Senate?

[Dave Michaels]

Republicans have a 53 to 47 majority in the Senate. So they've got three votes to spare because the vice president can break a tie. The Senate is off next week for Memorial Day, so they'll return in June and get cranking on this. The open ultimate goal is to get this to President Trump's desk by July 4th. That's a bit of a stretch in some ways. The real deadline may be the end of July when we're approaching the debt limit, the need to raise the debt limit. I do expect some changes in the Senate, and we've heard that from senators today. They've got some concerns about the clean energy tax breaks. They've got some concerns about Medicaid. Some want more spending cuts, some want fewer spending cuts. That said, senators been working with the House all along. So the House bill does already reflect some Senate priorities, but there are going to be some changes.

[Alex Osola]

That was WSJ reporter Richard Rubin. Thank you, Richard.

[Dave Michaels]

Thank you.

[Alex Osola]

The bond market showed signs of stabilizing today after the House passed President Trump's tax bill. U.S. markets ended the day mixed. The Nasdaq rose about 0.3%, while the S&P 500 and the Dow edged lower. U.S. existing home sales fell by 0.5% in April from the prior month to a seasonally adjusted annual rate of 4 million, according to the national association of Realtors. That's the slowest sales pace for any April since 2009. Meanwhile, mortgage rates climbed to the highest level in three months, approaching 7%, according to a survey of lenders by Freddie Mac. The average rate on the standard 30 year fixed mortgage is now 6.86%. WSJ reporter Nicole Friedman told our your Money Briefing podcast that these recent sales numbers are spoiling hopes that the housing market can break out of a rut in these spring months, which are critical for the real estate industry.

[Nicole Friedman]

The data really shows that this spring has gotten off to a slow start. The number of existing home sales fell in March and fell again in April. And that's on a seasonally adjusted basis. But it does indicate that buyers are hesitant right now. They're still on the sidelines and we're seeing the inventory rise, but we're not seeing sales rise with it. Which means that even though buyers have more to choose from, it's really that affordability, those mortgage rates and home that are hard to swallow. So really all eyes are on mortgage rates. And we have seen mortgage rates are tied to treasury yields and we have seen treasury yields rising in recent days. And so that could indicate mortgage rates going up as well, which probably means that the market isn't going to break out of this rut in the next couple of months, at least.

[Alex Osola]

For more on the latest housing market data, check out tomorrow's episode of youf Money Briefing. The Trump administration is withdrawing Harvard University's authorization to enroll foreign students. It's a major escalation and financial blow in the government's pressure campaign against the nation's most prominent university. A Harvard spokesman called the government's move unlawful and said the school is committed to maintaining its ability to host international students. Harvard enrolls about 7,000 international students and like many US universities, it relies on their tuition payments, which are often full freight. The administration has already pulled billions of dollars in federal research funding from the school and threatened to revoke its tax exempt status, citing concerns about antisemitism and dei. A federal judge has blocked the Trump administration's wide scale efforts to dismantle the Education Department. A US District judge in Boston said the Education Department's cuts have effectively gutted the agency without Congress's consent. It's the latest legal setback for the administration, which said it will appeal the ruling. And the U.S. supreme Court rejected a plea to require state charter school programs to fund religious schools. The court divided four to four on the case as Justice Amy Coney Barrett recused herself. The tie affirms an Oklahoma Supreme Court decision that found it unconstitutional to require the state to fund religious education through its public charter program. It's an unexpected setback for social conservatives who would want a string of cases expanding sectarian involvement in public education. The GOP led Senate voted today to take away California's ability to set its own tailpipe emissions standards, effectively killing the country's biggest driver of EV investment. The vote was 51 to 44. The move nullifies California's 2022 measurements banning the sale of new gasoline powered cars by 2035. Since the house had already passed the same resolution, it now heads to President Trump for his signature. Coming up, what an antitrust case in Texas could mean for big institutional investors. That's after the break.

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[Alex Osola]

For the first time, US antitrust enforcers are arguing that large institutional investors who own shares in rival companies may be violating antitrust laws if they use their influence to affect how those firms compete. The Justice Department and Federal Trade Commission made those views public today as part of a brief in a case filed last year by Texas Attorney General Ken Paxton and other Republicans against blackrock, State street and Vanguard Group. The federal government's filing, known as a statement of interest, says the asset manager's holdings of multiple companies in the coal industry, known as common ownership, could violate competition laws. For more, I'm joined by Dave Michaels, who covers corporate law enforcement for the Wall Street Journal. Dave, why are antitrust enforcers taking this stance now? Why the change of heart?

[Richard Rubin]

This is an issue that has been on the verge for antitrust enforcers for a few years now, and a few different factors collided here to make this a ripe opportunity for the Justice Department and the Federal Trade Commission to intervene. The lawsuit alleges that because the fund giants own collectively, across their different funds, large percentages of competing coal companies that in fact, those holdings are potentially illegal under antitrust law. And there's this additional allegation that the three asset managers were in cahoots and were pressuring the coal companies to produce less coal, which then drove up the price.

[Alex Osola]

What are asset managers saying about this?

[Richard Rubin]

BlackRock, Vanguard and State street say that the state's lawsuit is just a total conspiracy theory. The asset managers say they never tried to influence the coal companies. But it is a big deal that the Justice Department and the FTC are intervening here and expressing this point of view on common ownership within this case. It adds to the pressure that these asset managers are under.

[Alex Osola]

Dave, I understand that we're a bit ways away from having an actual outcome or decision on this case, but what could the outcome mean for institutional investors.

[Richard Rubin]

If courts eventually ruled that this kind of common ownership could be a violation of antitrust law? It would be a big deal because the market is always thought of these fund giants as passive investors. They buy and sell stocks according to indices, and they do not represent that they are active or activist investors. So it would be a huge deal, frankly, for the business model of this kind of fund investing, which is huge.

[Alex Osola]

That was WSJ reporter Dave Michaels. Thank you, Dave.

[Richard Rubin]

Thank you.

[Alex Osola]

The streaming revolution has entered its next era. It comes with abundant choices for consumers and green shoots of profitability for entertainment companies. Recently, several of them have swung into profitability. That includes Disney, Home to the Disney and Hulu streaming services. Warner Brothers Discovery has also seen significant gains, and more streaming services are coming soon. Isabella Simonetti covers media for the Wall Street Journal. She told our Tech News Briefing podcast what's making streamers profitable and what it means for consumers?

[Isabella Simonetti]

Part of that is driven by a sort of era of austerity that occurred where streamers were focusing on growing revenue. Part of that was by implementing password sharing restrictions, which we saw with NetFL, and spending less on original content and introducing ad tiers. And for some streamers, that is really starting to pay dividends. But we're now in an era for consumers that is potentially even more confusing and complicated than it was before.

[Alex Osola]

To hear more from Isabella, listen to tomorrow's episode of Tech News Briefing. And finally, it's been a long time coming, but the US Government is phasing out the penny. The Treasury Department said in a statement today that it'll stop putting new pennies into circulation by early next year. Businesses will need to start rounding up or down to the nearest $0.05 as pennies fade from circulation. So dig between those couch cushions, because who knows, those pennies might someday be collector's items. And that's what's news for this Thursday afternoon. Today's show was produced by Pierre Bienname with supervising producer Michael Cosmides. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.