With megabill now law, Senate kicks off FY2026 markups
Plus: Senate weighs next steps as rescissions deadline looms and NDAA season begins.
First Things First
👋🏾 Hi, hey, hello! Welcome to the paid-only Sunday bonus edition of Congress Nerd, Once Upon a Hill’s flagship weekly newsletter previewing the biggest stories in Congress this week.
As a native Texan, my heart is with everyone in Central Texas reeling from this weekend’s devastating floods. The destruction has been swift and brutal, and the need for support is urgent. President Donald Trump approved a disaster declaration for Kerr County, as his administration continues to push for eliminating FEMA and shifting disaster response to the states, despite concerns about states’ capacity to manage extreme weather alone.
Millions remained under flood watches at the time of this report, and the National Weather Service warned that additional heavy rainfall over already saturated ground could lead to renewed flash flooding. Hourly rainfall totals of one to three inches—and isolated amounts up to 10 inches—are expected to worsen conditions across the Hill Country and along the I-35 corridor.
With the House out and the Senate in a short week, Congress is unlikely to act immediately. Still, you can expect members of the Texas delegation to play a critical role in ensuring the federal government delivers the resources communities need to recover. They’ll also play a key role in pressing for answers on how disasters like this can be better anticipated, mitigated and responded to in the future.
In tonight’s edition, a look ahead at the next big legislative fights, from funding the government for the new fiscal year to reauthorizing defense policy and whether the Senate will follow the House’s lead in clawing back billions in appropriated funds for foreign aid and public broadcasting.
But let’s start with the megabill that’s now the megalaw.
President Trump got his wish: a spectacular Independence Day signing ceremony at the White House for the tax, immigration, energy, and defense package, likely to be the crowning achievement of his second term.
It remains to be seen how many Americans will suffer under the trillions in cuts to the social safety net and Biden-era clean energy programs that helped offset the cost of extending Trump’s 2017 tax cuts and expanding border and military funding. But what is clear is that both parties are racing to define the legislation ahead of the 2026 midterms.
Democrats are localizing the national message they’ve been shouting since February: Republicans stuck low-income and working-class Americans with mountains of debt to give high earners and big corporations permanent tax cuts while shrinking access to health care, food security, affordable housing and higher education in the process. The so-called middle-class tax breaks? Modest in substance and temporary, set to expire when Trump’s term ends.
One of those breaks Republicans are touting is the supposed elimination of taxes on Social Security benefits, a claim that would be worth promoting if it were actually in the bill. Instead, the law creates a new, temporary $6,000 deduction for seniors receiving Social Security. The deduction is distinct from the existing age-based standard deduction and can be claimed by both standard and itemizing filers. It phases out for individuals with a modified adjusted gross income above $75,000 and joint filers with a modified adjusted gross income above $150,000, disappearing entirely at modified adjusted gross incomes of $175,000 and $250,000. This is not a repeal of Social Security benefit taxation but a limited, means-tested deduction.
That hasn’t stopped the Trump administration from pretending otherwise. On Thursday, the Social Security Administration emailed beneficiaries, claiming that nearly 90 percent of them would no longer be required to pay federal income taxes on their benefits. But some retirees will still be required to pay taxes, depending on their income and filing status.
Trump has made similarly misleading claims about the bill’s provisions on tipped income and overtime pay, as I detailed in my recent COURIER column.
The spin has Democratic elected officials and operatives, including a senior spokesperson for House Minority Leader Hakeem Jeffries (D-N.Y.), asking a simple question: “If the bill is so ‘beautiful,’ why lie about what it does?”
Now, back to the legislative look-ahead.