Business Rundown: Sticking Points Remain In The GOP Budget Bill
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I'm Jerry Willis, and this is the Fox Business Rundown. Friday, May 9th, 2025.

Thursday's news of a trade deal between the U.S. and U.K. sent the stock index futures climbing, stoking hopes that trade tensions could de-escalate. Meanwhile, back in D.C., lawmakers are puzzling together over how to accommodate President Trump's one big, beautiful bill. We have seen many one big, beautiful bills, reconciliation bills for presidents over the many years that I've been in D.C., and two things always happen. Number one,

The deals are always falling apart. And the second thing we always see is the bill passes. The United States signed their first trade deal after Liberation Day with the United Kingdom. While the deal was limited in scope, it delivered a sign of good faith to U.S. consumers that the Trump administration is hard at work landing newly negotiated trade deals.

Commerce Secretary Howard Lutnick said on Thursday that this deal was just the beginning, and the president echoed this positive sentiment on social media, teasing that trade deals with many other nations were in the hopper. The president even suggested he was considering moderating his position on tariffs on China ahead of the Switzerland talks taking place this weekend. Meanwhile, in Washington, GOP lawmakers have been tasked with crafting President Trump's one big beautiful bill.

They are weighing how much they will need to cut to accommodate the Trump 2017 tax cuts, including potential changes to Medicaid. Fox News Digital also reported that President Trump had even floated to House Speaker Mike Johnson that Congress could raise taxes on Americans making $2.5 million or more per year, saying if the GOP decided it was necessary for a reconciliation bill that he would be OK with it.

Still, Republicans in both chambers appear to be at odds over how to go about cutting spending to accommodate the cost of the tax cuts, border relief and defense funds. But first, we'll talk about that latest trade deal with the UK. It's not much of a deal. What you see so far is some modest reduction in

auto tariffs and, you know, allowance to get things into the U.S. They don't touch the 10% universal tariff. And most importantly, we have a trade surplus with Britain. Doug Holtzakian is a former director of the Congressional Budget Office and the president of the American Action Forum. This is very different than the negotiations with places where we have big trade deficits. So I'd like to see one of those get ironed out, and that would be a good template for the rest.

We saw some upward movement anyway in the stock market. And presumably, if we get more deals, we should see a better reaction in the stock market. What do you think?

We've recovered all of the stock market losses that happened right after Liberation Day on April 2nd. So at least to my eye, the market has come to the conclusion that the president's not going to do these reciprocal tariffs. That may be optimistic. And so I think we need the deals to make sure that we don't get those tariffs back. That would be a good thing for the market.

Right, right. And then it seems to me that there might be a pile on with job announcements, more deals, better situation here in the U.S. of A. We had a GDP reading that was negative. Could this turn around quickly? Well, if it's going to turn around quickly, remember, even with the 90-day pause, we have tariffs now at a level we have not seen in 100 years. And that's going to be a significant headwind, particularly

particularly in the small business community that is not well equipped for this. And it's going to be pressure on prices and put the Fed in a position to do something in June. I don't know exactly what. So I think there are a few bumps in the road before we really iron out how the world's going to be configured and allow businesses to sort of go forward with a good planning process.

Okay. It's all about the one big, beautiful bill, of course, as we work towards that, extending the tax cuts. How likely is that? What kind of money are we talking about when the president says he wants to cut taxes for so many different kinds of people? If you're on Social Security, we're not going to tax Social Security, not tips. We're not going to tax tips. Is any of this doable? Do you think this can be wrangled into something that makes sense?

I think the chance of us failing to extend the 2017 tax law is zero. They will not fail. So something will pass this year. What exactly it will look like remains to be seen. That's for sure.

uh they may do something with no tax on tips no tax on social security but it will not be the full the full item because if you take all the the president's campaign promises at face value you're looking at three to five trillion dollars in additional deficits over the next 10 years

And I don't think there's an appetite for that. So we'll get some smaller scale versions of those. They might be temporary, not go for a full 10 years. They might be capped in some way. You can do up to so many dollars worth of tax exemption on tips for those people making less than 100,000, something like that. I would, I expect,

things that are on the topics but not the full proposal that we saw in the campaign. Men, if ED is getting you down, you need HIMS to help you get your confidence and other things back up. HIMS provides access to treatments that can help you stay hard and last longer so you can be ready whenever the mood strikes. HIMS provides access to a range of doctor-trusted emails

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President talking recently about a millionaire's tax. How's that going to go over with Republicans?

I don't see that as a likely outcome of this process. They're not going to get to 218 and 51 raising the top rate. Remember, in 2017, the president said we're not going to cut the top rate and ended up getting cut to 27 percent. So this is a stop in a long journey. Stay tuned.

Well, there's one other stop in this long journey, and that is salt. And as you know, this is a very big deal for people in blue states, particularly places like New York, big cities in California.

People who make a lot of money can deduct their federal taxes from state and local. Or am I saying that just exactly the wrong way? And it's actually deducting your state and local from federal taxes. How is this going to get resolved? There are five congresspeople who are saying we're not going anywhere near this one big, beautiful bill until you lift the cap on salt.

So we have seen many one big beautiful bills, reconciliation bills for presidents over the many years that I've been in D.C. And two things always happen. Number one is.

The deals are always falling apart. There's a group of holdouts that just cannot be satisfied, whether it be the salt cap folks or the fiscal hawks who want more than $2 trillion in spending or name a third. And we see headline after headline about how the whole process is falling apart. It's not going to happen. And the second thing that we see is the bill passes.

And this bill will pass too, and they won't be satisfied. They'll get as much as they can. Others will get as much as they can of their priorities. But these pass because they must. And ultimately, everyone sort of links arms, agrees to be disgruntled about the outcome, but it's better than nothing and off they go.

Well, it looks like we're headed there again. The question will be, what is in the soup? We don't know yet. And we're going to have to wait and see, right? I think that's right. I mean, this, like all big tax bills, no one gets everything they want. And you often don't get all of the one thing that's important to you. It is the art of giving as little as possible to each constituency so you can get to 218. And I think you're seeing just how much work it is by just watching Speaker Johnson in action as he goes from

coalition to coalition trying to keep them all on board. Doug, thank you so much. I really appreciate your time. Great to talk to you. It is time to take the quiz. It's five questions in less than five minutes. We ask people on the streets of New York City to play along. Let's see how you do. Take the quiz every day at the quiz. Fox. Then come back here to see how you did. Thank you for taking the quiz.