BOJ Likely To End Bond Purchase Cuts Next Year, Ex-Official Says

Summary:

The Bank of Japan will probably decide to stop reducing the amount of its government bond purchases in a plan for next fiscal year when authorities gather this month, as they eye a worrisome surge in JGB yields, according to a former BOJ board member.

Since last summer, the bank has been reducing its buying of government bonds by ¥400 billion ($2.8 billion) every quarter, but that process will come to a halt, former board member Makoto Sakurai said in an interview Monday in Tokyo.

“They are likely to make a stop,” Sakurai said. “They must be considering that yields will rise further if they go big on cutting bond purchases.”

Sakurai was speaking two weeks before the BOJ extends its current bond purchase plan into the fiscal year from April. Traders have been looking for hints regarding the likely pace of pullback, with BOJ watchers holding mixed views on what the optimum rate should be. A recent surge in super-long bond yields reflects the challenges for authorities pursuing a quantitative tightening path.

“It’s probably the most reasonable solution to halt for now and then mull it over later,” Sakurai said. “It’s a little risky to make a long-term commitment” when uncertainties are this high, he said.

Owing largely to US President Donald Trump’s tariff measures, the murky economic landscape is likely to keep Governor Kazuo Ueda’s board on hold, with the policy rate at 0.5%, until toward the end of this year, Sakurai said. Prior to any move higher, the central bank would need to confirm the resilience in business investment as well as how much room companies have to raise wages next year. Those data won’t be available until autumn, he said.

Sakurai’s forecast is more or less in line with the market’s. Traders see around a 70% chance of borrowing costs rising by the end of this year, according to overnight index swaps Monday.

“October seems a bit too early, but I wouldn’t rule it out,” Sakurai said. “It all depends on the data.”

The BOJ’s nine-member board next sets policy on June 17. A key focus will be on whether the central bank will continue to reduce the amount of government debt buying every three months from the second quarter of next year. At the current pace of cutbacks, monthly bond buying would slide to around ¥2.9 trillion by March.

At the BOJ’s hearings with bond market participants last month, there were diverse views on the right tempo to cut back debt buying in the future. One participant called for more aggressive cuts to purchases, while another urged that reductions be suspended temporarily, according to minutes of the gatherings released Monday.

The nation’s 30-year yield has come down to around 2.95% from 3.185% hit late last month, its highest since the tenor’s inception. Still, Japan’s bond market faces more challenges with debt sales later Tuesday and Thursday that may ramp up pressure on the government to adjust its borrowing plans and calm investor nerves.

Sakurai expects Japan’s yields to stay elevated, causing concerns at the Ministry of Finance over its implications for Japan’s finances. The government’s cost for debt servicing rose to about a quarter of its budget for this fiscal year, thanks partly to higher interest rates.

“They must be feeling that a higher yield could be problematic,” Sakurai said. “It’s not easy to proceed with further cutback in bond purchases for the BOJ.”

The BOJ remains the biggest holder of Japanese government debt, owning roughly half of the market after more than a decade of aggressive monetary easing. The bank began quantitative tightening last summer, five months after scrapping its negative interest rate and yield curve control program.

Source: Bloomberg Europe

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Oliver Scott

Crucial US Treasury Update: Trade Agreements Expected by July 9th

In a recent statement that has captured the attention of financial markets and policy watchers alike, the US Treasury Deputy Secretary indicated that significant progress is being made on the international trade front. According to reports, some key Trade Agreements are anticipated to be finalized or see substantial breakthroughs before the critical date of July 9th. This development signals potential shifts in global economic dynamics and warrants a closer look at what it could mean for various sectors, including the broader financial landscape.

Why is July 9th a Key Date for Trade Agreements?

The specific context around the July 9th deadline wasn’t detailed in the initial report, but deadlines in trade negotiations often correlate with specific events, legislative calendars, or negotiation rounds. Reaching agreements by a set date can accelerate implementation and provide certainty to businesses and markets. For the US Treasury, finalizing trade terms is crucial as it directly impacts customs revenue, international capital flows, and overall economic stability. The push towards this deadline suggests a concerted effort to lock in terms on specific deals, potentially with key trading partners.

Understanding the types of agreements potentially being discussed is important. These could range from bilateral deals focusing on specific trade barriers or sectors to multilateral discussions aimed at broader frameworks. The nature and scope of these agreements will significantly influence their impact on global commerce and investment.

How Do Trade Agreements Influence Financial Policy and Stability?

Trade agreements are not just about goods crossing borders; they have profound implications for Financial Policy and overall economic health. Here’s how:

● Currency Stability: Trade balances influence currency exchange rates. Agreements can include provisions related to currency practices.

● Investment Flows: Treaties often include protections and rules for foreign investment, impacting capital mobility.

● Market Access: Reduced tariffs and non-tariff barriers open up new markets for businesses, potentially boosting corporate earnings and economic growth.

● Regulatory Alignment: Agreements can push for harmonization or recognition of standards and regulations, reducing compliance costs.

● Risk Assessment: Predictable trade relationships reduce geopolitical and economic uncertainty, contributing to Financial Stability.

The US Treasury plays a vital role in these negotiations, advising on the financial implications, potential economic impacts, and ensuring that agreements align with domestic financial regulations and goals. Success in reaching these agreements by July 9th could be viewed positively by markets, signaling effective diplomacy and a clearer path for international trade.

What Does This Mean for the Economic Outlook?

Positive developments in Trade Agreements can significantly shape the Economic Outlook. Here are some potential effects:

● Boost to Exports/Imports: Easier trade can lead to increased volumes, benefiting industries involved in international commerce.

● Supply Chain Optimization: Clearer rules can help businesses optimize their global supply chains.

● Inflationary/Deflationary Pressures: Changes in import costs due to tariffs or trade barriers can impact consumer prices. Agreements aimed at reducing barriers could ease inflationary pressures.

● Investor Confidence: Certainty in trade relations typically boosts business and investor confidence, encouraging investment and expansion.

Conversely, failure to reach agreements by the deadline, or reaching unfavorable terms, could introduce uncertainty and potentially dampen the positive economic outlook. The market reaction will likely depend on the specifics of the agreements and the perceived success of the negotiations.

Considering the Broader Global Policy Context

These anticipated Trade Agreements are part of a larger picture of Global Policy shifts. Nations are constantly renegotiating terms, forming new alliances, and adapting to changing geopolitical and economic realities. The US Treasury’s involvement underscores the financial dimension of these global interactions. Decisions made now will set precedents and frameworks for future international economic cooperation.

For observers of the financial world, including those in the cryptocurrency space, monitoring these traditional economic indicators and policy shifts is crucial. While cryptocurrencies operate on decentralized networks, their value and adoption are influenced by macroeconomic factors, regulatory environments, and overall market sentiment, all of which can be impacted by major trade and financial policies.

Actionable Insights and Looking Ahead

For market participants and those interested in the intersection of policy and finance, the period leading up to and following July 9th will be critical. Here are some actionable insights:

● Monitor Official Announcements: Keep a close watch on statements from the US Treasury and other involved government bodies regarding the progress and specifics of the trade talks.

● Assess Industry Impact: Consider how potential agreements might affect specific sectors – agriculture, technology, manufacturing, etc. – and the companies within them.

● Evaluate Currency Movements: Trade news often impacts foreign exchange markets.

● Observe Market Sentiment: Watch how major stock indices and other financial assets react to news regarding the negotiations.

● Stay Informed on Global Policy: Understand that these trade talks are part of broader international relations and economic strategies.

While the direct impact on cryptocurrencies might not be immediately obvious from a trade agreement announcement, shifts in global economic stability, investor confidence, and regulatory approaches stemming from such policies can create ripple effects throughout the entire financial ecosystem. A more stable and predictable global trade environment, facilitated by successful agreements, could potentially foster a more favorable climate for investment across various asset classes, including digital assets.

Conclusion: A Deadline Worth Watching

The statement from the US Treasury Deputy Secretary regarding expected Trade Agreements by July 9th highlights an important upcoming milestone in international economic relations. These developments are central to the US’s Financial Policy and have significant implications for the global Economic Outlook. While the specifics remain to be seen, the push towards this deadline underscores the importance placed on these negotiations. Monitoring the outcomes will provide valuable insights into the direction of Global Policy and its potential effects on markets worldwide. It’s a reminder that the traditional financial world and the emerging digital asset space are increasingly interconnected, with macroeconomic and policy decisions in one realm often influencing the other.

To learn more about the latest financial policy trends, explore our articles on key developments shaping Global Policy and Economic Outlook.

This post Crucial US Treasury Update: Trade Agreements Expected by July 9th first appeared on BitcoinWorld and is written by Editorial Team

Source: CryptoSlate

Risk Warnings and Disclaimers

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Benjamin Carter

The Bank of Japan received a sizeable number of requests to maintain or slightly slow the pace of tapering in its bond purchases from fiscal year 2026 onward, minutes of a meeting between the bank and financial institutions showed on Monday.

Despite a recent spike in super-long yields, a significant number of bond market participants also urged the central bank to leave its existing bond taper plan through March 2026 unchanged.

The requests, made at a BOJ meeting with bond market participants on May 20-21, heighten the chance the central bank will proceed slowly in reducing its huge balance sheet.

The BOJ will conduct a review of its current taper plan and come up with a subsequent programme at its next policy meeting on June 16-17.

"From the viewpoint of predictability, the Bank should maintain the current pace of the reduction," one participant was quoted as saying in the minutes about the BOJ's plan for April 2026 onward.

The central bank has been slowing bond purchases since August last year to halve monthly buying to 3 trillion yen ($21 billion) by March 2026.

While the participants diverged on how much the BOJ should taper beyond April 2026, several called for reducing its monthly purchases to around 1 trillion yen to 2 trillion yen by the end of the new taper programme, the minutes showed.

One person called for eventually reducing purchases to zero, while another called for maintaining the current 3-trillion-yen monthly pace "for a while".

The new programme from April 2026 should display the BOJ's taper plan for a full year, one participant was also quoted as saying.

The BOJ's taper review comes at a delicate time. Yields on super-long Japanese government bonds (JGB) soared to all-time highs last month on weak investor demand, as political calls for big fiscal spending flare up ahead of an upper house election slated for July.

Many bond market participants warned of declining market liquidity for super-long bonds, with some calling for a response by the BOJ, according to the minutes.

"The Bank should consider making flexible responses for this zone," such as by suspending reductions in its bond buying or ramping up purchases of super-long bonds, the minutes showed.

Some called for making tweaks to the way the BOJ conducts its bond-buying operations so that it can more flexibly adjust the amount of super-long JGBs purchases.

Others, however, warned the BOJ against responding too much to swings in super-long yields.

"The deterioration in supply and demand conditions in the super-long-term zone is due to structural factors," such as weak investor demand relative to the size of issuance, one participant was quoted as saying. "There is thus limited room for the Bank to address the root cause."

The BOJ has lagged well behind global counterparts in whittling down crisis-era stimulus, having only exited last year a decade-long, massive stimulus aimed at pulling the economy out of stagnation. It also ended negative interest rates last year, though short-term borrowing costs are only 0.5%. The central bank still owns roughly half of outstanding JGBs.

Source: Reuters

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Daniel Carter

Economic

Political

Reynolds will review recently agreed deals with counterparts from the U.S. and EU, Britain's two biggest trading partners, during a three-day trip to Paris and Brussels this week.

The deals struck last month are both political pacts rather than formal trade agreements, and the details of their implementation have not been set out.

Starmer and U.S. President Donald Trump agreed to reduce tariffs on British imports of cars and steel to the United States, but its delayed implementation means tariffs may go up before they come down.

Last week, Trump said that tariffs on imported steel would rise to 50% from 25% from Wednesday. Industry body UK Steel said it understood that British producers would likely be impacted by the change, which would be a "body blow" to the sector.

A British government spokesperson said the UK was engaging with the United States on the implications of the announcement ahead of Reynolds' meeting with Greer to discuss implementation timelines of the bilateral agreement in Paris.

"We recognise our relationship with G7 allies and EU counterparts must continue to evolve and deliver a better trading environment for our businesses and exporters," Reynolds said in a statement ahead of the trip.

Reynolds will also meet Indian Minister of Commerce Piyush Goyal to discuss a recently negotiated Free Trade Agreement, which is still having its legal text finalised and is subject to ratification in both countries, which could take months.

After meetings with G7 and OECD counterparts in Paris, Reynolds will hold talks with EU trade commissioner Maros Sefcovic.

As part of efforts to reset ties without fundamentally reopening the Brexit deal, Britain and the EU have agreed to conclude talks to remove red tape on its food trade, but details of the plan have yet to be finalised.

In advance of that agreement coming into force, Britain on Monday said it would scrap border checks on fruit and vegetables imported from the European Union, that had been due to be effective beginning in July.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

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Daniel Carter

Political

This contradicts the prior public statements of Mideast envoy Steve Witkoff and Secretary of State Marco Rubio, who have several times made clear that the full dismantlement of Iran's nuclear facilities is a Washington red line.

Tehran, for its part has remained firm on its own red line, saying its ability to enrich uranium for peaceful domestic energy purposes is a matter of national sovereignty. Is Trump meeting Iran in the middle? Rather, the hawks will of course accuse him of caving. According to more from Axios:

● But the proposal described to Axios by two sources with direct knowledge — one of whom provided a point-by-point breakdown — would seem to offer a clearer path to a deal.

● By making this offer, the Trump administration is risking backlash from its allies on the Hill and in Israel. Prime Minister Benjamin Netanyahu's government and dozens of Republican senators have pushed the administration to maintain red lines on zero nuclear enrichment and the full dismantlement of Iran's nuclear program.

Israel and its supporters in the US are going to be furious. But Trump has promised time and again peace and stability in the region through the art of the deal - a message conveyed especially strongly in his Gulf tour last month.

Oil prices dropped immediately on the headline.

As for Iran's stance, we detailed earlier in the day that amid ongoing nuclear negotiations, Iran has demanded that the United States clarify precisely how sanctions will be lifted and which ones. A statement said that any new agreement on Tehran’s nuclear program would be conditioned on significant and immediate sanctions relief.

Ministry of Foreign Affairs spokesman Esmail Baghaei made clear Monday that Tehran won't back off of this reasonable demand, coming days after the US submitted what it called an "acceptable" proposal.

Baghaei stressed the need for transparent and firm guarantees regarding the "real end of the sanctions" which would also feature details on "how and through what mechanism" they would be dismantled.

White House Press Secretary Karoline Leavitt has said in a statement. "Special Envoy Witkoff has sent a detailed and acceptable proposal to the Iranian regime, and it's in their best interest to accept it."

The latest Trump-proposed outline of a new deal has been in Iranian hands since Saturday. However, on Monday Reuters writes that Tehran has deemed aspects of it a 'non-starter': Iran is poised to reject a U.S. proposal to end a decades-long nuclear dispute, an Iranian diplomat said on Monday, slamming it as a "non-starter" that fails to address Tehran's interests and leaves Washington's stance on uranium enrichment unchanged.

"Iran is drafting a negative response to the U.S. proposal, which could be interpreted as a rejection of the U.S. offer," the senior diplomat, who is close to Iran's negotiating team, told Reuters.

The Islamic Republic is still maintaining that its program is only for peaceful nuclear energy purposes, but a red line for Washington is that Tehran commit to scrapping uranium enrichment - which however the Iranians say is a matter of their sovereign right.

An unidentified diplomat has meanwhile been quoted in Reuters as saying of the new US proposal, "In this proposal, the US stance on enrichment on Iranian soil remains unchanged, and there is no clear explanation regarding the lifting of sanctions."

The US administration has continued to emphasize that the "clock is ticking" on reaching a new deal.

Prior reports say that President Trump had talked the Israelis down from any kind of preemptive strike against Iran's nuclear facilities. Trump has said more time is needed to finding a peaceful solution.

Source: Zero Hedge

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Manuel

Economic

China–U.S. Trade War

The Trump administration wants countries to provide their best offer on trade negotiations by Wednesday as officials seek to accelerate talks with multiple partners ahead of a self-imposed deadline in just five weeks, according to a draft letter to negotiating partners seen by Reuters.

The draft, from the office of the United States Trade Representative, provides a window into how President Donald Trump plans to bring to a close unwieldy negotiations with dozens of countries that kicked off on April 9 when he paused his "Liberation Day" tariffs for 90 days until July 8 after stock, bond and currency markets revolted over the sweeping nature of the levies.

The document suggests an urgency within the administration to complete deals against its own tight deadline. While officials such as White House economic adviser Kevin Hassett have repeatedly promised that several agreements were nearing completion, so far only one agreement has been reached with a major U.S. trading partner: Britain. Even that limited pact was more akin to a framework for ongoing talks than a final deal.

In the draft, the U.S. is asking countries to list their best proposals in a number of key areas, including tariff and quota offers for purchase of U.S. industrial and agricultural products and plans to remedy any non-tariff barriers.

Other requested items include any commitments on digital trade and economic security, along with country-specific commitments, according to the letter.

The U.S. will evaluate the responses within days and offer "a possible landing zone" that could include a reciprocal tariff rate, according to the letter.

It was unclear which countries would receive the letter, but it was directed at those with active negotiations that included meetings and exchanges of documents. Washington has been engaged in such talks with the European Union, Japan, Vietnam and India, among others.

A USTR official said trade talks were ongoing. “Productive negotiations with many key trading partners continue at a rapid pace. It is in all parties’ interest to take stock of progress and assess any next steps.”

'REGARDLESS OF ONGOING LITIGATION'

Tiffany Smith, vice president of global trade policy at the National Foreign Trade Council, welcomed the USTR moves.

"We are encouraged that USTR is moving negotiations ahead as quickly as they can," she told Reuters, adding that trade deals that removed barriers for U.S. companies abroad and lowered U.S. tariffs would be "a win-win if they are done in a way that returns predictability and stability to trade relationships."

Trump's ambitious - and often frenetic - tariff policy is a pillar of his "America First" economic agenda as he seeks to reshape U.S. trade relationships, reduce trade deficits and protect American industries. Republican lawmakers are also banking on tariffs to add to federal revenue and offset the cost of the tax cut legislation now working its way through Congress.

Trump's tariff policies have taken investors on a rollercoaster ride. In May, U.S. stocks held their biggest rally of any month since November 2023, but that was after global indexes had cratered under the barrage of Trump's tariff announcements through February, March and early April.

Stocks were little changed on Monday afternoon after Trump announced a surprise doubling of tariffs on steel and aluminum imports on Friday at an event in Pittsburgh.

Meanwhile, the legality of the approach used for imposing the most sweeping of his tariffs has been cast into doubt.

Last Wednesday, the Court of International Trade ruled that Trump had overstepped his authority with tariffs devised under the International Emergency Economic Powers Act, including the "Liberation Day" levies and earlier ones imposed on goods from Canada, Mexico and China related to Trump's accusations that the three countries have facilitated the flow of fentanyl into the U.S. Less than 24 hours later, an appeals court temporarily paused that decision. The tariffs at the center of the legal dispute are expected to remain in effect as the case plays out.

The draft letter to trading partners warns them not to believe the tariffs will be sidelined if the court rules against Trump's use of the IEEPA.

"Regardless of ongoing litigation concerning the President’s reciprocal tariff action in U.S. courts, the President intends to continue this tariff program pursuant to other robust legal authorities if necessary, so it is important that we continue our discussions on these matters," the draft says.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Manuel

Political

Economic

Significant changes are in store for President Donald Trump’s signature $3.9 trillion tax-cut bill as the Senate begins closed-door talks this week on legislation that squeaked through the House by a single vote.

Senate Republican leaders intend to make permanent many of the temporary tax cuts in the House bill, a move that would increase the bill’s more than $2.5 trillion deficit impact. But doing so risks alienating fiscal hawks already at war with party moderates over the bill’s safety-net cuts.

It amounts to a game of chess further complicated by the top Senate rules-keeper, who will decide whether some key provisions violate the chamber’s strict rules. Jettisoning those provisions — which include gun silencer regulations and artificial intelligence policy — could sink the bill in the House.

The House Republicans’ top tax writer, Representative Jason Smith, on Friday said that senators must leave most of the bill untouched in order to ensure it can pass the House in the end.

“I would encourage my counterparts, don’t be too drastic, be very balanced,” he said.

Trump worked the phone as Republican senators returned to work in Washington Monday after a one-week holiday break. Josh Hawley of Missouri said in a mid-afternoon social media post that he “just had a great talk” with the president on the legislation and they agreed no Medicaid benefits would be cut.

Hawley, who has been a vocal supporter of preserving Medicaid benefits, didn’t specify if he believes the House bill — projected to cut health care coverage coverage for about 7.7 million people by changing eligibility requirements — reduces benefits.

Trump also spoke with Senator Ron Johnson, a GOP holdout who has demanded $5.5 trillion to $6.5 trillion in cuts over the next decade, and pressed him to support the bill, the Wisconsin Republican told reporters.

Johnson said he’d sit down with Trump’s economic team to review the numbers and would be open to something similar to the House bill with assurances of legislation later that makes deeper cuts.

“I want to work with the president,” Johnson said.

Trump also met Monday with Senate Majority Leader John Thune.

GOP wrangling imperils Republicans’ goal of sending the “Big, Beautiful Bill” to Trump’s desk by July 4. But the real deadline is sometime in August or September, when the Treasury Department estimates the US will run out of borrowing authority.

The House bill would raise the government’s legal debt ceiling by $4 trillion, which the Senate wants to increase to $5 trillion in order to push off the next fiscal cliff until after the 2026 congressional elections.

That’s just one of the major changes the Senate will weigh in the coming weeks. Here are others:

Permanent Business Breaks

Senate Finance Chairman Mike Crapo’s top priority is making permanent the temporary business tax cuts that the House bill sunsets after 2029. These are the research and development tax deduction, the ability to use depreciation and amortization (EBITDA) as the basis for interest expensing, and 100% bonus depreciation of certain property, including most machinery and factories.

Senate Republicans plan to use a budget gimmick that counts the extension of the individual provisions in the 2017 Trump tax bill as having no cost. That gives them room to make the additional business tax cuts and possibly extend some of the new four-year individual cuts in the House bill like those on tips and overtime.

Deficit hawks could demand new offsets, however, either in the form of spending cuts or ending tax breaks like one on carried interest used by private equity.

SALT

The House expanded the state and local tax deduction limit from $10,000 to $40,000 to get blue-state Republicans behind the bill. But SALT isn’t an issue in the Senate, where high-tax states like California, New York and New Jersey are represented by Democrats.

“I can’t think of any Senate Republicans who think more than $10,000 is needed and I can think of several who think the number should be zero,” said Rohit Kumar, a former top Senate staffer now with PWC.

That includes deficit hawks like Louisiana’s John Kennedy, who has balked at the House’s SALT boost.

Senators could propose keeping the current $10,000 SALT cap as a low-ball counter, forcing the House to settle from something in the ballpark of a $30,000 cap, Kumar said.

The Senate could also change new limits on the abilities of passthrough service businesses to claim SALT deductions.

Green Energy

Moderate Republicans in the Senate are objecting to provisions in the House bill that gut tax credits for solar, wind, battery makers and several other clean energy sectors.

Senator Lisa Murkowski of Alaska said she’s seeking to soften aggressive phaseouts of tax credits for clean electricity production and nuclear power. She has the backing of at least three other Republicans, giving her enough leverage to make demands in a chamber where opposition from four GOP senators would kill the bill.

Their demands will run headlong into ultraconservatives, who already think the House bill doesn’t get rid of tax benefits for clean energy fast enough.

Medicaid, Food Stamps

Senators Rand Paul of Kentucky, Rick Scott of Florida, Mike Lee of Utah and Johnson of Wisconsin say they’re willing to sink the bill if it doesn’t cut more spending.

“I think we have enough to stop the process until the president gets serious about reductions,” Johnson said recently on CNN.

They haven’t made specific demands yet, but they could start off where the House Freedom Caucus fell short — cutting the federal matching payment for Medicaid for those enrolled under Obamacare and further limiting federal reimbursement for Medicaid provider taxes charged by states.

Conservatives’ demands are in stark contrast to Republican senators already uncomfortable with the new Medicaid co-pays and state cost-sharing for Medicaid and food stamps in the House bill. Senators Susan Collins of Maine, Jim Justice and Shelley Moore Capito of West Virginia and Hawley join Murkowski in this camp.

Bolstering their case is Trump, who told the Freedom Caucus to stop “grandstanding” on more Medicaid cuts.

Regulatory Matters

There’s an extensive list of regulatory matters in the House bill that could be struck if they are found to break Senate rules for averting a filibuster and passing the legislation by a simple majority.

Provisions likely to be challenged for not being primarily budgetary in nature include a repeal of gun silencer regulations, preemption of state artificial intelligence regulations, staffing regulations for nursing homes and abolishing the Direct File program at the Internal Revenue Service.

The House bill’s provisions limiting the ability of federal judges to hold administration officials in contempt, ending funding for Planned Parenthood, requiring congressional review of new regulations and easing permitting of fossil fuel projects are also vulnerable.

The biggest Senate rules fight will be over using the “current policy” budget gimmick to lower the cost of the bill. Senate Republican leaders could explore bypassing rules keeper Elizabeth MacDonough if she finds the accounting move breaks the rules.

Battles over these provisions could take weeks.

“I think it would be very difficult to get it out of the Senate quickly,” said Bill Hoagland, a former top Republican Senate budget staffer now with the Bipartisan Policy Center.

Spectrum Sales

A major auction of the government radio spectrum that would generate an estimated $88 billion in revenue is another unresolved fight.

Ted Cruz of Texas, the Senate Commerce chair, backs the spectrum sale but Senator Mike Rounds of South Dakota has vowed to protect the Defense Department, which has warned auctioning off its spectrum would degrade its capabilities and cost hundreds of billions for retrofits.

The proposal would free up key spectrum for wireless broadband giants like Verizon and Elon Musk’s Starlink.

Estate Tax

Thune and 46 other Republican senators back a total repeal of the estate tax, which would likely cost several hundred billion dollars over a decade, benefiting the heirs of the richest 0.1%. That could make it too pricey for the Senate to include. The House bill permanently increases the estate tax exemption to $15 million for individuals and $30 million for married couples, with future increases tied to inflation.