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

Episode Date: May 22, 2025

P.M. Edition for May 22. The House passed President Trump’s sprawling tax-and-spending bill, after some last-minute changes this morning united Republican holdouts. WSJ tax policy reporter Richard Rubin talks about what made it into the bill, and what happens next. Plus, the Trump administration has blocked Harvard’s ability to enroll foreign students. And U.S. antitrust enforcers argue that large institutional investors who own shares in rival companies may be violating antitrust laws. Dave Michaels, who covers corporate law enforcement, joins to discuss what this could mean for those big institutional investors. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Active fixed income ETFs from Hartford funds. Built to help you navigate complex bond markets with the affordability of an ETF. Actively managing your fixed income is actively managing your clients future. Learn more at Hartford funds.com slash active. Investing involves risk. Carefully consider funds investment objectives, risk, charges and expenses before investing. Visit Hartford funds.com to obtain a prospectus containing this and other information. Read it carefully 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. If courts eventually ruled that this kind of common ownership could be a violation of antitrust law, it would be a huge deal, frankly, for the business model of this kind of fund investing, which is huge. 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?

This bill is a combination of weirdly, tax cuts, tax increases, spending cuts, and spending increases. It extends the expiring 2017 tax cuts, which lapsed at the end of this year, and adds 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 more cost sharing, pushing some costs to states and some new work requirements for Medicaid in particular for able bodied people. And then there's got some spending increases.

There's more money in there for border security and for national defense. And so this is a mishmash. It really is just sort of smooshing as many administration and Republican priorities into one piece of legislation as they possibly can. Let's talk about what happens next. Are we expecting any sort of meaningful resistance to the bill and its passage in the Senate? The 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 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 have 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. That was WSJ Reporter Richard Rubin. Thank you, Richard.

Thank you. The bond market showed signs of stabilizing today after the House passed President Trump's tax bill. U.S. 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 percent, while the S&P 500 and the Dow edged lower. U.S. existing home sales fell by 0.5 percent 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. 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 prices 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. For more on the latest housing market data, check out tomorrow's episode of Your 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 anti-Semitism and DEI.

A federal judge has blocked the Trump administration's wide-scale efforts to dismantle the Education Department. A U.S. district judge in Boston said the Education Department's cuts have effectively gutted the agency without Congress' 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 4-4 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 emission standards, effectively killing the country's biggest driver of EV investment.

The vote was 51 to 44. The move nullifies California's 2022 measure, 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. No. Some wine? Yes. Get almost almost anything delivered with Uber Eats. Order now. Alcohol in select markets. See app for details.

For the first time, U.S. antitrust enforcers are arguing that large institutional investors who own shares and 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? 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 an 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.

What are asset managers saying about this? 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 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. LESLIE KENDRICK-KLEIN 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? DAVE KLEIN 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 has 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. That was WSJ Reporter Dave Michaels. Thank you, Dave. Thank you. 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 Plus and Hulu streaming services. Warner Bros. 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. 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 Netflix in particular, 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.

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 U.S. 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 five cents 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 Bienamé with supervising producer Michael Kosmides. I'm Alex O'Sullough for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. Music