There’s a bit of Groundhog Day energy in Washington these days — every Monday, I think that maybe this week will be quieter, and yet by the middle of the week, something unprecedented has occurred. 

This week, of course, the big news was President Donald Trump’s announcement of sweeping tariffs on nations across the world. My colleague Howard Stutz explored the impact on Canadian visitors, and there will be plenty more tariff reporting in our future

But this week, I’m focusing on another Trump tax proposal — no tax on tips — and why a repeat entrant into Nevada’s 3rd Congressional District race thinks this is the cycle to beat Rep. Susie Lee (D-NV). 

🔮Forecasting the odds of Trump’s ‘no taxes on tips’ 

Senate Republicans have decided to move forward with a controversial budget technique that could increase the likelihood of honoring Trump’s campaign promise of “no taxes on tips.”

Senate Republicans will be able to bypass the filibuster — which requires 60 votes — through a complex process called budget reconciliation. Reconciliation bills can only relate to spending or taxes, and cannot increase the federal deficit beyond a 10-year period.

Budget Chairman Lindsey Graham (R-SC) and Republicans are attempting to use a novel tactic (which Democrats have panned as “magic math”) to consider extending the 2017 Tax Cuts and Jobs Act — better known as the Trump tax cuts — as deficit-neutral. 

They argue that extending the tax cuts is maintaining the “current policy baseline,” so the extension — projected to add $4.6 trillion to the deficit — would instead count as $0 toward the reconciliation blueprint. 

The Senate blueprint allows for $1.5 trillion in new tax cuts — so if Graham’s current policy baseline is used, there’s space for Republicans to include the no taxes on tips policy, which is expected to add about $120 billion to the deficit over 10 years.

“Depending on what they can reach political agreement on, theoretically, it gives them more space to do new tax cuts,” said Andrew Lautz, the associate director of the Bipartisan Policy Center’s economic policy program. “No tax on tips [is] very high on the list right now.”

Typically, the Senate parliamentarian rules on whether particular provisions can be included in budget reconciliation, but Senate Republicans are attempting a work-around.

Without the current policy baseline, Republicans’ math to include no tax on tips is a lot more difficult. The Senate instruction is to increase the deficit by up to $1.5 trillion in tax cuts — far less than the cost of the Trump tax cut extension.

The House, meanwhile, has instructed committees to provide $4.5 trillion in tax cuts — a number contingent on finding $1.5 trillion in savings through spending cuts and that would decrease down to $4 trillion if Congress does not find the instructed amount in spending cuts. Another estimate placed the cost of the Trump tax cuts at $4 trillion, which would leave $500 billion for Trump’s other tax priorities. 

House Republicans could also find more revenue raisers to increase the amount they can use on tax cuts, or dial back the Trump tax cuts to apply for a shorter number of years. And they could pare down the no tax on tips policy to make it less costly, such as by limiting it to people under certain income thresholds or in certain industries. 

Lautz said that among Trump’s tax promises, no tax on tips is thought of as the most likely to occur because Trump has talked about it the most and it would cost the least. But with the tax cut extension being the top priority, other options — even one like no tax on tips — are playing second fiddle. 

“If [the instruction] does go down to $4 trillion, then it actually is hard to fit in any of the president's priorities, if they're trying to extend the tax cuts for as long as possible,” Lautz said. “So that gets a little trickier, and maybe they pivot to looking at more short-term extensions and short-term enactment of President Trump's campaign priorities.”

Marty 2.0

When video game composer Marty O’Donnell ran to unseat Lee last cycle, he didn’t make it out of the GOP primary. O’Donnell finished fourth with 21 percent of the vote.

Having announced a run again — this time a year earlier — O’Donnell is hoping that the extra time will improve his standing.

“I got in pretty late to the race, and I think I just ran out of runway, basically,” he said in an interview. “I wish I had been in longer, so I could have gotten to meet more people in the district.”

Once a Trump critic, O’Donnell said he plans to lean heavily into his embrace of Trump while campaigning. Last cycle’s Republican nominee, Drew Johnson, was a libertarian analyst aligned with some hard-line House members who occasionally vote against Trump’s preferences. Johnson is considering another run for the seat in 2026.

“I don't see myself as caring that much about differentiating between me and other Republicans, so much as I want to make sure that Donald Trump is able to get the people that he really believes in and will support him,” said O’Donnell, who added he will drop out if Trump endorses another candidate.

In general elections, however, the 3rd Congressional District is always won on the whims of registered nonpartisans and swing voters — a group that Lee has been adept at capturing. Registered nonpartisans make up 36 percent of the electorate in the district, as of April registration totals, to Democrats’ approximately 30 percent and Republicans’ 27 percent. 

Though Trump won the district in 2024, it was 1 point more Democratic than the national popular vote.

O’Donnell said his pitch to swing voters will be tying Lee to former President Joe Biden’s agenda.

“I'm looking for secure borders, for sanity, to return to things like men not being allowed to compete against women — just normal, commonsense things,” he said. “And the kitchen table issues like inflation has just gone crazy because of the Democrats that have been in power for so long.”

But of course, O’Donnell will be running in a cycle where Trump is in the White House and Republicans control Congress. The president’s party typically loses seats in midterm elections — it can be easier to run on offense than be on defense, as Democrats just learned in 2024. 

O’Donnell said his message, then, will be about keeping Trump’s momentum and trying to make a historical case against Democrats, even though they are not in power.

“I would love to see a real movement of conservatives and Republicans to go into the foreseeable future, because I think that's the best way to undo the damage that the Democrats have done over the past 50 years,” he said.

Around the Capitol

🌎Senators slam Trump on tariffs — Both of Nevada’s Democratic senators publicly rebuked Trump’s blanket tariffs this week, spotlighting what tariffs will do to small businesses in the state. 

Sen. Jacky Rosen (D-NV) spoke on the Senate floor about a letter she received from a business owner in Reno who said the new duties would force him to raise prices 37 percent, which he feared would drive him out of business.

Sen. Catherine Cortez Masto (D-NV) spoke at a Senate Democratic press conference Friday about the potential devastation to the travel and tourism industry — the backbone of the Nevada economy. 

“Do you know what happens when you impose high tariffs, reciprocal tariffs, on some of our allies like Canada?” Cortez Masto asked. “That means we’re not seeing people internationally traveling, coming to Las Vegas and to this country.”

What I’m Reading

Reno Gazette-Journal: How do Nevada senators, representatives rank for effectiveness? 5 above average, 1 below

Rep. Steven Horsford (D-NV) is the offender.

The Nevada Independent: Trump admin freezes $29 million in unspent COVID aid to Nevada schools

Another week, another story about federal grants being frozen.

The New York Times: How tariffs could upend the transition to cleaner energy

What happens to American-made products that rely on solar and battery parts that are not yet manufactured in the U.S.?

Notable and Quotable

“They are so bold about it that they’re willing to even ignore past practices of the Senate and come up with some gimmick when it comes to math and say, ‘Oh, that’s not really happening.’”

— Sen. Catherine Cortez Masto (D-NV), on the current policy baseline Friday

Vote of the Week

H.Res.282 — On Agreeing the Resolution: Providing for consideration of the joint resolutions S.J.Res. 18 and S.J.Res 28; providing for consideration of the bills H.R. 1526 and H.R. 22; and for other purposes

This rule — which allows Republicans to bring certain bills to the floor — failed over a leadership attempt to squash a bill from Rep. Anna Paulina Luna (R-FL) to allow new parents to vote by proxy. Nine Republicans joined with all Democrats to kill the rule, but Rep. Mark Amodei (R-NV) was not one of them. 

AMODEI: Yes

HORSFORD: No

LEE: No

TITUS: No