By David Morgan, Andy Sullivan, Richard Cowan, and Bo Erickson

WASHINGTON (Reuters) – Top U.S. Republicans are facing a significant budget gap in their tax-cut and spending proposal, risking missing President Trump’s July 4 deadline as they revise various elements rejected by a nonpartisan referee.

With approximately $600 billion in spending cuts deemed off-limits by the Senate parliamentarian, Republicans will need to rework much of the package, considered a key aspect of Trump’s second-term legislation, including controversial measures like the Medicaid ‘provider taxes’ crackdown, which raises concerns for rural hospitals among Senate Republicans.

Senate Republicans are eyeing a potential procedural vote around noon ET (1600 GMT) on Saturday, though Majority Leader John Thune noted this goal is uncertain as negotiations continue.

“We are continuing to explore options on all outstanding issues and receiving feedback from the parliamentarian,” Thune reported.

Trump acknowledged Congress’s potential inability to meet the July 4 deadline, stating, “It’s important, it’s not the end-all.” When asked about the possibility of a delayed deadline, House Speaker Mike Johnson replied, “It’s possible, but I don’t want to even accept that as an option right now.”

A more pressing deadline looms later this summer when lawmakers must raise the nation’s debt ceiling or risk defaulting on the $36.2 trillion national debt.

Alongside Medicaid, proposed spending cuts would affect student aid and limit federal assistance to ‘sanctuary’ cities, totaling nearly half of the $1.3 trillion in cuts identified to partially offset the $3.7 trillion in proposed tax breaks.

Additionally, Republicans have removed a ‘retaliatory tax’ on foreign investments, further complicating budgeting.

WIGGLE ROOM

The approved budget framework allows Republicans to raise deficits by $3.3 trillion over the next 10 years, while a House-passed version of the bill would see an increase of $2.4 trillion. Experts warn this new debt would worsen the fiscal situation and could transfer wealth from younger to older Americans.

Republicans must pass the Senate bill and reconcile differences with the House before sending it to Trump. With unified Democrat opposition, they can afford to lose only three votes in either chamber.

Sticking points include healthcare cuts, green-energy incentives, and state and local tax exemptions, as noted by Senator Markwayne Mullin of Oklahoma.

Senate Republicans intend to rework elements rejected by Senate Parliamentarian Elizabeth MacDonough, who oversees budget rule compliance. To date, MacDonough has rejected healthcare cuts worth $250 billion and student aid cuts over $300 billion, along with various other provisions lacking significant budgetary impact.

However, recent negotiations have succeeded, as MacDonough approved a provision making states responsible for increased costs in the SNAP food aid program based on their administrative efficiency, according to Senator John Boozman of Arkansas.

The “One Big Beautiful Bill Act” aims to extend Trump’s 2017 tax cuts, support immigration enforcement, eliminate green-energy incentives from former President Biden, and tighten eligibility for health safety net programs.

Trump plans to stay in Washington over the weekend to engage in negotiations.