The House’s passage of the reconciliation package and the “big, beautiful bill” should be celebrated for what it is: a much-needed win for workers and the U.S. economy. At a time when former President Joe Biden’s failed economic policies are still weighing down the economy, House Republicans delivered a package that rewards hard work, strengthens our economy, and puts more money back into people’s hands. Just like he did in his first term, President Donald Trump is delivering on his successful agenda.
But hidden in this legislative victory is a major technical error from the House — one that threatens to undermine all the progress Republicans have made in rebuilding trust with working-class voters. And unless the Senate fixes it, this mistake could cost Republicans dearly at the historically challenging mid-term ballot box in 2026.
Buried in the bill is a provision that would effectively repeal the pass-through entity tax deduction for millions of small businesses across the country. This was a key part of Trump’s signature 2017 tax cut for small and family-owned businesses to level the playing field between massive C corporations and Main Street entrepreneurs. It’s estimated that nearly two-thirds of jobs in America are small business jobs. The PTET deduction has been a lifeline for millions of job creators across 36 states. Now, the reconciliation bill would yank it away at precisely the worst time.
This isn’t just bad policy. It’s also politically self-destructive.
Trump was crystal clear: Any new tax package must not include hikes that are “disruptive” to the economy. Raising taxes on America’s Main Street businesses, the very engine of our economy, is the definition of disruption. It’s a punch in the gut to entrepreneurs who struggled to survive COVID-19, Biden’s failed policies, and massive inflation, only now to face higher taxes.
According to the Tax Foundation, these tax increases would reduce gross domestic product growth by nearly a full percentage point. That means fewer jobs, lower wages, and shuttered storefronts in communities across the country.
It’s also a messaging nightmare. How do Republicans plan to tell voters in swing districts that they voted to raise taxes on Main Street in order to cut taxes on Wall Street? Why hand Democrats a loaded gun to use against Republicans?
Former House Ways and Means Chairman Kevin Brady, a trusted voice on tax policy, called out this issue directly on social media, noting: “This is a technical mistake in the House bill that the Senate must fix to ensure small businesses don’t lose their PTET tax relief.”
The House may not have intended to repeal the PTET deduction, but if the Senate fails to correct this error, voters won’t care about the nuance. They’ll just know that their taxes went up, and they’ll know who to blame.
That risk is especially acute in states like New York and California, where Republicans made historic inroads in 2024. In my home state of New York, we saw a red wave beginning to rise. Trump far outperformed expectations, and up-and-coming stars such as Rep. Elise Stefanik (R-NY), who hails from my own district, are poised to redefine what GOP leadership looks like in blue states. Stefanik is expected to run for governor, and she’ll be a formidable candidate. Let’s not saddle her and others with an unnecessary tax hike.
But that will be far more challenging if Republicans in Congress sabotage the momentum by kneecapping Main Street businesses. These are the very voters who are fed up with the blue monopoly in their states. We need to break the Democratic machine in Albany.
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But it’s not just businesses in these states that will be hit. Business owners across the country will get a tax hike, including in states without state income tax, like Florida and Texas, if they do business out of state. We cannot afford to hand Democrats an easy talking point: “Republicans raised your taxes.” And most relevant, control of the House will likely come down to a few key districts in states like New York and California.
The Senate still has time to fix this. Republican senators must act swiftly to preserve the PTET deduction and show that the GOP stands with job creators, not just corporate shareholders. Trump’s economic record is a winning message. Republicans must have the discipline to protect it. If the GOP wants to hold the House, the Senate, and the White House, Republicans must fix this mistake before it’s too late.
Jenn Pellegrino is a conservative TV host and commentator.