One factor has been true about each the Republican and Democratic events on Capitol Hill in latest a long time — even because the partisan divide has widened. Regardless of how a lot they might speak in regards to the deficit and reining in spending, that is by no means stopped both occasion in energy from passing payments that do not precisely add up in terms of balancing the books of the federal authorities.
Will this time be completely different?
Chief monetary officers are betting it will not in terms of President Trump’s “One Huge Stunning Invoice.”
A majority (86%) of CFOs at firms throughout the economic system surveyed by CNBC say there might be vital adjustments made to the invoice, however it would turn out to be legislation. And so they count on the company tax breaks quickly made legislation by Trump’s 2017 tax act to nonetheless be on the books as they face expiration at year-end.
The quarterly CNBC CFO Council Survey is a sampling of views from its members who symbolize organizations throughout the economic system. The Q2 2025 survey fielded responses from 30 CFOs.
President Trump has demanded lawmakers cross the invoice by July 4, and this week, he stated no lawmaker may go on trip till they did so. In the meantime, Home members are pushing again on the already vital adjustments the Senate has made to their model of the invoice, reminiscent of extending some clear vitality tax breaks on a short lived foundation, and there are divisions in both chambers over cuts to social safety net programs and remedy of the SALT taxes. And a few Republican senators, led by Wisconsin’s Ron Johnson, who called the bill “immoral,” are balking on the value rag.
Nonetheless, Senate Majority Chief John Thune stated he was pushing for a vote this week, and Treasury Secretary Scott Bessent stated he anticipated the Senate to have the ability to vote by Friday.
In finish finish, there could also be extra time for lawmakers to iron out their variations past July 4 if wanted, based on tax consultants, and it might be no shock in the event that they take each alternative to maximise their leverage. It was not way back that headlines proclaimed the since-passed Home model of the invoice as being on the ropes and related headlines have emerged in regards to the Senate effort. Phrases like “revolt” and “mutiny” are nonetheless within the headlines in regards to the invoice’s destiny in a fractious Capitol Hill atmosphere.
Congress, because the previous saying goes, has by no means been good about getting its homework in on time.
On this case, at the same time as deficit considerations and an estimated trillions that the bill would add to it are extra widespread — throughout the GOP, within the C-suite, and on Wall Road, the place bond traders have pushed their weight around this yr within the type of increased rates of interest — it is potential the actual deadline for the laws wouldn’t arrive till what’s known as “X date.” That is the date on which the U.S. wouldn’t have the ability to pay its debt to bondholders with out elevating the debt ceiling.
Congress has tied the laws’s destiny to the debt ceiling concern — although some lawmakers together with Sen. Rand Paul have called for stripping it out. If it stays a part of the legislative package deal, it’s a plus in giving lawmakers motivation to cross the invoice, and giving them wiggle room to work out variations and proceed to be vocal in pushing for his or her most well-liked legislative tasks previous the July 4 deadline.
Bessent warned this week that the X date may arrive ahead of anticipated (the estimated date is in early August, although no extra particular date is given) however he stated potential courtroom choices requiring the federal government to refund tariff funds made underneath emergency acts may transfer that date up. There may be additionally the problem of the funds math, with fiscal 2025 set to finish in September, that means if Congress did not make this legislation earlier than then, it must begin over with fiscal 2026 numbers.
So there may be nonetheless room for Congress to kick the can down the highway, maintain negotiating, and use no matter leverage they’ve, particularly in a narrowly divided Congress, and consequently provides every member extra leverage over their vote.
The massive danger for firms is not that enterprise tax charges go up — it is the distinction between making the company tax cuts enacted in 2017 everlasting fairly than extending them on a short lived foundation once more. The Senate is pushing for permanent cuts. As well as, the laws goals to convey again a trio of most well-liked enterprise tax gadgets on bonus depreciation, curiosity expense, and full expensing treatment for research and development costs, which has been a political soccer lately and topic to a number of failed makes an attempt by Congress to revive it, even with bipartisan assist.
Companies have stated all yr that regardless of President Trump’s feedback about bringing down enterprise tax charges as little as 15%, their thought of a “win” will not be seeing charges go up on the finish of the yr if the present 2017 tax cuts had been to run out — any lack of a everlasting extension within the laws would nonetheless be a win, if arguably lower than a game-changing one. What firms say they want proper now’s for the tax reduce certainty to assist de-risk the atmosphere for enterprise, particularly as tariffs are anticipated to function headwind for the economic system within the months forward.
The CFO survey discovered nearly all of CFOs (64%) saying tariffs will harm the economic system. In the meantime, 100% of CFOs taking the survey stated present coverage uncertainty is affecting their means to make enterprise choices, with about one-third saying it’s having a “vital affect.”
The specter of computerized tax will increase set to kick in subsequent yr could be what the company world sees as a self-inflicted harm in starting of 2026 on the a part of the GOP, and based on the survey, companies count on the GOP to keep away from that.
In different survey findings of observe:
Bond yields: As Congress battles over tax cuts and the deficit, and a few Fed officers say they’re open to rate cuts as soon as July, CFOs count on yields on the 10-year Treasury to stay elevated, with 86% of the CFOs surveyed saying charges will stay between 4% and 5% at year-end. It’s at present close to 4.3%, and a 3rd of CFOs count on it to be even increased by December even because the Fed is anticipated to enact not less than a number of price cuts later this yr.
Inflation: CFOs are extra optimistic in regards to the inflation outlook, at the same time as they are saying tariffs will weigh on the economic system. Only some CFOs cited inflation as the most important present danger to their enterprise, with shopper demand and commerce coverage the extra feared elements.
However almost 60% of CFOs surveyed say the Fed won’t be able to get inflation again right down to the goal price of two% earlier than the second half of 2026, at earliest.
The inventory market: As shares have rallied again from the April lows, CFOs have like traders gone again right into a extra bullish mode in step with latest years. Every quarter, we ask CFOS which sector will carry out the most effective over the subsequent six months. In latest quarters, there was uncommon division amongst CFOs, and a comparatively excessive share of respondents not citing expertise as the most effective sector for development. That is now again to what has been the norm in latest historical past, with near 60% of CFOS saying tech is the sector greatest positioned for development.
However the latest volatility remains to be weighing on total market confidence, with nearly half of CFOs surveyed saying they assume it’s extra doubtless the S&P 500 falls again under 5,500 than attain above 6,500 for the primary time. The index has been flirting with an all-time excessive in latest buying and selling.
The economic system: A recession remains to be within the playing cards, based on the CFOs, with over half (55%) saying they count on a downturn both within the second half of this yr, or in 2026. Most of that pessimism is geared to the second half of this yr, and is probably going tied to tariffs and CFO considerations about shoppers who they imagine aren’t absolutely ready for value hikes, in addition to considerations in regards to the labor market softening.
And in terms of a intestine examine on the general path within the economic system, the CFOs are near evenly cut up, with just a little underneath half saying they’re “considerably optimistic” in regards to the economic system, however nonetheless a slight tilt to the “pessimistic” camp.
On a latest name of CFO Council members usually scheduled to debate the financial outlook on weeks when the Federal Reserve’s FOMC meets to set price coverage, one retail CFO informed their friends, “my most important concern is that the buyer feels just like the pricing that they are seeing at the moment, it is already impacted by tariffs … and they also’re respiratory a sigh of aid that they’ve already seen the affect of tariffs, what it’ll price them. … it is August and past the place we’re actually going to see these points. … My huge concern is the buyer thinks that they are in nice form … that they’ve seen the affect, they usually have not seen it but.”
One other CFO added, “I really feel just like the Fed has an particularly troublesome job proper now, provided that we’re beginning to see some cracks within the financial knowledge, however the impacts of tariffs in actuality might not come till a a lot, a lot later time limit.”
Seventy-two p.c of CFOs stated tariffs will trigger resurgent inflation.