House Speaker Mike Johnson said Wednesday that congressional Republicans must make temporary federal income-tax deductions for qualified tips and overtime permanent, tying their continuation to the outcome of the November midterm elections.
Johnson made the commitment during a press conference at PepsiCo’s Frito-Lay manufacturing facility in Casa Grande, where he joined Treasury Secretary Scott Bessent and Rep. Juan Ciscomani (R-AZ-06) for a factory tour and roundtable discussion with Arizona manufacturers and business leaders.
Responding to a question from AZ Free News about the provisions’ scheduled expiration after 2028, Johnson said Republicans intend to pursue an extension.
“We have to make these tax cuts permanent,” Johnson said during the press conference. “We have to ensure that the great benefit that people are feeling right now continues.”
The Working Families Tax Cuts established deductions for qualified tips and overtime compensation beginning with the 2025 tax year and continuing through 2028. The tips deduction is capped at $25,000 annually, while individuals may deduct up to $12,500 in qualified overtime compensation, or $25,000 for married couples filing jointly. The overtime deduction applies to compensation exceeding a worker’s regular rate of pay, such as the additional half-time portion of time-and-a-half wages, according to the Internal Revenue Service.
Johnson argued that continued Republican control of Congress would be necessary to extend the provisions.
“If the Republicans lose control of the Congress in this election cycle in 2026, you can kiss those tax cuts goodbye,” Johnson said.
He also said no Democratic members of the House or Senate supported the tax package and argued that the November election would determine whether Congress extends its temporary provisions.
The law, enacted as Public Law 119-21, permanently extended several provisions of the 2017 Tax Cuts and Jobs Act while establishing the temporary deductions for tips, overtime, qualifying vehicle-loan interest, and eligible seniors. The Congressional Budget Office (CBO) estimated that the law would increase primary federal deficits by approximately $3.4 trillion between 2025 and 2034 through a $4.5 trillion reduction in revenues, partially offset by $1.1 trillion in lower direct spending. A separate CBO estimate placed the total deficit effect at approximately $4.1 trillion when additional debt-service costs are included.
Arizona adopted corresponding state income-tax deductions for qualified tips and overtime through the budget agreement between Arizona Republicans and Gov. Hobbs in June.
Bessent, Johnson, and Ciscomani toured the Casa Grande facility before meeting with local business owners and managers to discuss manufacturing, taxation, and economic growth. The City of Casa Grande lists more than 300 associates at the Frito-Lay facility, which produces Lay’s, Fritos, Tostitos, Doritos, and Cheetos products.
Bessent said in a post on X that the visit focused on the administration’s “America First pro-growth economic agenda” and the effects of the Working Families Tax Cuts one year after President Donald Trump signed the legislation.
One year after President Trump signed the Working Families Tax Cuts into law, the promise of the American Dream is extending to every factory floor. It was great to join Speaker Johnson and Congressman Ciscomani at the Frito-Lay facility in Casa Grande, Arizona to discuss how the… pic.twitter.com/crTUUOySqx
— Treasury Secretary Scott Bessent (@SecScottBessent) August 6, 2026
The Treasury Department says 97 percent of filers received a tax cut compared with what they would have owed if the 2017 tax provisions had expired. The Treasury reported $325 billion in total refunds, $82 billion claimed through individual tax-relief provisions, and an average refund of approximately $3,300.
During the press conference, AZ Free News asked Ciscomani what specific economic developments in the Sixth Congressional District could help reverse the continuing financial pressure facing Arizona households and the state’s declining workforce participation.
The question cited a recent Common Sense Institute (CSI) analysis, which found that Phoenix-area prices remained 33.4 percent higher than in June 2019. CSI estimated that the higher price level is costing a typical Arizona household an additional $1,673 per month.
Arizona’s unemployment rate also increased to 4.9 percent in June, its highest level since the COVID-19 pandemic, while labor-force participation fell to 60.3 percent. The participation rate was near the state’s 10-year low after declining for five consecutive months.
Ciscomani responded by citing projected increases of between $7,400 and $10,600 in take-home pay for an average Arizona family and approximately $3,500 in lower taxes. He also pointed to accounts from parents on a youth football team he coaches who told him they had received the largest tax refunds of their lives.
“This is real money back in people’s real pockets,” Ciscomani said.
The $7,400-to-$10,600 figure has been promoted by Republican lawmakers as a projected increase in take-home pay. It is separate from the Treasury’s reported national average refund of approximately $3,300. Rep. David Schweikert (R-AZ-01) previously described the estimate as including lower taxes and projected wage growth.
“Our opponents on the Democrat side believe that just either freebies or more government programs are the ones that create that. And creating more government jobs is not. Creating jobs is what this company here is doing by expanding and hiring more people, improving the safety of the company, and also attracting more people to work here. That is what’s actually moving forward.”
Ciscomani said allowing families to retain more of their earnings would increase consumer spending and stimulate private-sector job creation. He cited the host facility’s expansion and hiring as an example of private-sector economic activity.
“From the numbers that we know as statistics and also testimonials that I hear about everywhere I go, we know that families are overall doing better,” Ciscomani said.
He acknowledged that Arizona families continue to face financial difficulties and attributed much of the remaining pressure to inflation experienced during former President Joe Biden’s administration.
“Are there hardships? Are there things that people are struggling with? Absolutely,” Ciscomani said. “And we don’t ignore that.”
Ciscomani said the country was “clawing” its way out of the earlier inflationary period and described the economy as moving in the right direction. “We have more work to do, but we’re definitely on the right track.”
Johnson concluded that maintaining Republican congressional majorities would be central to extending the tips and overtime provisions beyond their current expiration.
“Elections have consequences,” Johnson said. “They really do.”
Treasury Secretary Scott Bessent is expected to visit Arizona on Wednesday and Thursday, with stops including a Casa Grande appearance alongside House Speaker Mike Johnson (R-LA) and Rep. Juan Ciscomani (R-AZ-06). The tentative itinerary, provided exclusively to AZ Free News by Treasury Department officials, also includes meetings with manufacturers, business leaders, and community bankers.
Bessent is scheduled to travel to the state on August 5 and 6 to discuss the Trump administration’s economic agenda and efforts to strengthen the integrity of the nation’s financial system, Treasury officials said.
The visit will include a tour of a manufacturing facility in Casa Grande with Johnson and Ciscomani. The three officials are also expected to participate in an economic roundtable with Arizona business leaders.
The Treasury Department had not yet publicly identified the manufacturing facility as of Monday night.
The administration plans to use the event to highlight the effects of the tax and business provisions it refers to as the Working Families Tax Cuts, including incentives for domestic manufacturing and capital investment.
The tax provisions were enacted as part of Public Law 119-21, which President Donald Trump signed on July 4, 2025. The law permanently extended several provisions of the 2017 Tax Cuts and Jobs Act and created temporary federal income-tax deductions for qualified tips and overtime compensation.
The law also allows businesses to immediately deduct qualifying research and development costs and the cost of certain equipment and machinery. It provides accelerated deductions for qualifying investments in new and expanded manufacturing facilities, according to a White House summary.
Arizona Republican lawmakers and Governor Hobbs reached a bipartisan budget agreement in June that eliminated state income taxes on qualified tips and overtime, increased the standard deduction, and added other tax provisions tied to the federal law. Republican legislative leaders described Arizona as the only state to fully adopt the federal tax package at the state level.
🚨FOR IMMEDIATE RELEASE: Arizona Becomes Only State in the Nation to Deliver Historic Trump Tax Cuts As Part of Bipartisan FY 2027 Budget Agreement
The White House, citing a National Association of Manufacturers analysis, said the law’s manufacturing provisions sustained an estimated 119,000 Arizona jobs, $22 billion in state economic output, and $11 billion in wages.
The Congressional Budget Office (CBO) estimated that the law would increase federal deficits by approximately $3.4 trillion from 2025 through 2034, excluding macroeconomic and debt-service effects. The CBO attributed the increase to an estimated $4.5 trillion reduction in revenues, partially offset by a $1.1 trillion reduction in direct spending.
During a separate engagement, Bessent is expected to meet with community bankers from across Arizona alongside Comptroller of the Currency Jonathan Gould.
Bessent and Gould reportedly plan to discuss the administration’s efforts to reduce regulatory burdens on community banks and expand their ability to finance local businesses and economic development.
Reducing regulatory and supervisory burdens on community banks has been one of Gould’s stated priorities. The agency said in May that it had begun tailoring examinations according to a bank’s size, complexity, and risk profile, while giving smaller institutions greater flexibility to use a simplified capital framework.
The Office of the Comptroller of the Currency (OCC) has also revised its model-risk guidance and narrowed the scope of information-technology and cybersecurity examinations for community banks, according to an agency announcement.
“Community banks are anchors of local economies, providing essential banking services and small business lending that helps power job creation,” Gould said in the announcement.
The Arizona meeting is also expected to address the administration’s campaign against fraud, identity theft, money laundering, and other illicit activity involving the financial system.
Trump issued an executive order in May directing Treasury and federal banking regulators to strengthen customer-identification requirements and consider changes to regulations implementing the Bank Secrecy Act.
The order directed Treasury and federal financial regulators to propose stronger risk-based customer due-diligence requirements and consider changes to customer-identification rules. It instructed regulators to examine the use of foreign consular identification documents, invalid or mismatched Social Security and taxpayer-identification numbers, payroll-tax schemes, and accounts associated with workers who lack employment authorization.
It also directed financial regulators to consider whether banks should obtain additional information concerning immigration status and employment authorization when those details are relevant to fraud, identity misrepresentation, sanctions evasion, or another identified financial risk.
The Treasury’s Financial Crimes Enforcement Network (FinCEN ) subsequently issued a June 5 advisory urging banks and other financial institutions to identify and report suspicious activity associated with identity theft, payroll fraud, and the unlawful employment of people without work authorization.
FinCEN said some employers conceal unauthorized workers by using stolen identities, mismatched Social Security numbers, false payroll information, or off-the-books payment arrangements. The agency reported that financial institutions filed suspicious activity reports involving more than $2.5 billion in transactions associated with potential payroll-tax fraud during 2025.
The advisory was issued jointly with the Federal Deposit Insurance Corporation, OCC, and the National Credit Union Administration, and in coordination with the Internal Revenue Service.
The Treasury Department said Bessent and Gould will discuss how Arizona community banks can support the administration’s enforcement efforts while continuing to provide financing and banking services to local businesses.
Additional details regarding the facility, participating business leaders, event times, and press access are expected later on Tuesday.
The Center to Advance Security in America (CASA), a nonpartisan organization committed to enhancing national safety and security, has formally filed a complaint against Arizona Democratic Senator Ruben Gallego (D-AZ) with the Senate Select Committee on Ethics.
The complaint, written by CASA Director James Fitzpatrick, accuses Gallego of violating Senate ethics rules through comments that allegedly threaten physical violence against House Speaker Mike Johnson and falsely claim he is “protecting pedophiles.”
CASA’s complaint, addressed to Chairman James Lankford (R-OK) and Vice Chairman Chris Coons (D-DE), demands a thorough investigation and appropriate disciplinary measures.
The organization argues that Gallego’s statements not only breach the Senate Ethics Manual’s standards for moral and ethical conduct but also risk inciting further political violence in an already volatile climate.
The ethics manual, which CASA is referring to, states, “The Senate of the United States is a responsible political body, important in the maintenance of our free institutions. Its members are expected to conduct themselves with a proper respect for the principles of ethics and morality, for senatorial customs based on tradition, and with due regard for the importance of maintaining the good reputation of the Senate as the highest legislative body in the Nation.”
The complaint traces back to a heated in-person exchange in the U.S. Capitol on October 8, 2025, between Gallego, a former U.S. Marine, and Speaker Johnson.
The following day, October 9, Gallego amplified the incident via an Instagram post captioned, “Mike Johnson doesn’t know that’s not why Marines fold their arms.” In the video, Gallego remarked, “And he should be happy I had my arms folded. There’s a reason why Marines fold their arms. It’s because it’s a way to make sure that we restrain ourselves.”
CASA interprets this as an implied threat of physical assault, emphasizing Gallego’s military background as a factor heightening its significance.
“Given Gallego’s military training as a Marine, he has the physical capabilities to inflict serious bodily harm,” mentioned CASA in the complaint. “Any threat whatsoever to any federal official should be taken seriously. But Gallego threatened the Speaker of the House. The Speaker is second in line to be President and a key official for continuity of the American government.”
Intensifying the issue, Gallego joined fellow lawmakers for a press conference outside the Capitol on October 15, 2025, where CASA called the accusations against Johnson false.
“Speaker Johnson is protecting pedophiles; that is what this is all about,” declared Gallego. “The only reason Adelita Grijalva is not being sworn in right now is because he wants to protect whatever is in those files and all the pedophiles that would be revealed, and he wants to make sure every day that doesn’t happen. He has one more day to protect all those pedophiles, whether it’s involving Donald Trump or any of his rich elite friends.”
Fitzpatrick’s letter brands this as “defamation per se,” asserting that Gallego “knows this statement is false and he is acting with malice and reckless disregard for the truth in stating it.”
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
Americans are fed up with the endless partisan chaos pouring out of Washington, D.C. For too long, radical extremists have hijacked our government—stalling progress, undermining confidence, and jeopardizing the American Dream for future generations.
Instead of restoring faith in our republic and passing a clean continuing resolution, Democrats have decided the best idea to survive the second Trump administration is to shut down the federal government, hurting families nationwide and risking our nation’s stability and security. Unfortunately, thanks to the Democrats’ obstinance, this shutdown is quickly becoming one of the lengthiest in our country’s history.
The Democrats’ shutdown, brought about by their pursuit of extremist policies is reckless. According to the Republicans on the U.S. House Committee on Appropriations, the Democrats’ counter proposal included free health care for illegal aliens, electric vehicle access to HOV lanes, taxpayer-funded criminal defense, liberal news programs, DEI projects in foreign countries, and Biden administration grant policies and COVID-era subsidies. These policies rank among the most radical ideas from the left—part of a broader plan to disregard the will of the American people in the General Election of 2024 and continue their transformation of our nation away from the principles that have made the United States the strongest and most prosperous in world history.
Their actions have jeopardized paychecks and services across the country. Families, small businesses, and seniors are being squeezed by the 2025 federal government shutdown. According to the White House Council of Economic Advisors, states would see a decline of billions of dollars of their gross state product each month during the shutdown, thousands of workers would find themselves unemployed weeks away from the holiday season, and Social Security benefits by check would be delayed.
It’s important to note these are just a few of the catastrophic issues facing everyday Americans due to the Democrats’ shutdown shenanigans. The Democrats have compromised pay to our brave men and women who serve in our military and on the front lines of our border. Rather than doing their job, most U.S. Senate Democrats, including Arizona’s own Mark Kelly and Ruben Gallego, have voted twelve times (and counting) to obstruct efforts to reopen the government. This is shameful, but Democrats feel no shame in their blindly partisan rampage to hurt their own constituents. U.S. House Democrat Whip Katherine Clark put her party’s position best when she said, “I mean, shutdowns are terrible and, of course, there will be, you know, families that are going to suffer…. But it is one of the few leverage times we have.”
Worse yet, though, America’s enemies are watching for any opportunity to exploit our weaknesses. China, Russia, and other adversaries are studying this shutdown as they look for ways to take down the world’s greatest superpower. The leaders of these nations see the Democrats’ extremist desires and how those policies conflict with efficient operations to keep America running. They read the stories about the family members of our troops wondering how they might pay bills and put food on the table the longer the shutdown continues, hurting the morale of our military in a critical time for the world. Our enemies are not stupid or ignorant. They are recalculating and recalibrating thanks to the radical left.
Despite these clear and present dangers, Democrats are doubling down on their decision to shut down the government, creating spectacles to distract from harms their antics impose on everyday Americans. One of the top sideshows Democrats have exploited this month is the election of Adelita Grijalva to fill her father’s seat in Arizona’s Seventh Congressional District. Because the U.S. House of Representatives has not been in regular session since her victory, House Speaker Mike Johnson has not had the opportunity to swear her in to office. These facts, however, have not stopped Democrats from harassing Speaker Johnson and other Republicans over this continued vacancy (for legitimate reasons they are alone responsible for). Even Arizona Attorney General Kris Mayes got in on the “fun,” transmitting a letter to the Speaker to threaten legal action if Grijalva was not allowed to assume her position immediately. While Democrats know Grijalva will certainly be sworn in to office, her vacant seat has been used for political fodder.
Americans are not amused, nor are they fooled. A recent poll from YouGov/The Economist showed that more respondents than the week prior blamed Democrats for the shutdown, and that a majority trust Republicans for economic issues. Hardworking men and women around the nation are disgusted with the never-ending partisan games being played at their expense. They want results and the promise of a brighter future for their children and grandchildren—not one-sided political standoffs that jeopardize the happiness, safety, and security of countless families.
This shutdown is not about helping Americans; it’s about defending unpopular priorities like protecting welfare programs for illegal immigrants. It is time for Democrats—both in Congress and across the nation—to end the political games and put hardworking Americans first. Time is of the essence. Let’s open the government and get back to work!
Warren Petersen is the President of the Arizona State Senate and represents Legislative District 14.
Arizona Senator Ruben Gallego sharply criticized Republican leaders over the Democrat-led federal government shutdown during an appearance on CBS’s The Late Show with Stephen Colbert this week. Gallego claimed that the impasse threatens health care affordability nationwide
The segment spotlighted the Democrat-instigated federal government shutdown and the looming expiration of enhanced Affordable Care Act (ACA) subsidies, which could drive up premiums as open enrollment begins November 1st. The interview played out like an in-kind political ad for Gallego.
The subsidies, extended under the 2021 American Rescue Plan as a form of COVID relief, eliminated income caps for marketplace eligibility, allowing households above 400% of the federal poverty level to receive aid.
Host Stephen Colbert teed up the Democratic position for the softball interview: “Well, this shutdown has gone on for 29 days. If I can characterize the position the Democrats want the Republicans to address [as] the lapsing of the tax credits and ACA, the Obamacare, so people are going to see the rates jump up starting in November, right?”
Gallego detailed the stakes for his state. He noted that premiums could surge nearly 50% for a family of four earning up to $128,600 annually—or a family of five up to $150,600—potentially adding about $7,000 to yearly costs. He said, “And things are hard right now. I mean, everything is fricking expensive, and now the government, these Republicans, are going to willingly raise people’s premiums. That’s what’s happening right now.”
The senator, who has continued to cash his congressional paychecks during the shutdown, directed fire at GOP figures absent from negotiations. He accused House Speaker Mike Johnson of being “off hiding somewhere with the Epstein list” and quipped about former President Donald Trump, saying, “I don’t know where the hell Trump is. But I think he’s probably in Korea putting on a crown or something like that.”
Gallego stressed the fallout for ordinary Americans: “Either way, our people, everyday working-class people in this country are hurting right now.”
Just two weeks ago, Gallego claimed he needed to “restrain” himself in the presence of Speaker Johnson when he and Sen. Mark Kelly confronted the Speaker in a Capitol hallway.
Gallego’s account seems to ignore a point that Senate Majority Leader John Thune exposed explosively from the Senate floor Monday night when he said, “The senator from New Mexico is absolutely right; SNAP recipients shouldn’t go without food. People should be getting paid in this country, and we’ve tried to do that 13 times—and you voted no 13 times! This isn’t a political game; these are real people’s lives we are talking about, and you have all just figured out 29 days in that, oh, there may be some consequences?!?”
.@LeaderJohnThune: “The senator from New Mexico is absolutely right; SNAP recipients shouldn’t go without food. People should be getting paid in this country, and we’ve tried to do that 13 times—and you voted no 13 times! This isn’t a political game; these are real people’s lives… pic.twitter.com/BFpIAgXhOX
Instead, Gallego took the time to leverage his well-worn rags-to-Senate story—from a single-mother home to advocating for economic opportunity —continuing what appears to be a soft start to 2028 White House ambitions.
Arizona State Representative Nick Kupper (R-LD25) took to X to respond to Gallego’s post, sharing the interview. Gallego wrote, “The fact that someone like me ended up where I am is proof that this country can still be great. But that promise doesn’t survive on its own. We have to fight for it.”
The fact that he’s on this late night show slinging his crap is more proof that this is all just performance art. https://t.co/ANRPBqjF6H
Kupper, seemingly unimpressed, reposted him, quipping: “The fact that he’s on this late-night show slinging his crap is more proof that this is all just performance art.”
The full interview is available on YouTube and Paramount+.
