Senate Republicans intend to propose revised tax and health-care provisions to President Donald Trump’s $3 trillion signature economic package this week, shrugging off condemnations of the legislation by Elon Musk as they rush to enact it before July 4. 

The Senate Finance Committee’s plan to extract savings from the Medicaid and — perhaps — Medicare health insurance programs could depart in key respects from the version of the giant bill that narrowly passed the US House in May. The release of the panel’s draft will likely touch off a new round of wrangling between fiscal conservatives and moderates. 

As the debate unfolds, businesses in the energy, health care, manufacturing and financial services industries will be watching closely.  

SALT dilemma

A crucial decision for Majority Leader John Thune, Committee Chairman Mike Crapo and other panel members will be how to handle the $40,000 limit on state and local tax deductions that was crucial to passage of the bill in the House. 

Senate Republicans want to scale back the $350 billion cost of increasing the cap from $10,000 to $40,000 for those making less than $500,000.   

House Speaker Mike Johnson and a group of Republican members from high-tax states have warned that any diminishing of the SALT cap would doom the measure when it comes back to the House for a final vote. At the same time, so-called pass-through businesses in the service sector are pushing to remove a provision in the House bill that limits their ability to claim SALT deductions. 

(Read more: “What the House gave the Senate: Inside the ‘Big Beautiful’ bill.“)

The Senate Finance Committee is widely expected to propose extending three business tax breaks that expire after 2029 in the House version to order to make them permanent. They are the research and development deduction, the ability to use depreciation and amortization as the basis for interest expensing and 100% bonus depreciation of certain property, including most machinery and factories.  

Manufacturers and banks are particularly eager to see all of them extended. 

To pay for the items, which most economists rank as the most pro-growth in the overall tax bill, senators may restrict temporary breaks on tips and overtime, which Trump campaigned on during last year’s election in appeals to restaurant and hospitality workers. The White House wants to keep those provisions as is.

White House economic adviser Kevin Hassett said Trump “supports changing” the SALT deduction and it’s up to lawmakers to reach a consensus.

“It’s a horse trading issue with the Senate and the House,” Hassett said Sunday on CBS’s Face the Nation. “The one thing we need and the president wants is a bill that passes, and passes on the Fourth of July.”

The committee will also face tough decisions on green energy tax credits. Scaling those back generates nearly $600 billion in savings in the House bill. 

On Friday, rival House factions released dueling statements. 

The conservative House Freedom Caucus warned that any move to restore some of the credits would prompt its members to vote against the bill. “We want to be crystal clear: If the Senate attempts to water down, strip out, or walk back the hard-fought spending reductions and IRA Green New Scam rollbacks achieved in this legislation, we will not accept it,” the group said. 

In contrast, a group of 13 Republican moderates, led by Pennsylvania’s Brian Fitzpatrick and Virginia’s Jen Kiggans, urged senators to make changes that would benefit renewable energy projects, many in Republican districts, that came about through President Joe Biden’s Inflation Reduction Act. 

(Listen: “The state of the ‘Big Beautiful Bill’ and more.“)

“We remain deeply concerned by several provisions, including those which would abruptly terminate several credits just 60 days after enactment for projects that have not yet begun construction,” the lawmakers said in a letter to the Senate. 

Banks are especially interested to ensure that tax credits on their balance sheets as part of renewable energy financing aren’t rendered worthless by the bill. 

Health-care perils

Medicaid and Medicare cuts present the most daunting challenge in the committee’s draft. While Republicans are generally in favor of new work requirements for able-bodied adults to be insured by Medicaid, some moderates like Senator Lisa Murkowski of Alaska have expressed concern over giving states just a year and a half to implement the requirement.  

Senator Lisa Murkowski House provisions instituting new co-pays for Medicaid recipients and limits on the ability of states to tax Medicaid providers in order to increase federal reimbursement payments are more disputed. 

Senators Josh Hawley of Missouri and Jim Justice of West Virginia have said they oppose these changes.  

To find savings to make up for removing these provisions, Republicans said last week that they are examining whether to put new restrictions on billing practices in Medicare Advantage. Large health insurers that provide those plans would be most affected by such changes. 

Yet overall, GOP leaders say the tax bill remains on schedule and they expect much of the House bill to remain intact. 

The Senate’s rules-keeper is in the process of deciding whether some provisions are not primarily fiscal in nature. Provisions that restrict state regulations on artificial intelligence, ending some gun regulations and putting new limits on federal courts are seen as most vulnerable to being stripped under Senate budget rules. 

Lawmakers are largely taking their cues from Trump and sticking by the $3 trillion bill at the center of the White House’s economic agenda. 

Musk, the biggest political donor of the 2024 campaign, has threatened to help defeat anyone who votes for the legislation, but lawmakers seem to agree that staying in the president’s good graces is the safer path to political survival.

“We are already pretty far down the trail,” Thune told reporters on Thursday afternoon as his colleagues left for the weekend.

I am optimistic about the “trusted advisor” destination that the accounting profession has marked as its territory, but skeptical of the partnership model as a means of transportation to that promised land. Why? It has to do with young, talented people in public accounting, and the choices that I see them make when they are equipped with complete information. 

In growing my firm, Ascend, over the last two years, I have invested thousands of hours in conversation with managing partners and executive committees. During these discussions, I have heard many firm leaders that I admire advocate on behalf of their brightest young people: “Lisa is a rockstar … how is partnering with you going to be better for her?” 

I have likewise sat in conferences where industry thought leaders proclaim private equity as “the best thing that could happen to young people;” from eyeballing it, the median age in those rooms approached 60! It is encouraging that rising stars of my generation have collectively become the object of deep concern and spirited debate as the profession learns to surf a wave of capital that is challenging tradition, but frankly, it is a shame that young leaders often lack access to the context that would allow them to form their own view and participate in conversation directly. 

That needs to change. So, “Lisa,” if you are out there, I am speaking directly to you. You and other young, talented people of our generation need information to plan for your own future, not a scripted ending penned by someone else with positive intent. Getting up to speed involves confronting the challenges of the partnership model, building awareness of alternatives, and thinking about how you should engage in discussion, once you feel informed. Here’s a crash course.

What is happening to the partnership model?

To start, ownership in a CPA firm is more expensive today than it ever has been. There is more than $15 billion of private capital (more than 1x revenue for the remaining, independent G400) that has decided an ownership stake is worth more than what your firm’s partnership agreement says it is. 

The offer on display from smart money is tempting — access to liquidity much sooner, with better tax treatment, and the chance for “multiple bites at the apple,” with resources to fuel future value creation. While a growing list of firms have opted into that deal, others still have chosen to hold steady to independence; in doing so, fiercely independent firms are beginning to reprice their partnership agreements to bridge this widening gap between the market valuation of a CPA firm and the discount that has historically been used for internal succession. 

What does that mean for you? Partner buy-ins will become more expensive and look-back provisions that allow retired partners to eat into a future sale of the firm will become more common. Young people, your partnership may persist, but the older generation isn’t going to cede all surplus economic value to you forever. It is going to cost more to become an owner, and you need to be prepared for that eventuality.

At the same time, maintaining independence is getting costlier. Independence has long been a virtue of our profession, but make no mistake, it has never been free — growth, fueled by a strong value proposition to clients and employees, is what has propped up the independent partnership model as a way of serving others, organizing talent, and creating wealth for many generations. 

Historically, this has taken periodic reinvestment to sustain — hiring talent from competitors before clients follow; putting up working capital to tuck in a new firm; sampling a la carte technology products like SafeSend and Aiwyn that hit the market. Sadly, this window-shopping pace of reinvestment is not going to cut it anymore. Our profession is navigating a rapidly changing backdrop, which is calling for expensive, transformative change in a compressed period.

Here’s what I mean: If you take the time to forecast the next 10 years of public accounting supply (i.e., credentialed CPAs in America) and demand (i.e., U.S. total addressable market), the well-documented conclusions are:

• 75% of today’s CPAs will have retired in the next decade; and,
• Revenue per CPA is projected to 2.7x during that period, because new entrants are declining. 

That alone is the most precipitous change in labor dynamics since these statistics have been tracked. What is less covered, but equally important, is that 10 years from now, more than 85% of CPAs in America will have less than 10 years of experience. Think about that: We need to achieve a 2.7x growth in personal productivity, with nine in 10 professionals having less than a decade of experience. What does a 10-year person do in your firm today? Can they drink a tsunami from a fire hose?
It all begs the question of how firm leaders are going to respond to this market-driven reality. Build a global team that can go toe to toe with U.S. CPAs on technical expertise and client service? Automate away half our billable hours? Rebuild a professional development curriculum with “Lean” manufacturing principles to cut partner cook time from 20 years to 10? All the above? 

It can be done, and the market share opportunity for firms that do this successfully is hard to overstate, but these initiatives take many millions of dollars to pursue, functional expertise to get right, and deep commitment to test, learn and, ultimately, produce results.

If you are on the outside of a partnership looking in, take a step back with clear eyes and you’ll see that you are being taxed twice for entry: once to purchase your ownership stake relative to its historical cost, and once more to make investments in your firm that are greater than ever before required, at a pace that’s unprecedented, without a guarantee of paying off. 

There are some important questions to ask as you take stock of this reality: Have you talked about how much this will cost? Would your firm be effective at deploying the money you choose to set aside? Will today’s senior partners share in the cost with you, and start now? Are you willing to spend the money for the chance of an ordinary income payout between ages 65 to 75, at a discount to the then-market price? Given how these trends affect your ability to win talent, how will you guarantee that someone will stand behind you in 25 years to make the same bet you are making today?

These questions should be discussed broadly. You may have satisfying answers, but to make forward progress as a firm, your partner group must agree with you, and there is no time to waste.

What is the alternative?

If you don’t want to merge your firm into another, the primary alternative to going it alone is to trade in the keys to your unfunded partnership for private equity backing. To offer a pithy comparison, partnering with private equity has several advantages relative to your status quo:

• Important investments are made with other people’s money;
• Corporate governance permits faster decision-making at a moment where pace matters;
• The economic model is more efficient, and can be more generous: equity participation happens earlier; ownership always trades at a market price; liquidity is more frequent and tax-advantaged;
• All of this done right creates a better place to work, and the flywheel turns; and,
• Other industries show us that the flywheel can turn indefinitely.

And yet, these easily understood benefits are subject to valid lines of inquiry from those peering in:

• If ownership changes hands frequently, who is to say the ride will be smooth?
• Are incentives aligned in a way that upholds quality standards?
• How should I sort through all the different forms of private equity that exist (local equity versus parent equity; minority versus majority, dealing with PE directly versus through an operating company like Ascend; etc.)?

All good questions, especially because not all private equity is created equally. These pros and cons can only be weighed appropriately through education, and there would be much more to discuss.

Where to go from here?

Get your seat at the table. My purpose in writing is not to drive you to a specific conclusion, but instead to give you the context needed to form your own. 

If you are on a path to becoming an owner in your firm, you are committing (consciously or not) to what is becoming one of the more expensive investments in the U.S. economy. I understand how busy practitioners are, but it is worth knowing if you are positioned to realize a return on that investment via the partnership model. 

You can do that by:

• Demanding clarity on your firm’s direction;
• Seriously assessing the “how” behind the vision that is shared with you; and finally, 
• Encouraging leadership to explore options, which I have found to sharpen thinking regardless of a firm’s ultimate decision around go-it-alone versus sponsorship.

Our generation is the one that will navigate this sea change in public accounting. Create the time to underwrite your future and make your opinion known.

As CPA firms grow into the $10 million to $100 million revenue range, operational complexity increases, especially during peak periods like tax season. Leadership must prioritize strategies to reduce friction, improve efficiency, and enhance the client and staff experience. Algorithms, defined as systematic processes designed to solve specific problems, are a key enabler in achieving these goals. 

By automating repetitive tasks, algorithms can save hundreds of hours during the busiest times, allowing staff to focus on high-value activities and improving client satisfaction.

Four specific examples of areas where algorithms can help firms are described below, but no matter the area, adopting algorithms requires deliberate planning and execution:

1. Identify opportunities

• Assess pain points in tax, audit, scheduling, and advisory workflows.
• Identify routine tasks that consume excessive time during peak periods.

2. Gather and analyze data

• Evaluate the availability of client and internal data to support automation.
• Determine additional data needs and acquisition strategies.

3. Experiment and iterate:

• Pilot small-scale solutions, such as automating a single tax form process or scheduling tool.
• Refine based on results and user feedback.

4. Scale and integrate:

• Implement successful pilots across teams or departments.
• Provide staff training to maximize adoption and effectiveness.

5. Measure and optimize:

• Use key performance indicators such as time savings, error reduction, and client satisfaction to assess the impact.

Quick wins for immediate impact

To build momentum, start with high-impact initiatives:

• Tax workflow automation: Automate the completion, e-signature, and filing of forms like 8879 and 4868, and notify clients of estimated tax payments due via an automated communication system.
• Audit data preparation: Use algorithms to download client data, generate trial balances, and perform risk analysis.
• Scheduling optimization: Implement an algorithm-driven scheduling tool to automate meeting coordination, resource allocation, and deadline tracking.

Conclusion

Algorithms are transformative tools that empower CPA firms to operate more efficiently while delivering enhanced value. By automating routine tasks in tax, audit, scheduling, and advisory services, firms can save significant time, improve accuracy, and foster stronger client relationships. The key to success lies in adopting a strategic roadmap — identifying opportunities, running experiments, and scaling solutions. Mindset is paramount.

For CPA firms navigating the challenges of growth and complexity, algorithms represent a critical investment in operational excellence, enabling staff to focus on what truly matters: delivering exceptional client experiences. Think — plan — grow!