House Republicans failed to push their massive tax relief and spending cuts package through the U.S. Congressional Budget Committee today and it will not be voted on, as a small number of conservatives joined Democrats in a surprise decision.
That has stalled House Speaker Mike Johnson's efforts to pass the bill next week, for now. But some lawmakers have vowed to stay through the weekend to negotiate changes before US President Donald Trump returns to Washington from the Middle East.
Far-right Republican lawmakers are pushing for deep cuts to Medicaid spending and an end to former President Joe Biden's green agenda tax breaks before they back Trump's legislation. They warn that tax cuts alone would add to the nation's already $36 trillion debt.
Conservatives are pushing for deeper cuts to Medicaid and other programs to offset the cost of the tax cuts. But at the same time, lawmakers from high-tax states, including New York, are demanding bigger tax cuts, known as SALT, for their constituents.
Johnson says Republicans are on track to pass the bill, which he believes will bring a measure of stability to a shaky economy. Democrats have condemned the package. They point out that millions of people would lose health insurance if the bill passes, while the wealthiest Americans would get huge tax breaks. They also say it will increase future deficits.
The Budget Committee is one of the last stops before the package is sent to the House of Representatives for a vote, which is expected as early as next week. But Republicans have a narrow majority in the House.
Conservative opponents from the Freedom Caucus are pushing for deeper cuts, especially to Medicaid. They want new work requirements for recipients to begin immediately, not Jan. 1, 2029, as the package proposes.
The package of measures extends existing income tax cuts approved during Trump's first term and adds new ones that the president advocated for in the 2024 campaign, including eliminating taxes on tips, overtime and some auto loans.
It also increases some tax breaks for middle-income earners, including an increased standard deduction of $32.000 for joint filers and a temporary increase in the child tax credit of $500. It also provides $350 billion for Trump's deportation plan and to bolster the Pentagon.
To make up for more than $5 million in lost revenue, the package proposes to eliminate other green energy tax breaks approved as part of President Joseph Biden's Inflation Reduction Act.
The package also aims to cover costs by cutting more than $1 billion from health care and food assistance programs over a decade, in part by imposing work requirements for working-age adults.
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