House Republicans took a couple of big steps forward on their sweeping, partisan budget bill on Wednesday via key committee votes that advanced both a package of tax cuts and some major Medicaid changes meant to help pay for the tax breaks. Republican leaders still face major challenges, though, as factions within their narrow majority continue to raise objections to elements of the overall plan, including the limit on state and local tax deductions and the size of Medicaid spending cuts.
* The House Ways and Means Committee approved the GOP tax plan in a party-line 26-19 vote after a contentious hearing that stretched through the night. The tax package would make the 2017 Trump tax cuts permanent and temporarily eliminate taxes on tips and overtime pay. It would also create new tax breaks for seniors and auto loans on American-made cars while providing a larger Child Tax Credit. To make up for some of the costs, it would roll back a host of clean energy credits.
Overall, the tax changes are projected to cost $3.8 trillion over 10 years, according to Congress’s Joint Committee on Taxation. On average, taxpayers would see their federal taxes drop 11.1% in 2027, JCT said, though the average reduction would fall to 8% by 2029 and 5.3% by 2031. Taxpayers making more than $500,000 would see their tax bills fall by $169 billion as of 2027, while those making between $50,000 and $100,000 would save about $91 billion.
* In another hearing that started Tuesday afternoon and extended deep into Wednesday, the House Energy and Commerce Committee voted 30 to 24 along party lines to advance its section of the sweeping legislation, including hundreds of billions of dollars in cuts to Medicaid spending achieved through new work requirements, increased eligibility checks and other changes.
* The House Agriculture Committee is still marking up the final part of the package, including cuts to food assistance, in a hearing that started Tuesday and resumed this morning.
The individual elements of the bill cleared by House Committees will next be taken up by the House Budget Committee, which will stitch the sections together in preparation for a floor vote. The committee has scheduled a markup for Friday morning.
Johnson expresses optimism, but hurdles ahead: “The bill’s coming together,” Speaker Mike Johnson told reporters in the morning, insisting that Republicans were still on schedule to meet his Memorial Day deadline for passing the package through the House. “This will be one of the most consequential pieces of legislation ever passed by the United States Congress,” he said.
Republican leaders still have plenty of details to button up and votes to lock down, though. They reportedly will hold a conference-wide meeting on Thursday so that members can raise any issues before the package moves to the Rules Committee next week.
GOP members from blue states are still pushing for an increase in the deductibility of state and local taxes and threatening to withhold their votes if they don’t get it. The tax plan approved by the Ways and Means panel would triple the current $10,000 cap, created by the 2017 Republican tax law, for tax filers with incomes under $400,000. A group of blue state Republicans rejected that proposal and criticized the approach taken by Ways and Means Chairman Jason Smith.
“We’re still a ways apart as far as I and my other SALT colleagues are concerned,” Rep. Mike Lawler of New York told CNN Wednesday morning. “We have been waiting for months for leadership, for Chairman Smith of the Ways and Means Committee to actually negotiate with us over this number, and they waited until the last minute and tried to jam us with a $30,000 number with a $400,000 income cap. That’s unacceptable and we said no very clearly, and so we’re going through the process of finally negotiating with leadership to come to hopefully an agreement.”
Conservatives, meanwhile, are angry that the new Medicaid work requirements wouldn’t kick in for years.
Johnson insisted to reporters on Wednesday that Republicans aren’t cutting Medicaid. “We have said repeatedly we are protecting Medicaid for the people who need and deserve it,” he said at a news conference. “This program is a central lifeline for our most vulnerable Americans — pregnant women, single mothers, low-income seniors, the disabled. That’s who Medicaid is intended to be for, and that’s who we’re protecting.”
The non-partisan Congressional Budget Office projected that the Republican plan would lead to 10.3 million people losing Medicaid or CHIP coverage by 2034 and 7.6 million people being left without insurance coverage.
The bottom line: House Republicans are moving closer, but they still have some adamant opposition to overcome as they aim for a vote on the House floor next week. And the package is certain to face more hurdles in the Senate if or when it gets there. Republican Sens. Ron Johnson and Josh Hawley have already said they’re opposed to the package in its current form. “The ‘big, beautiful bill,’ I think that’s the Titanic,” Johnson said at a Politico event where he again pushed for more spending cuts. “I think that’s going down because I think I have enough colleagues in the Senate that this has resonated with, that say, ‘yeah, we have to return to a reasonable pre-pandemic spending.’”