Trump’s Big Bill Squeaks Through House, Setting Up Senate Battle

Speaker Johnson announced the vote total.
Reuters
By Yuval Rosenberg and Michael Rainey

They did it. House Republicans led by Speaker Mike Johnson managed to come together and pass their sweeping tax and spending bill. Here's what you should know.

Trump's Big Bill Squeaks Through House, Setting Up Senate Battle

House Republicans delivered a huge win for President Donald Trump and Speaker Mike Johnson early Thursday morning, overcoming weeks of infighting and days of tense final negotiations to narrowly pass the massive bill containing their domestic policy priorities, including trillions of dollars in tax cuts as well as reductions to Medicaid spending and new funding for the military and border enforcement.

The package was approved in a 215-214 vote shortly before 7 a.m., meeting Johnson's self-imposed deadline to send the measure to the Senate before Memorial Day. (See more about what's in the bill here, here, here or below.)

Trump touted the passage in typically Trumpian terms: "This is arguably the most significant piece of Legislation that will ever be signed in the History of our Country!" he wrote in a post on social media that also called for the Senate to send the bill to his desk quickly.

Johnson called the vote a historic moment that will long be remembered and said that the bill itself was "nation-shaping" and "life-changing."

"This one big, beautiful big is the most consequential legislation that any - any - party has ever passed, certainly under a majority this thin," the speaker said on the House floor before the vote. "We planned, and we worked, and we locked arms together as a team, and we have delivered this against all odds."

Johnson's furious scramble to sway two groups of holdouts led to a 42-page manager's amendment, released Wednesday night, that made a slew of last-minute modifications to the legislation in the Rules Committee, which advanced the bill and set up an all-night debate leading to the early morning floor vote.

The speaker admitted there were moments when the outlook was bleak. "I'm just going to be very blunt about it: There was a few moments over the last week when it looked like the thing might fall apart, and I went to the little chapel over here and got on my knees and prayed that these guys would have wisdom and stamina and discernment," he said about the Republicans flanking him.

In the end, just two Republicans opposed the bill: Thomas Massie of Kentucky and Warren Davidson of Ohio. "While I love many things in the bill, promising someone else will cut spending in the future does not cut spending," Davidson wrote in a social media post. "Deficits do matter and this bill grows them now. The only Congress we can control is the one we're in. Consequently, I cannot support this big deficit plan."

Three other Republicans didn't vote for the plan. Rep. Andy Harris of Maryland, the chairman of the House Freedom Caucus, voted "present." Rep. Andrew Garbarino of New York "fell asleep in the back" after the all-night session and accidentally missed the vote, Johnson told reporters. And Rep. David Schweikert of Arizona tried to vote too late, the speaker said.

Democrats continued to blast the package, warning that it will take health care coverage and SNAP food aid away from millions of Americans to help pay for tax breaks for the wealthy that will also increase the deficit. House Democratic Leader Hakeem Jeffries previewed what's likely to be a prominent Democratic line of attack in next year's elections: "Children will get hurt. Women will get hurt. Older Americans who rely on Medicaid for nursing home care and for home care will get hurt. People with disabilities who rely on Medicaid to survive will get hurt. Hospitals in your districts will close. Nursing homes will shut down. And people will die. That's not hype. That's not hyperbole. That's not a hypothetical."

A rewrite coming in the Senate: The bill now heads to the Senate, where Republicans are already eyeing changes that could threaten the narrow victory eked out by their House counterparts. Johnson earlier this week urged senators not to make significant changes to the House plan for fear of disrupting the delicate balance that led to Friday's passage. "All the senators, every one of them, has promised me that they're not going to change anything in our bill," Johnson joked at a news conference after Thursday's vote. That drew a knowing laugh from those in the room.

The reality Republicans now face is that some GOP senators have made clear that they want deeper spending cuts while others have raised concerns about the bill's Medicaid changes, its phaseout of clean energy tax breaks, its spectrum auction or its increased deduction for state and local taxes. The $4 trillion debt-limit increase will likely also be an issue, at least for Sen. Rand Paul of Kentucky.

"Somebody's got to be the dad that says, 'I know y'all want to go to Disney World, but we can't afford it.' I guess I'm going to be that guy," said Republican Sen. Ron Johnson of Wisconsin, according to CNN.

'A fiscal failure': Budget hawks hope to see the bill change significantly given that, as written, it would add about $3 trillion to deficits, including interest costs, over the next 10 years.

"This plan is nothing short of a fiscal failure. It adds massively to the national debt, it relies on timing gimmicks and false claims about growth, it fails to make the structural spending reforms we desperately need, and it uses the important savings it does find to partially offset tax cuts rather than reduce the debt," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which advocates for deficit reduction. "The fact that lawmakers passed this bill less than a week after America's latest credit downgrade and yet another worrying Treasury auction is especially maddening. Will nothing wake our leaders up to the need to take our debt challenges seriously?"

The bottom line: With help from Trump, Johnson accomplished what many doubted could be done, but as Republican Sen. Mike Rounds told CNN, "We're a long ways from the finish line."

Chart of the Day: What's in the GOP Bill

Running more than 1,100 pages, the Republican reconciliation bill passed by the House today includes trillions in tax cuts and hundreds of billions in spending increases, as well as a smaller but still significant amount of spending reductions and other offsets. The chart below from The Washington Post's Jacob Bogage summarizes some of the major components of the bill, including the single largest element: the extension of the 2017 tax cut package, which comes with a cost of roughly $2.2 trillion over 10 years.

The bill would also increase the standard deduction, which was doubled under the 2017 tax law, adding another $2,000 per couple filing jointly and half that for single filers for the next four years, at a cost of $1.3 trillion. An increase in the child tax credit from $2,000 to $2,500 would cost about $800 billion.

Smaller tax breaks, some added to satisfy pledges made by President Trump, are sprinkled throughout the bill, including the elimination of federal income taxes on overtime (costing $124 billion over 10 years) and tips ($40 billion), tax deductions for car loan interest rates ($58 billion), and a $4,000 increase in the deduction for seniors ($72 billion), which takes the place of a promised cut in taxes on Social Security income. New $1,000 savings accounts for newborns, with the name changed from MAGA accounts to Trump accounts in the final version of the bill, would cost $17 billion.

House Republicans also agreed to raise the state and local tax (SALT) deduction from $10,000 to $40,000, a move that would save money relative to the baseline in which the cap expires. The change costs $320 billion more than the leaving the cap at $10,000 and roughly $660 billion more than allowing the cap to expire, according to an estimate by the Tax Foundation.

The GOP bill includes more than $1 trillion in offsets, led by cuts to Medicaid, which have been estimated to save more than $700 billion. The bill would establish new work rules for Medicaid beneficiaries, tighten eligibility requirements and punish states that provide healthcare to undocumented residents, resulting in 7.6 million more people going uninsured by 2034.

The bill would also phase out or repeal green energy tax credits, including a $7,500 credit for electric vehicle purchases, saving more than $600 billion. Changes in the student loan program would save nearly $300 billion, and new taxes on colleges and universities would raise $23 billion.

Overall, the plan would increase deficits by about $2.3 trillion over 10 years, according to a preliminary analysis of an earlier version of the bill by the Congressional Budget Office. The Committee for a Responsible Federal budget said that, including rising interest costs on the national debt, the tally grows to $3.1 trillion. Once updated to reflect the final version passed by the House, the CBO cost estimate is expected to rise.

Judge Blocks Trump's Closure of Department of Education

A federal judge on Thursday blocked the Trump administration from closing the Department of Education and ordered the department to rehire more than 1,300 employees terminated in a mass layoff. The judge's order also prevents the administration from shifting the management of federal student loans from the Department of Education to the Small Business Administration.

Judge Myong Joun of the U.S. District Court in Massachusetts issued a preliminary injunction in response to a request by local school districts, the American Federation of Teachers and 21 Democratic state attorneys general to block an executive order signed by President Trump in March that instructed Education Secretary Linda McMahon to begin shutting down her agency.

"We're going to shut it down, and shut it down as quickly as possible," Trump said at the time.

Joun ruled that the shutdown order is illegal, and only Congress has the authority to close the department. "The record abundantly reveals that defendants' true intention is to effectively dismantle the department without an authorizing statute," Joun wrote.

Rejects 'efficiency' argument: Lawyers representing the Department of Education defended the layoffs and resignation efforts at the agency, which has seen a decline in staffing from 4,133 employees to roughly 2,180 since Trump took office, saying the reductions were unrelated to the shutdown order and were instead an effort to make the department more efficient.

Joun rejected that argument, saying the staff reductions made it impossible for the agency to carry out its functions as required by statute. "This court cannot be asked to cover its eyes while the Department's employees are continuously fired and units are transferred out until the Department becomes a shell of itself," he wrote.

A spokesperson for the department said the administration would challenge the judge's ruling. "Once again, a far-left Judge has dramatically overstepped his authority, based on a complaint from biased plaintiffs, and issued an injunction against the obviously lawful efforts to make the Department of Education more efficient and functional for the American people," spokesperson Madi Biedermann said in a statement.

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