Conservative Legislators Foil President Trump's Ambitious Tax Reduction Legislation in a Remarkable Defeat
New Take:
House Republicans Stumble in Push fortax Breaks and Spending Cuts
WASHINGTON - A setback struck House Republicans on Friday as they failed to push their tax breaks and spending cuts bill through the Budget Committee, with a handful of conservatives and Democrats standing united against it.
The conservative lawmakers, often from the Freedom caucus, pushed for steeper Medicaid cuts and cuts to Biden-era green energy tax breaks, among other changes, citing concerns over piling onto the nation's $36 trillion debt.
The failing vote, 16-21, delays House Speaker Mike Johnson's push to approve the bill next week, but the Budget Committee plans to reconvene Sunday to revisit the matter. As Trump returns from the Middle East, lawmakers plan to negotiate through the weekend.
"Something's gotta change or you're not gonna get my support," said Rep. Chip Roy, R-Texas.
The One Big Beautiful Bill (OBBB) Act, named with a wink to Trump, faces a pivotal moment. Johnson seeks to inject stability into the wavering economy by resolving issues with the OBBP.
With votes to spare in their slim majority, the Republicans aim to pass the OBBP over the staunch objections of the Democrats, who dismissed it as a "divisive, destructive piece of legislation."
In the run-up to the vote, Trump encouraged his party to unite behind the bill. "Republicans MUST UNITE behind, 'THE ONE, BIG BEAUTIFUL BILL!'" he tweeted. "We don't need 'GRANDSTANDERS' in the Republican Party. STOP TALKING, AND GET IT DONE!"
The Budget Committee is the final stop before the package moves to the full House floor for a vote, which is still expected next week. Traditionally, the committee compiles the work of 11 committees that drafted the various parts of the bill.
However, Friday's meeting proved significant before the votes were even cast.
Four Republican conservatives voted against the bill - Roy and Reps. Ralph Norman of South Carolina, Josh Brecheen of Oklahoma, Rep. Andrew Clyde of Georgia. One, Rep. Lloyd Smucker of Pennsylvania, later changed his no vote to abstain, allowing for a potential reconsideration.
Conservatives are prioritizing deeper reductions, particularly in Medicaid, where they wish for immediate work requirements for aid recipients, rather than 2029 as proposed in the bill.
Democrats warned of health coverage and food assistance losses for millions of Americans, while wealthy individuals could reap enormous tax cuts. The package is also expected to increase future deficits.
Meanwhile, talks are ongoing with high-tax-state GOP lawmakers aiming for a larger state and local tax (SALT) deduction, which could significantly increase the bill's overall cost. As it stands, the bill triples the current $10,000 cap on the SALT deduction, increasing it to $30,000 for joint filers with incomes up to $400,000.
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The OBBP extends and adds new income tax cuts from Trump's first term and promises further individual and business tax breaks, including no taxes on tips, overtime pay, and some auto loans. It also provides a $350 billion injection for Trump's deportation agenda and strengthens the Pentagon.
To offset the more than $5 trillion in lost revenue, the package proposes rolling back other tax breaks, such as the green energy tax credits, which some conservatives want to eliminate immediately. The package also seeks to offset costs by slashing over $1 trillion from health care and food assistance programs over a decade through imposing work requirements and shifting costs to states.
The Congressional Budget Office estimates these changes could result in at least 7.6 million fewer people with health insurance and about 3 million fewer SNAP recipients each month. While Republicans maintain the bill will pay for itself, outside budget analysts assert it could add trillions to the nation's deficits and debt.
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Correction: An earlier version of this story misrepresented the package's intended offset for lost revenue as $5 million instead of $5 trillion.
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Associated Press writer Leah Askarinam contributed to this report.
- The Washington Post reported that Microsoft, the world's most valuable company, has initiated staff cutbacks, causing ripples in the tech-centric Seattle business scene.
- Concurrently, Boeing, another significant player in the Seattle area, has started its recovery from a prolonged crisis with a record airplane deal with Qatar Airways.
- Meanwhile, in the realm of health care and politics, discussions are underway regarding changes to Medicaid policy, with conservatives advocating for immediate work requirements for aid recipients as part of policy-and-legislation revisions.
- In a completely different context, the FBI is investigating a series of car-accidents in the city, raising questions about crime-and-justice and public safety.
- On a broader scale, economists are closely monitoring the impact of the ongoing war-and-conflicts in the Middle East on the global economy and general-news headlines.
- As fires continue to ravage various regions across the country, officials are calling for increased funding and policy changes to improve fire-prevention measures and emergency response systems. These incidents underscore the need for holistic policies addressing both environmental and public-safety concerns.
