In a significant development in Washington, House Republicans experienced a setback on Friday as their ambitious plan of tax breaks and spending cuts failed to advance through the Budget Committee. A small group of conservatives joined forces with Democrats, leading to an unexpected vote against the proposal.
The conservative faction is demanding deeper cuts, particularly targeting Medicaid and Biden-era green energy tax breaks, asking for substantive changes before they back President Donald Trump’s much-touted “beautiful” bill. They caution that the current tax cuts could exacerbate the nation’s $36 trillion debt.
The failed vote, ending 16-21, temporarily halts House Speaker Mike Johnson’s initiative to get the package approved next week. However, the Budget Committee is set to reconvene on Sunday to address these challenges, with lawmakers promising to negotiate over the weekend while Trump returns to Washington from the Middle East.
Representative Chip Roy from Texas indicated his stance, stating, “Something needs to change or you’re not going to get my support.” At 1,116 pages, the One Big Beautiful Bill Act—a nod to Trump—is precariously positioned at this crucial moment. Johnson aims to rectify the package issues to inject stability into a wavering economy.
With a thin majority, Republicans strive to pass this bill amidst fierce Democratic opposition who refer to it as a “big, bad bill.” Representative Pramila Jayapal from Washington state even termed it “one big, beautiful betrayal.” Despite the opposition, Trump called for unity within the party, urging, “Republicans MUST UNITE behind, ‘THE ONE, BIG BEAUTIFUL BILL!’”
The Budget panel’s role is largely administrative, consolidating various committee contributions into the big bill. Yet, Friday’s meeting was crucial even before voting concluded. Members of the Freedom Caucus, and other conservatives, threatened to block the bill for more significant spending cuts. Simultaneously, New York GOP lawmakers are pushing for expanded state and local tax deductions, known as SALT.
The initial opposition included four Republican members—Chip Roy, Ralph Norman, Josh Brecheen, and Andrew Clyde. Pennsylvania’s Rep. Lloyd Smucker also voted no, expressing optimism about reaching a resolution, noting, “get this done.” Norman emphasized his stance was not in defiance of Trump, stating, “this isn’t a ‘grandstand.’”
The conservatives are particularly focused on Medicaid, aiming for immediate work requirements for aid, opposed to the January 1, 2029, date in the proposal. Democrats argue that this would strip millions of their health coverage and food assistance while heavily benefiting the wealthy with tax cuts, also stressing potential increases in future deficits.
Talks are also ongoing with New York representatives calling for a larger SALT deduction than proposed. The current bill tripling the state and local tax deduction cap to $30,000 for joint filers earning up to $400,000 faces demands for increases to $62,000 for single filers and $124,000 for joint filers from New Yorkers.
Republicans are divided on this bill, with conservatives and New Yorkers negotiating as Speaker Johnson works to pass the package by Memorial Day and send it to the Senate. Core aspects of the comprehensive package extend 2017’s income tax cuts and introduce new ones from Trump’s 2024 campaign, removing taxes on tips, overtime pay, and some auto loans.
Additional breaks include increased standard deductions for middle-income earners to $32,000 for joint filers and a temporary $500 boost to the child tax credit. It also allocates $350 billion for Trump’s deportation agenda and military enhancements.
To manage over $5 trillion in lost revenue, proposals include eliminating Biden’s green energy tax credits, with conservatives wanting these rolled back immediately. The package suggests trimming over $1 trillion from healthcare and food assistance programs over the next decade, implementing work requirements for Medicaid recipients to receive coverage.
Changes to SNAP would expand current work requirements to those aged 55-64, also increasing state financial responsibilities. The Congressional Budget Office projects that these adjustments could result in 7.6 million fewer people with health insurance and drive 3 million monthly declines in SNAP beneficiaries.
While Republicans claim the package will self-finance through economic growth, external budget analysts remain skeptical, suggesting it could significantly add to national deficits and debt.