• House Republicans’ tax and spending cuts package failed in the Budget Committee, facing opposition from conservative lawmakers and all Democrats, delaying a full House vote.
• Key provisions include extending Trump-era tax cuts, slashing over $1 trillion from healthcare and food assistance, and tripling the SALT deduction cap for joint filers earning up to $400,000.
• Critics warn the bill could worsen income inequality, increase the federal deficit, and hinder clean energy progress.

House Republicans encountered a significant challenge on Friday when their proposed tax breaks and spending cuts package failed to pass the Budget Committee. The vote, which ended 16-21, saw opposition from a group of conservative lawmakers and all Democrats. Their resistance highlights a growing divide within the party over issues such as Medicaid cuts and green energy tax credits. This development delays House Speaker Mike Johnson’s push to bring the bill to a full House vote, originally expected next week.

Conservatives Push for Deeper Cuts

Several conservative Republicans, including members of the Freedom Caucus, expressed dissatisfaction with the current draft of the bill. They are pushing for steeper reductions to Medicaid spending and the immediate repeal of Biden-era green energy tax credits. Representative Chip Roy of Texas stated, “Something needs to change, or you’re not going to get my support.”

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The group also demands that new work requirements for Medicaid recipients begin immediately, rather than in 2029 as proposed. These changes could affect millions of Americans who rely on healthcare and food assistance programs. The nonpartisan Congressional Budget Office (CBO) estimates that 7.6 million people could lose health insurance and 3 million could lose SNAP benefits monthly under the current version of the bill.

New York Republicans Demand SALT Deduction Adjustments

While conservatives seek deeper spending cuts, Republican lawmakers from high-tax states like New York are pushing for a larger SALT deduction (state and local tax). The current proposal triples the cap from $10,000 to $30,000 for joint filers earning up to $400,000 annually. However, lawmakers such as Rep. Nick LaLota argue that the cap should increase further, proposing $62,000 for single filers and $124,000 for joint filers.

This internal conflict reflects broader challenges for Speaker Johnson, who must balance competing demands while maintaining a slim Republican majority in the House.

Key Features of the Package

The sprawling, 1,116-page One Big Beautiful Bill Act, named after President Donald Trump’s campaign rhetoric, includes several significant provisions:

• Extends income tax cuts from Trump’s first term and introduces new tax exemptions for tips, overtime pay, and some auto loans.
• Increases the child tax credit by $500, raising it to $2,500 temporarily.
• Allocates $350 billion for Trump’s deportation agenda and military spending.
• Proposes slashing over $1 trillion from healthcare and food assistance programs over 10 years to offset revenue losses.

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While Republicans claim the bill will pay for itself through economic growth, financial experts remain skeptical. Outside analysts warn it could add trillions to the nation’s federal deficit.

Democratic Opposition and Broader Implications

Democrats have strongly opposed the bill, labeling it a “big, bad bill.” Representative Pramila Jayapal called it “one big, beautiful betrayal,” emphasizing its impact on low- and middle-income families. Democrats argue that the wealthiest Americans will benefit most from the proposed tax cuts, while millions of vulnerable individuals could lose critical support programs.

The CBO projects that the bill’s provisions would worsen income inequality and place additional strain on the economy. Critics also highlight that slashing green energy tax credits could hinder progress in clean energy adoption and climate goals.

What’s Next?

The Budget Committee plans to reconvene on Sunday to attempt another vote. Lawmakers vow to continue negotiations throughout the weekend. Meanwhile, President Donald Trump has urged Republicans to unite behind the bill, posting on social media, “STOP TALKING, AND GET IT DONE!”

If passed in the House, the package will move to the Senate, where additional revisions are expected. The outcome will significantly influence the fiscal landscape, affecting millions of Americans’ daily lives. The final decision may also have major political implications, shaping narratives for the 2024 elections.

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