Trump tax-cut plan returns to US House, Republicans divided on Bill

Business Times

21 hours ago

[WASHINGTON] The debate within President Donald Trump's Republican Party over a massive tax-cut and spending Bill returns to the House of Representatives on Wednesday (Jul 2), as party leaders try to overcome internal divisions and meet a self-imposed Jul 4 deadline.
The Senate passed the legislation, which nonpartisan analysts say will add US$3.4 trillion to the nation's debt over the next decade, by the narrowest possible margin on Tuesday after intense debate on the Bill's hefty price tag and substantial cuts to the Medicaid healthcare programme.
Similar divides exist in the House, which Republicans control by a 220-212 margin and where a fractious caucus has regularly bucked its leadership in recent years – though members have so far not rejected major Trump priorities.
'The House will work quickly to pass the One Big Beautiful Bill that enacts President Trump's full America First agenda by the Fourth of July,' House Speaker Mike Johnson said in a statement on Tuesday, citing the Bill's extension of Trump's 2017 individual tax cuts and increased funding for the military and immigration enforcement.
The House Rules Committee advanced the Senate Bill overnight by a 7-6 vote with two Republicans – hardliners Chip Roy and Ralph Norman – voting against it.
Johnson can afford to lose no more than three votes if all members are present, though a series of storms on Tuesday night complicated lawmakers' travel plans, prompting some to drive through the night towards the Capitol.
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Hardliner anger over spending
The loudest Republican objections against the Bill come from party hardliners angry that it does not sufficiently cut spending and includes a US$5 trillion increase in the nation's debt ceiling, which lawmakers must address in the coming months or risk a devastating default on the nation's US$36.2 trillion debt.
'What the Senate did was unconscionable,' Norman, a South Carolina Republican, said on Tuesday. One of several fiscal hawks who spoke out against the Senate Bill's higher price tag, he accused the Senate of handing out 'goodie bags' of spending to satisfy holdouts.
Trump for weeks has pushed for passage ahead of Friday's Independence Day holiday and kept up the pressure on Wednesday.
'Republicans, don't let the Radical Left Democrats push you around. We've got all the cards, and we are going to use them,' Trump said in a social media post.
Democrats are united in opposition to the Bill, saying that its tax breaks disproportionately benefit the wealthy while cutting services that lower and middle-income Americans rely on. The nonpartisan Congressional Budget Office estimated that almost 12 million people could lose health insurance as a result of the Bill.
'This is the largest assault on American healthcare in history,' Democratic House Minority Leader Hakeem Jeffries told reporters on Tuesday, pledging that his party will use 'all procedural and legislative options' to try to stop – or delay – passage.
The version of the Bill passed by the Senate on Tuesday would add more to the debt than the version first passed by the House in May. The CBO on Tuesday raised its estimate for how much the Senate Bill would increase the budget deficit through 2045 by US$100 billion, to US$3.4 trillion.
The Bill includes more than US$900 million in cuts to the Medicaid programme for low-income Americans.
Those cuts also raised concerns among some House Republicans.
'I will not support a final Bill that eliminates vital funding our hospitals rely on,' Republican Representative David Valadao of California said before Senate passage.
Timing difficulties
But some House Republicans worried about social safety-net cuts could find solace in the Senate's last-minute decision to set aside more money for rural hospitals, funding Representative Nick Langworthy, a New York Republican, called 'a lifeline that will be very helpful to districts like mine'.
Any changes made by the House would require another Senate vote, making it all but impossible to meet the Jul 4 deadline.
Any Republican public opposition to the Bill risks irking Trump, as was the case when the president slammed Senator Thom Tillis, a North Carolina Republican who announced his retirement after coming out in opposition to the Bill.
Another former Trump ally, the world's richest person Elon Musk, this week resumed an active campaign against the Bill over social media, blasting its deficit-building effects. That has reignited a feud between Trump and Musk. REUTERS