WASHINGTON (AP) — House Republicans are preparing to push their hard-fought package of tax breaks and spending cuts through its next hurdle Friday in the Budget Committee, but conservatives are warning they could vote to halt it unless there are further changes.
Tallying a whopping 1,116 pages, the One Big Beautiful Bill Act, named with a nod to President Donald Trump, is teetering at a critical moment. Conservatives are holding out for steeper cuts to Medicaid and other programs to help offset the costs of the tax breaks. But at the same time, lawmakers from high-tax states including New York are demanding a deeper tax deduction, known as SALT, for their constituents.
Failure to push the package out of the Budget Committee would be a setback for Speaker Mike Johnson, who insists Republicans are on track to pass the bill, which he believes will inject a dose of stability into a wavering economy.
“One of the reasons the big beautiful bill is so important is because I am convinced it will send a message of stability to the stock market, the bond markets, to job creators and entrepreneurs, the risk takers, the people who make the economy go,” Johnson said. “We will get the U.S. economy going again.”
The Budget panel is one of the final stops before the package is sent to the full House floor for a vote, which is expected as soon as next week. Typically, the job of the Budget Committee is more administrative as it compiles the work of 11 committees that drew up various parts of the big bill.
But Friday’s meeting could prove momentous. Republicans hold a slim majority in the House and have just a few votes to spare, including on the Budget Committee.
The conservative holdouts from the Freedom Caucus are insisting on deeper cuts — particularly to Medicaid. They want new work requirements for aid recipients to start immediately, rather than on Jan. 1, 2029, as the package proposes.
Rep. Ralph Norman, R-S.C., who is a member of the Budget panel, was among those who spoke up during a private meeting of House Republicans as they assessed the situation.
He said the Republicans have “one shot” to get the package right and make sure it doesn’t pile onto deficits. If the vote fails in the Budget Committee on Friday, he suggested they “go back to work.”
At the same time, the New Yorkers have been unrelenting in their demand for a much larger SALT deduction than what is proposed in the bill, which could send the overall cost of the package skyrocketing.
As it stands, the bill proposes tripling what’s currently a $10,000 cap on the state and local tax deduction, increasing it to $30,000 for joint filers with incomes up to $400,000 a year.
Rep. Nick LaLota, one of the New York lawmakers leading the SALT effort, said they have proposed a deduction of $62,000 for single filers and $124,000 for joint filers.
The conservatives and the New Yorkers are at odds, each jockeying for their priorities as Johnson labors to keep the package on track to pass the House by Memorial Day and then onto the Senate.
“This is always what happens when you have a big bill like this,” said Majority Leader Steve Scalise, R-La. “There’s always final details to work out all the way up until the last minute. So we’re going to keep working. There’s a lot of work to be done.”
At its core, the sprawling package is a somewhat modest proposal to extend the existing income tax cuts that were approved during Trump’s first term, in 2017, and add new ones that the president campaigned on in 2024, including no taxes on tips, overtime pay and some auto loans.
It increases some tax breaks for middle-income earners, including a bolstered standard deduction of $32,000 for joint filers and a temporary $500 boost to the child tax credit, bringing it to $2,500.
It also provides an infusion of $350 billion for Trump’s deportation agenda and to bolster funds at the Pentagon.
To offset some $5 million in lost revenue, the package proposes rolling back other tax breaks, namely the green energy tax credits approved as part of President Joe Biden’s Inflation Reduction Act. Some conservatives want those to end immediately.
The package also seeks to cover the costs by slashing more than $1 trillion from health care and food assistance programs, largely by imposing work requirements on able-bodied adults.
Certain Medicaid recipients would need to engage in 80 hours a month of work or other community options to receive health care. Some parents and older Americans receiving food aid through the Supplemental Nutrition Assistance Program, known as SNAP, would also see new work requirements, including for those up to age 64 and some parents with children older than 7.
The nonpartisan Congressional Budget Office estimates at least 7.6 million fewer people with health insurance and about 3 million a month fewer SNAP recipients with the changes.
The package also includes a $4 trillion increase in the nation’s debt limit, now $36 trillion, so the Treasury can continue to pay the bills and prevent a federal debt default.
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Associated Press writer Leah Askarinam contributed to this report.
