On Thursday morning, House Republicans approved President Donald Trump’s tax and immigration bill, sending it to the Senate, which Republicans hope will transform the federal government and economy and advance the White House’s efforts to deport immigrants and build up the military.
Trump’s One Big Beautiful Act, as the measure is officially called, extends trillions of dollars in tax cuts since his first term in office, along with other campaign promises, including eliminating taxes on tips and overtime, and hundreds of billions of dollars in new spending.
However, the legislation, which passed 215-214-1 after lengthy negotiations, is very expensive. The latest estimates from the Congressional Budget Office, the nonpartisan accountant for lawmakers, show it would add $2.4 trillion to the national debt over 10 years, already above $36 trillion.
To make up for the cost, the measure would reduce spending on social welfare programs by more than $1 trillion over 10 years. Even then, the massive legislation would require nearly $500 billion in cuts to Medicare over the next decade to bring the national deficit within legal limits, unless Congress adjusts the limits later. The bill could leave 8.7 million people without Medicaid coverage and 7.6 million more without health insurance over a decade, the CBO estimates.
The final vote came just before 7 a.m. Thursday, capping a more than 24-hour session that began in committee at 1 a.m. Wednesday. House Republicans are determined to pass the bill by July, with lawmakers pushing through into the wee hours of the night, bringing food, coffee and other energy drinks to keep bleary-eyed lawmakers awake.
Both House lawmakers expect the measure to pass with major amendments in the Senate, where similar tensions could force major policy changes that could reignite ideological conflicts among Republican lawmakers.
The House bill, however, was the brainchild of Trump, and several of its proposals came directly from the presidential campaign. Trump, then a candidate, said no tip tax on servers, and no overtime tax would follow soon after the campaign speech. Another campaign promise, to repeal the Social Security tax, failed to pass. Republican lawmakers then replaced the bill with a $4,000 bonus on the standard senior tax deduction.
And when the legislation repeatedly appeared to fail due to divisions within the Republican Party, Trump stepped in to step in. In January, he spoke at a House Republican policy meeting held at his luxury golf resort in South Florida, where lawmakers presented early drafts of the legislation. Trump twice intervened with opponents of the bill as the House debated the measure’s budget, and each time, House Speaker Mike Johnson intervened. (Louisiana) called dissidents into a private room next to the House floor to broadcast the president over a loudspeaker.
On Wednesday, the White House warned that it would be “the ultimate betrayal” if Republicans refused to accept his bill. The House Republican feud engulfed the House in nearly 24 hours of debate. That afternoon, Trump summoned a group of hardline budget opponents to the White House to order them to follow suit. Hours later, the dissidents changed their minds.
“He’s a master at it. He’s a deal maker,” said Rep. Eric Burlison (R-Missouri), one of the top fiscal policy advocates. “It’s amazing to see him in action.”
Republicans insist that the U.S. economy is counting on tax breaks to boost growth that has been piling on for years.
House Republican Party leader Steve Scalise (R-Louisiana) told a group of conservative activists Tuesday that “with this bill, your life is going to be a lot better because you’re going to have more money in your pocket. The small businesses you work for or the big businesses are going to invest more money in the economy so that you can get higher-paying jobs, so that you can create more jobs so that they can hire more people.”
Economists say much of the current market uncertainty is due to Trump’s tariffs, which have disrupted supply chains and threatened a new round of consumer inflation.
The financial impact of the bill has also spooked investors. As lawmakers eyed a deal on Wednesday and avoided further spending cuts, bond yields rose slightly, a sign that investors are increasingly concerned about the nation’s financial health.
“This bill is a debt bomb that’s going to explode,” Rep. Thomas Massie, Republican of Kentucky, said Thursday morning on the House floor. “Congress can come up with ridiculous or fanciful numbers if they want to, but bond investors won’t.”
Republicans are trying to get the bill through a process called the budget amendment process, which would allow the party to bypass Senate Democrats’ debate. But the move comes with complicated rules that could threaten the bill’s path to becoming law.
Trump traveled to the Capitol on Tuesday to meet with conservatives, and lawmakers expressed confidence in the bill’s passage.
At the convention, the president blasted blue-state Republicans for trying to raise the cap on state and local tax deductions (SALT) and hard-line Republicans for “not messing with Medicaid.” Lawmakers said a consensus was near.
But lawmakers tried to make their own comments about Trump’s remarks. For some, the president’s comments on SALT meant refusing to raise tax deductions, and for others, he meant bowing to the demands of moderates.
For one group, his comments on Medicaid meant finding only serious violations, while another group thought they meant finding “defects” in the program’s DNA.
The dynamic pitted two ideologically different groups of Republicans against each other. Blue-state Republicans, the more moderate members of the convention, argue that they are being forced to accept cuts to federal welfare programs, including Medicaid and SNAP, the Supplemental Nutrition Assistance Program formerly known as food coupons.
The House Freedom Caucus, a group of hard-line conservatives, said the bill falls short of Trump and Republicans’ goal of cutting federal spending. Many complain that SALT rewards Democrat-majority states that charge higher tax rates.
“We’re stuck right now,” Rep. Nick Lalota (R-New York), a prominent SALT sponsor, said Tuesday after Trump visited the Capitol. “People are fighting about SALT, Medicaid, SNAP, and the deficit. I think if you can get a deal on SALT, you can get it going, and you’re going to get the SNAP people involved, you’re going to get the Medicaid people involved, and eventually they’re going to have to figure out a way with the deficit hawks.”
That’s what Johnson did. Later that night, he struck a deal with blue-chip Republicans that would increase the cap on state and local taxes that taxpayers can deduct from their federal tax bills. Trump’s 2017 Tax Cuts and Jobs Act capped the deduction at $10,000. The deal with Johnson would raise the cap to $40,000 starting in 2025 for taxpayers making less than $500,000. The cap and income limits would then increase by 1 percent each year for the next 10 years.
Meanwhile, White House tax negotiators and the Freedom Caucus discussed new policies for cutting Medicaid spending, The Washington Post reported. But when those proposals weren’t in the bill, hardliners rebelled against Johnson and his self-imposed Memorial Day deadline to send the bill to the Senate.
“This is an absolutely ridiculous deadline that people here have set to force these people into a corner and make the wrong decision,” Rep. Scott Perry, Republican, R-Pennsylvania, said Wednesday morning. “It’s more important to get it right and get it done quickly.”
Later that afternoon, at the White House, Trump lobbied for support for the legislation by endorsing policies that the House majority leader already supported.
“When have I ever said no?” Rep. Clay Higgins, Republican, R-Louisiana, asked after returning from the White House. Earlier Wednesday, he had stood with his Freedom Caucus colleagues in opposition to a very similar piece of legislation that eventually passed. “We’ve been focused on reaching consensus, on solutions, and on the most conservative product. When have we ever wavered on this?”
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