We’ve seen this story before and know how it ends.
Can Anyone Sink the Tax Bill?
The Wall Street Journal says These GOP Lawmakers Could Sink Trump’s ‘Big Beautiful’ Tax Bill
Republicans pushed President Trump’s “big, beautiful” tax and spending package closer to the finish line with votes earlier this month approving a budget framework. But as lawmakers return to work this week, hard intraparty fights remain in writing and ironing out the multitrillion-dollar package.
Most GOP lawmakers are on board with the broader plan to extend expiring pieces of the 2017 tax law, introduce new tax breaks such as “no tax on tips,” boost border spending and cut other government outlays. Speaker Mike Johnson (R., La.) wants to get the bill finished by Memorial Day. Still, fights are smoldering over the details, and several small groups of lawmakers have painted certain issues as nonnegotiable.
Deficit hard-liners
A group of so-called budget hawks have hinged their support of the president’s reconciliation bill on the idea that the tax cuts must be paired with significant spending cuts. These Republicans are willing to allow some deficit increases because they assume that economic growth will cover some of the costs. But they’ve indicated that—even though they’ve moved the process along so far—they aren’t automatic yes votes.
While government funding and federal spending battles often center around the pushback of members of the ultraconservative House Freedom Caucus like Reps. Chip Roy (R., Texas) and Andrew Clyde (R., Ga.), others are raising concerns as well. Rank-and-file Republicans like Reps. David Schweikert (R., Ariz.) and Lloyd Smucker (R., Pa.), a Budget Committee member, are among those also warning about a bill that would expand deficits too much.
It’s a tough balance to strike. The House’s budget calls for at least $1.5 trillion in spending cuts over a decade, with a goal of at least $2 trillion. The budget hawks say they’re going to insist that the final bill hits those targets. Cuts that deep could clash with the desires of others in the party who would be comfortable with smaller reductions. So far, Johnson has privately told GOP holdouts that he plans to stick to the House budget instructions that require a minimum of $1.5 trillion.
Medicaid Defenders
One area likely to be targeted in the pursuit of steep spending cuts is Medicaid, a health insurance program that covers more than 70 million people who are low-income and is a big part of state budgets and the healthcare economy. There is a bloc of Republicans warning that deep reductions in coverage will hurt constituents and make GOP efforts to keep the House majority more difficult in 2026.
Such members include Reps. David Valadao (R., Calif.) and Rob Bresnahan (R., Pa.), who are both in battleground district seats. And in the Senate, Sens. Susan Collins (R., Maine), Lisa Murkowski (R., Alaska) and Josh Hawley (R., Mo.) have opposed deep cuts.
“The reality is Medicaid plays a huge role in my district,” said Valadao, whose constituency has among the highest levels of Medicaid recipients in the nation. Biden won the district by 13 points in 2020, while Trump won it by 5 points in 2024. Making sure that Medicaid “is sustainable and it is around to protect the most vulnerable is something that is first and foremost in my thought process” heading into a vote, he said.
SALT Caucus
A group of Republican lawmakers are vowing that their support for the Trump tax bill depends on raising the cap on state and local tax deductions, which was limited to $10,000 in 2017 as part of Trump’s tax law.
Most of these lawmakers hail from states that have higher costs of living and property taxes, like New York, New Jersey and California. Reps. Nick LaLota, Mike Lawler and Andrew Garbarino of New York, and New Jersey’s Jeff Van Drew and Tom Kean Jr. are among those pushing strongly to address the issue, with some threatening to withhold their support from the GOP package if the cap isn’t raised.
Some Republicans are suggesting the cap could be raised to $30,000 or more, but higher caps reduce revenue that could be used elsewhere.
Inflation Reduction Act protectors
Republicans whose states and districts received billions in funding that went towards clean energy projects through the Biden administration’s Inflation Reduction Act are also warning party leaders against clawing back this funding and limiting tax credits that provide incentives. Such a clawback could be used to help offset the cost of other tax cuts, and Trump has repeatedly vowed to repeal the law.
Recently, Murkowski and Sens. Thom Tillis (R., N.C.), John Curtis (R., Utah), and Jerry Moran (R., Kan.) sent a letter to Senate Majority Leader John Thune (R., S.D.) detailing the fallout if the buzzsaw comes for the Inflation Reduction Act-related investments.
“While we support fiscal responsibility and prudent efforts to streamline the tax code, we caution against the full-scale repeal of current credits, which could lead to significant disruptions for the American people and weaken our position as a global energy leader,” they wrote.
These senators joined nearly two dozen House Republicans who have argued in favor of preserving some of the Biden-era green energy tax credits. Those members include Garbarino as well as centrists like Reps. Don Bacon (R., Neb.), Jen Kiggans (R., Va.) and Mariannette Miller-Meeks (R., Iowa).
The Winners
- Medicaid Defenders
- SALT Caucus
- Inflation Reduction Act protectors
- The Industrial-Military Complex
The more the alleged deficit hard liners try to hold out, the uglier this is likely to get because Trump and Speaker Mike Johnson will buy as many Democrats as necessary to get this over the hump.
Democrats more than Republicans want SALT restored. Both are hypocrites.
SALT primarily benefits the wealthy who itemize deductions. Democrats who favor higher taxes on the wealthy should be against this but won’t be.
Republicans who across the board should want a simpler tax code want to restore this deduction and add more.
The Hard Liners
Some of the alleged hard liners will make up fantasy numbers about how much growth the bill bring.
Other deficit hard liners will meekly stand aside, agree to more of that in return for more military spending, or eventually cave with threat of being primaried.
I expect there will be a few to the bitter end who will prove to be what they say they are, perhaps just one.
How Compromise Works
Congressional compromise is always more of this and more of that.
It’s never less of anything.
Budget Deficit Will Balloon
The budget deficit is guaranteed to balloon.
Trump will cheer. The cult will cheer. If you are a hypocrite in either party you will cheer.
Expect a lot of cheering with the hypocrite deficit hawks at the Wall Street Journal and in Congress leading the way.
This is going to be big, and very ugly.