House Republicans are barreling into a crucial week in their effort to pass President Trump’s legislative agenda, with key policy hang-ups threatening to upend leadership’s timeline for approving the sprawling package.
Those disagreements have already prompted delays as lawmakers haggle over how to address contentious issues while meeting deficit reduction targets.
The Energy and Commerce Committee, which oversees areas including Medicaid and green tax credits, postponed a markup on its portion of the Trump agenda bill as lawmakers remain at odds over how to handle potential cuts to the social safety net program. Hard-line conservatives are calling for steep slashes that moderates have drawn red lines around, all as Trump insists that Republicans not cut Medicaid benefits provided to low-income individuals.
Meanwhile, the House Ways and Means Committee, which has the arduous task of crafting the massive tax portion of the bill, had aimed to mark up this week, but that plan is on thin ice as the panel struggles to work through a series of hot-button issues.
The top point of discontent revolves around how to address the state and local tax (SALT) deduction cap, with Republicans in high-tax blue states pushing for a sizable increase and deficit hawks pumping the brakes. The conference is also in conflict over the green energy tax credits that were passed as part of sweeping Democratic legislation during the Biden administration, which conservatives pan but moderates say benefit their districts.
The lingering disagreements are putting Speaker Mike Johnson’s (R-La.) roadmap in jeopardy. The top lawmaker said he wants the remaining markups to take place this week so that the House Budget Committee can combine all parts of the package the week after, putting the legislation on track for final passage — along party lines in a razor-thin GOP majority — by Memorial Day.
That plan, however, could go awry if members are unable to work through the lingering disagreements, putting pressure on leadership to find consensus and move the process along.
“I think it’s tight,” Rep. Nicole Malliotakis (R-N.Y.), a key proponent of increasing the SALT deduction cap, said Thursday when asked if the Ways and Means Committee will be able to hold its markup this week.
“I’m hopeful,” she added. “But anything can happen.”
Members left Washington last week without an agreement on the deduction cap, which is currently set at $10,000 for both single and married filers. Malliotakis previously said that raising the cap to $25,000 “is not going to cut it.”
Other proposals being discussed, according to a source, include raising the deduction cap to $60,000 for single filers and $120,000 for married filers — levels proposed by Rep. Nick LaLota (R-N.Y.) — or even up to $100,000 for single filers and $200,000 for married filers, as proposed by Rep. Mike Lawler (R-N.Y.). The expectation, though, is that the actual compromise will be lower.
The trouble with raising the SALT cap — which gets expensive quickly — is the budgetary impact it will have on the full bill. In addition to raising the SALT cap, Republicans are also trying to meet Trump’s calls to permanently extend the tax cuts he signed into law in 2017; eliminate taxes on tips and overtime; and other priorities — an expensive wish list.
The rising price tag could set off alarm bells for fiscal hawks, who are adamant about the final package being deficit neutral. That position was reflected in the budget resolution, which directs the House to find $1.5 trillion in deficit reductions over a decade.
Asked if that $1.5 trillion target is too ambitious, Rep. Jeff Van Drew (R-N.J.) paused: “I’m going to be very careful. It could be. It may be.”
“We spend too much. We borrow too much. It is not going to get fixed in one year,” Van Drew said. “I’m tired of people saying sometimes — because I do speak directly with the president — and they say, ‘The president’s agenda.’ And yet, when you speak with the president, he doesn’t want to cut Medicare, Medicaid or Social Security. … He doesn’t want to hurt people.”
Medicare and Social Security are not on the table in the bill, and Trump insisted after a White House meeting with Johnson, House Majority Leader Steve Scalise (R-La.), Energy and Commerce Committee Chair Brett Guthrie (R-Ky.), and Ways and Means Committee Chair Jason Smith (R-Mo.) that Republicans would be “saving Medicaid for Americans in need.”
“We will not let the Democrats destroy it and all the waste, fraud and abuse they seem to love and they will decimate Medicaid if they get the chance, we’re not going to give them the chance,” Trump said.
But members say in order to meet the Energy and Commerce Committee’s $880 billion deficit reduction target, the bill must go further than combating “fraud” and enacting proposals like work requirements for “able-bodied” adults — and conservatives say that more extensive changes are needed.
“[Trump has] said he doesn’t want any benefits reductions in Medicaid. I get it. But by the same token, you’re going to have to make some adjustments over time,” Rep. Andy Biggs (R-Ariz.) said.
Rep. Chip Roy (R-Texas) led 19 other conservative members in a letter on Thursday calling for “structural reforms” to Medicaid, such as eliminating the enhanced federal matching funds for states that expanded the program under the Affordable Care Act. Republicans have also been discussing a per-beneficiary cap on federal Medicaid spending, which would also shift the cost to states.
Opponents argue that change would lead to states reducing benefits to make up for the lost federal revenue, but conservatives insist it does not technically cut benefits.
“That’s not a reflection of reducing benefits. That’s the states having to decide how they’re going to respond to it,” Biggs said. “Many states have said, ‘Look, if the feds don’t match up, then we’re going to find some other way.’”
Green energy tax credits that were passed as part of Democrats’ Inflation Reduction Act in 2022 are also emerging as a pain point in the legislation.
Conservatives have dubbed the credits a part of the “green new deal,” and argue that repealing them is a way to get major savings to help pay for other priorities in the bill. But some members have long called for a “targeted” approach to repealing the credits that benefit their districts.
That simmering dispute is coming to a head. Rep. Josh Brecheen (R-Okla.) led a group of 38 conservatives on Thursday in calling for a “full repeal” of the Inflation Reduction Act’s green energy tax credits, while taking a swipe at the moderates.
“We are deeply concerned that President Trump’s commitment to restoring American energy dominance and end what he calls the ‘green new scam’ is being undermined by parochial interests and short-sighted political calculations,” the conservatives said in the letter.
On the other side of the issue, Rep. Dan Newhouse (R-Wash.) led a letter of 26 Republicans asking leaders to keep incentives to support nuclear power plants, saying in a letter first reported by Politico Pro that maintaining those investments in nuclear reactors is “vital to unleashing American energy dominance and lowering costs for families and businesses alike.”
As the disputes drag on with time running out on the clock, key lawmakers are urging calm, arguing that the pieces of the puzzle will come together in due time.
“Reconciliation is being negotiated as we speak,” Lawler told reporters on Thursday. “Everything is being negotiated, it’s being worked on, and I suspect we’ll have progress in short order.”
