House GOP Divided Over Trump Tax Cuts, Budget/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ House Republicans are advancing legislation to extend Trump-era tax cuts but remain divided over spending reductions to offset the costs. Deficit hawks are demanding $2 trillion in cuts, sparking internal clashes and raising concerns about potential Medicaid reductions. The move comes amid a stock market selloff and growing fears of economic instability.
GOP Faces Internal Split Over Trump Tax Cuts: Quick Looks
- House Republicans aim to advance Trump’s 2017 tax cuts this week.
- Internal divide over $5.7 trillion in projected deficit increases.
- Deficit hawks want $2 trillion in spending cuts to offset costs.
- Senate plan passed with minimal cuts, angering House conservatives.
- Medicaid and food assistance programs face potential reductions.
- Trump promises Medicaid will not be slashed, creating a policy rift.
- Stock market turmoil adds urgency and complexity to budget talks.
- Senate measure includes $5 trillion debt ceiling hike, $1T more than House version.
- Speaker Mike Johnson pushes for deep cuts while protecting key programs.
- CRFB criticizes “gimmick” budget math used by Senate Republicans.
House GOP Divided Over Trump Tax Cuts, Budget
Deep Look
House Republicans Clash Over Trump Tax Cuts, Spending Cuts, and Economic Risks
Republican lawmakers in the U.S. House of Representatives are moving to extend former President Donald Trump’s 2017 tax cuts this week, but sharp internal divisions over how to pay for the plan threaten to derail progress. While the party is largely unified in supporting Trump’s economic agenda, deficit hawks are pushing back against a Senate-approved budget resolution that lacks significant spending cuts.
The tension comes as nonpartisan budget experts project that the tax extension and related policy items could add $5.7 trillion to the national debt over the next 10 years.
House conservatives are calling for approximately $2 trillion in cuts to federal spending over that time, which they argue is the only fiscally responsible way to enact Trump’s America First economic policies.
Stock Market Selloff Complicates Budget Debate
The debate comes during a period of heightened market volatility following President Trump’s announcement of sweeping new tariffs on foreign imports. The move has triggered sharp selloffs on Wall Street, further complicating the already tense budget negotiations. Economists now warn of the increased risk of a recession, which could undercut the economic case for deficit-financed tax cuts.
The House plans to vote this week on advancing the tax package through the budget reconciliation process, which allows legislation to bypass the 60-vote threshold in the Senate and pass with a simple majority. However, in order to succeed, House and Senate Republicans must reconcile key differences between their versions of the budget resolution.
Budget Showdown: House vs. Senate
The Senate passed its version of the budget resolution by a narrow 51-48 margin over the weekend. House Republicans are demanding deeper spending reductions than the Senate’s framework, which the Committee for a Responsible Federal Budget (CRFB) criticized as only cutting 0.2% as much spending as the House’s earlier budget plan passed in February.
House Budget Committee Chair Rep. Jodey Arrington (R-TX) called the Senate’s proposal “unserious and disappointing.” Other conservatives, including Rep. Andy Harris (R-MD), echoed that sentiment, stating that he would not support the Senate’s plan until real spending and deficit reduction plans were presented.
Medicaid in the Crosshairs
The most contentious issue in the spending debate is the future of Medicaid. Public health advocates and Democratic lawmakers argue that achieving $2 trillion in cuts would be impossible without slashing programs like Medicaid and food assistance, which help low-income Americans, seniors, and individuals with disabilities.
House Republicans have suggested overhauling these programs, but the proposal faces intense backlash. House Minority Leader Hakeem Jeffries warned that the cuts would have devastating consequences.
“Children will be devastated. Women will be devastated. Older Americans will be devastated,” he said. “Hospitals and community health clinics are going to close.”
Adding to the complexity, Senator Josh Hawley (R-MO) revealed that Trump gave him an “unequivocal” commitment that Medicaid benefits would not be cut. That promise directly conflicts with some House Republicans’ strategy for reaching their $2 trillion in savings.
Debt Ceiling Dispute
Another sticking point is the size of the proposed debt ceiling increase. The Senate resolution includes a $5 trillion debt limit hike — $1 trillion more than the House version. Lawmakers must address the debt ceiling this summer or risk defaulting on the nation’s $36.6 trillion in obligations.
Speaker Mike Johnson and other House GOP leaders are urging passage of a final bill, but only if it includes “historic spending reductions while protecting essential programs,” according to a letter sent to colleagues.
Budget Math Under Fire
The CRFB also criticized a budget accounting tactic used by Senate Republicans. By treating the continuation of Trump’s 2017 tax cuts as a baseline rather than new spending, the Senate’s plan underestimates the real cost of the proposal. Analysts at CRFB labeled the tactic a “fiscal gimmick” that hides trillions in projected deficit increases.
Senator Bill Cassidy (R-LA) warned in a floor speech that using such accounting could create long-term fiscal problems. “It’s never been done before in a setting like this,” Cassidy said. “I think it establishes a dangerous precedent.” Despite his concerns, he voted to advance the budget due to broader economic uncertainty.
What’s Next?
A House vote is expected this week, but significant changes to the Senate’s framework may be required to secure enough support. With Trump pushing hard to deliver on his economic platform ahead of the election, and markets reacting to every development, the next few days could shape the future of U.S. fiscal policy for years to come.
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