Republicans reject Trump’s tax bill after the president calls for unity
Trump’s sweeping tax bill failed to clear key hurdles as Hardline Republicans wanted to cut programs like Medicaid deeper.
WASHINGTON – President Donald Trump’s sweeping tax bill has stagnated for several days due to Republican inscribed over spending cuts, earning Congressional Committee approval on May 18th and moving forward for a potential passing in the House later this week.
It was a big win for Trump and House Speaker Mike Johnson after Hardline Republican conservatives blocked the House Budget Committee on May 16 over the dispute over the cuts to the Medicaid health program for low-income Americans and the elimination of the Green Energy Tax Credit.
Four Hardline members of the committee’s 21 Republicans allowed the law to move forward by voting “now” in a rare session on May 18th. The bill was passed 17-16 votes, with all Democrats voting against it.
The hardlines spent most of the day negotiating closures with House Republican leaders and White House officials.
“The deliberations continue at this moment. They will continue until that week, and I think I’ll doubt until the time we put this big and beautiful bill in front of our house.”
Non-partisan analysts say the bill would add between $3 and $5 trillion to the country’s $36.2 trillion debt over the next decade if it extended the 2017 tax cuts, a legislative victory for Trump’s first signing period. Moody’s cited the increase in debt, which he said on May 16, was on track to reach 134% of GDP by 2035 due to the decision to downgrade the US credit rating.
Treasury Secretary Scott Bescent dismissed the importance of the cut in a May 18 television interview, saying the bill would promote economic growth that outweighs what the country is paying for.
“I don’t give Moody’s much credit,” Bescent told CNN’s “The State of the Union” program, reflecting criticism from the White House.
Meanwhile, economic experts warn that downgrades from the last of the three major credit institutions are a clear indication that the US should have too much debt and that lawmakers should increase their income or encourage less spending.
Congressional Republicans in 2017 claimed that tax cuts would pay themselves by stimulating economic growth. However, the Nonpartisan Congressional Budget Office estimates that the change has increased the federal deficit to just under $1.9 trillion over a decade, even with positive economic impacts.
House Speaker Mike Johnson on May 18 said the chamber is still “on orbit” and the House Budget Committee is expected to vote at the 10pm hearing.
“We had a lot of conversations, there’s a lot more today,” Johnson said on “Fox News Sunday and Shannon Bream,” when asked about Hardline Republicans, including Texas’ Chip Roy and South Carolina’s representative Ralph Norman.
Medicaid cut his eyes
Trump Republicans have a majority of 220-213 in the House, splitting about how much they will cut their spending to offset the costs of tax cuts.
Hardlines want to cut Medicaid’s health insurance program. This calls for moderates and some Republican senators to counterattack and hurt voters who elected Trump in November, requiring support that Congressional control needs to be gained again in 2026.
The bill’s cuts would drive 8.6 million people out of Medicaid, a joint federal state program for low-income Americans. It also aims to eliminate overtime income taxes both from tips and Trump’s campaign promises, but at the same time increases defense spending and provides more funding for Trump’s border crackdown.
Republicans are also in conflict with state taxes, or salt deductions, which are very important to a small number of incumbents from states such as New York and California, which are important to the party’s narrow House majority.
The downgrade of Moody’s could be further rattling investors when Wall Street reopens on May 19, coming amid continuing economic uncertainty over Trump’s tariffs, which already expands global markets.
Trump and his administration have vowed to balance the budget since the Republican president re-inaugurated in January.
But his attempts to reduce government spending through the efficiency of the government’s government are far below that goal. It also remains unclear what revenues will be raised through tariffs as Trump swings between charging higher fees and cutting transactions.
Johnson said the downgrade indicated the need for a tax bill.
“The Moody’s aren’t wrong,” Johnson said. “We’re talking about historic spending cuts, which means this will help change the trajectory of the US economy.”
He aims to see the bill pass the house this week ahead of the May 26th anniversary holiday. Lawmakers face far more tight deadlines later this summer when they need to address US debt caps or cause potentially catastrophic defaults.
Connecticut Democratic Sen. Chris Murphy said the credit rating cuts spelled out the troubles of Americans.
“That’s a big deal. It means we’re likely heading into a recession,” Murphy told NBC’s “Meet the Press.”
“That probably means higher interest rates for people trying to start a business or buy a home. These people are running the economy recklessly.”
(Additional reporting by Katherine Jackson, David Morgan and David Barbascia, edited by Scott Malone, Bill Velcrott and Stephen Coates)
