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(WASHINGTON) — House Republicans will plow ahead Tuesday to advance key components of their bill to fund President Donald Trump’s agenda — including taxes and Medicaid cuts — even as they remain at odds over several critical issues.
The House Energy and Commerce Committee, which has jurisdiction over energy and health care programs, and the House Ways and Means Committee, which has jurisdiction over taxes, will both hold marathon markups in hopes of moving the legislation to the floor.
The movement on the critical pieces of the “big, beautiful bill” comes as Speaker Mike Johnson faces resistance from different wings of his caucus with only three votes to spare in his razor thin majority.
Texas Republican Rep. Chip Roy said Monday he’s opposed to the proposals and needs “significant” changes to support the final package.
“I remain open-minded because progress has been made based on our forceful efforts to force change. But we cannot continue down the path we’ve been going down – and we will need SIGNIFICANT additional changes to garner my support,” he said in a post on X.
Trump repeatedly promised on the campaign trail and in the White House to not cut Medicaid and he and Republicans said they’ll come up with savings by cutting waste and fraud in the program.
Before heading off on a four-day trip to the Middle East on Monday, he urged Republicans to “UNIFY” around the bill and said the executive order he signed Monday that would “slash the cost of prescription drugs” and the “hundreds of billions of tariff money coming in” should be factored into the bill’s scoring.
With Republicans in control of both chambers of Congress, they are using a process called reconciliation that only requires a simple majority for passage to fast-track their legislation.
Republicans unveiled legislative text over the weekend that outlined their plans to slash Medicaid spending by imposing work requirements for recipients, make more frequent eligibility checks, and penalize states like New York and California that offer Medicaid to illegal immigrants.
The Congressional Budget Office wrote in a letter to Energy and Commerce Chairman Brett Guthrie that the proposal met its lofty target for $880 billion of savings over the next decade.
The Energy and Commerce committee resisted pressure from hardliners like Roy who demanded GOP leaders propose lowering the percentage the federal government pays to states’ Medicaid programs or include per-capita caps on federal Medicaid payments to states.
The health portions would save about $715 billion, according to CBO. However, at least 8.6 million more Americans will go uninsured.
Some culture war issues were addressed in the bill, including a provision to strip Medicaid funding from organizations that offer abortion services such as Planned Parenthood.
The legislation has already received pushback from Republicans in the Senate who will have to go along with it, including Missouri Sen. Josh Hawley, who wrote an opinion piece in the New York Times Monday warning against moves to cut Medicaid.
“This wing of the party wants Republicans to build our big, beautiful bill around slashing health insurance for the working poor. But that argument is both morally wrong and politically suicidal,” Sen. Hawley wrote.
Meanwhile, the Ways and Means Committee, which is marking up the tax portion of the bill, outlined a permanent extension of Trump’s 2017 Tax Cuts and Job Act, as well as making good on his campaign promises like no tax on tips and no tax on overtime.
The plan would temporarily increase the child tax credit, create a MAGA savings account for children and temporarily increase the standard tax deduction. It also calls for a $4 trillion increase to the debt ceiling, which Congress must address by mid-July to avoid default.
The legislation also includes one of the most controversial components — a tax proposal that would hike the cap on state and local tax deductions (SALT) from $10,000 to $30,000 for those earning less than $400,000, which some moderate Republicans from states with higher taxes say is not enough.
New York Rep. Nick LaLota said he is “still a hell no” in a post on X.
Rep. Mike Lawler of New York told Bloomberg TV the proposal was “woefully inadequate,” adding that he will vote against the bill if it comes to the floor.
“We will continue to work in good faith with leadership, with the administration to get this done, but we need to have an honest and serious discussion about the issue,” he added.
Here’s what’s in the bill:
Medicaid cuts
Medicaid work requirements: The bill would impose work requirements on able-bodied Medicaid recipients — at least 80 hours per month — or require enrolling in an educational program for at least 80 hours or some combination per month.
More frequent eligibility checks: The legislation would require states to conduct more frequent eligibility determinations — from every 12 months to every six months.
Prohibits Medicaid funds for gender transition for minors: The measure would ban federal Medicaid funds from going to gender-affirming care for transgender minors.
Blocks Medicaid funding for non-citizens: Federal funding would be blocked from going to states that provide health care coverage under Medicare for migrants in the country without authorization.
Targets Medicaid funding for organizations that provide abortions: The measure includes language that would essentially prohibit health care providers who offer abortion services from receiving Medicaid funds.
Drug pricing: The bill makes a change to the Inflation Reduction Act and allows drugs to be exempt from Medicare’s drug price negotiation if they are approved to treat multiple diseases.
Cuts energy programs in Inflation Reduction Act: The proposal would cut Inflation Reduction Act programs like spending on electric vehicles, claw back climate-related federal funding and phase out clean energy credits.
Tax provisions
No tax on tips: A huge tax break for the service industry and a provision that was also trumpeted by Kamala Harris as the Democratic nominee for president, though she tied the tax break to an increase for the federal minimum wage. This is temporary and would expire at the end of 2028.
No tax on overtime: Would relieve millions of Americans who work overtime. This is temporary and would also expire at the end of 2028.
Extension of 2017 Tax Cuts and Job Act: Makes tax from the 2017 Tax Cuts and Jobs Act permanent; does not include a tax increase on the wealthiest earners. Trump posted last week that the proposal shouldn’t raise taxes on high-earners, “but I’m OK if they do!!!”
Creation of MAGA savings account for children: The contribution limit for any taxable year is $5,000. It includes a pilot program to start the accounts with $1,000.
SALT: Lifts state and local tax deduction cap to $30,000 with an income phase-down above $400,000. Married couples filing taxes separately are subject to a $15,000 cap and phase-down above $200,000 income.
Debt limit increase: The measure calls for increasing the debt limit by $4 trillion. Treasury Secretary Scott Bessent said last week lawmakers must address the debt limit by mid-July to avoid a default.
Enhanced tax deduction for seniors: Seniors would get a $4,000 higher standard tax deduction subject to income limits. This is temporary and would also expire at the end of 2028.
Hikes excise tax on colleges: Those with endowments over $2 million per student would increase from 1.4% to 21%, targeting Ivy League schools. Religious schools would be exempt.
Child tax credit: A temporary increase from $1,000 to $2,500 through 2028 and to $2,000 after that. Recipients will be required to have a Social Security number.
Deduction for qualified business: The bill would increase the deduction for qualified business income from 20% to 22%.
Extends increased estate and gift tax exemption: Would increase the estate and gift tax exemption to $15 million.
Elevates standard tax deduction: The measure includes some new tax cuts like temporarily elevating the standard deduction by $2,000 to $32,000 for 2025 for joint filers and by $1,000 to $16,000 through 2028.
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