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Trump's 'big, beautiful' tax bill: Four sticking points for Republican rebels Trump's 'big, beautiful' tax bill: Four sticking points for Republicans
(1 day later)
Donald Trump's "big, beautiful bill" has so-far stalled on Capitol Hill.Donald Trump's "big, beautiful bill" has so-far stalled on Capitol Hill.
US President Donald Trump's sweeping tax and spending bill is one step closer to a full vote in the House of Representatives. US President Donald Trump's sweeping tax and spending bill is a key part of his legislative agenda - but for the moment it has stalled in Congress.
The 1,116-page bill - officially known as the One Big Beautiful Bill Act - was approved 17-16 by the budget committee on Sunday night. Republicans narrowly control both the House of Representatives and Senate, and it is discord among members of Trump's own party that has put his "big beautiful bill" in limbo.
On Tuesday, the president met with dissenting Republicans on Capitol Hill to persuade them to back it. Trump met with dissenting Republicans on Capitol Hill on Tuesday, and members of the hard-line House Freedom Caucus were reportedly set to visit the White House on Wednesday.
Reports after the closed-door meeting suggest he was unable to convince all the holdouts, with Trump saying after the meeting that an opponent of that kind "wouldn't be a Republican much longer", according to Reuters. Reports suggest, though, Trump has been unable to convince all the holdouts.
In Sunday's procedural vote, four Republican dissidents voted "present" rather than against the legislation, giving House Speaker Mike Johnson a rare win. He has said that if a Republican lawmaker opposed the bill, they "wouldn't be a Republican much longer".
It came after the bill was initially defeated on a first vote with Republican hold-outs voting "no" over concerns that its spending cuts were not deep enough to reduce the US national debt. The bill was narrowly approved by the House budget committee on Sunday night, giving House Speaker Mike Johnson a rare win. But it had failed on the committee's first vote, with Republican hold-outs concerned about spending and national debt.
The Senate must also pass the legislation and Republicans in that chamber are planning their own tweaks. The Senate must also pass the legislation and Republicans there are working on their own tweaks.
Let's take a look at where the disagreements lie. Let's take a look at where disagreements lie.
How much to cut?How much to cut?
Among the primary sticking points in the negotiations is just how much to slash from the bill. The bill combines an extension of tax cuts passed in 2017 with other tax measures and spending cuts.
As things stand, the measure's tax breaks total about $4.9tr (£3.7tn), partly paid for by cuts to the healthcare programme known as Medicaid, as well as to green energy tax breaks approved by former President Joe Biden. Trump and his congressional allies are trying to satisfy both budget hawks who want deeper spending cuts and Republicans who want tax reductions but worry about the effects of cutting some programmes.
Four right-wing lawmakers withheld their support, arguing that the cuts should be steeper to avoid swelling America's public debt, which currently stands at $36tr. A fifth lawmaker also voted no, citing procedural reasons. That has led to one of the biggest questions: How much spending to slash?
"The bill does not yet meet the moment," one of the rebels, Texas Republican Chip Roy, posted on social media late on Sunday. "We can and must do better before we pass the final product." The numbers can be daunting, especially for a party that has traditionally pushed to reduce the country's debt.
The nonpartisan Congressional Budget Office estimates that the bill would, over the next decade, add about $2.3 trillion (£1.7tn) to the national debt, which is currently around $36.2tn (£27tn).
Cutting government health care programmes and tax incentives for green energy would save money, but the CBO and most economists believe that still wouldn't be enough to make up for revenue lost by the bill's tax cuts.
The prospect of swelling national debt - which Trump promised to tackle during his election campaign - has prompted opposition from the House Freedom Caucus.
Moody's downgrades US credit rating citing rising debtMoody's downgrades US credit rating citing rising debt
Five House Republicans stall Trump's 'big, beautiful' tax billFive House Republicans stall Trump's 'big, beautiful' tax bill
MedicaidMedicaid
Perhaps the most contentious item in the bill are cuts - partly through work requirements - to Medicaid, a healthcare programme aimed at lower-income Americans.Perhaps the most contentious item in the bill are cuts - partly through work requirements - to Medicaid, a healthcare programme aimed at lower-income Americans.
Roy and other Republicans - including South Carolina's Ralph Norman, Oklahoma's Josh Brecheen and Georgia's Andrew Clyde - want further cuts to Medicaid and other social security programmes. Chip Roy of Texas and other Republicans in the House - including South Carolina's Ralph Norman, Oklahoma's Josh Brecheen and Georgia's Andrew Clyde - are pressing for the bill to go further.
On Sunday night, Speaker Johnson said "minor modifications" had been promised to the four rebels. On Sunday night, Speaker Johnson said "minor modifications" had been promised to the four rebels, including preventing undocumented immigrants from accessing Medicaid.
Norman said these concessions include making the Medicaid work requirements take effect sooner, preventing undocumented immigrants from accessing Medicaid and ditching green energy tax credits. The concessions also involved Medicaid work requirements.
The bill currently would require that states deny Medicaid coverage if able-bodied Americans using the programme are not working at least 80 hours a month or undertaking other community options - from 2029, after Trump has left office. Under the original House bill, states would have to deny Medicaid coverage to able-bodied Americans who were not working at least 80 hours a month or undertaking other community options, starting in 2029, after Trump left office. Coverage would also be ended for those not meeting work requirements.
It would also end coverage for those who cannot show they are meeting work requirements. In the current version, the requirements would start next year.
Roy and other conservatives want those work requirements to start straightaway - rather than after President Trump has left office. But other Republicans, such as Missouri Senator Josh Hawley, have argued against any cuts to Medicaid, warning they would hurt millions of lower-income constituents.
Other lawmakers, such as Missouri Republican Senator Josh Hawley, have argued against any cuts to Medicaid, warning it would affect millions of lower-income constituents. Hawley wrote in the New York Times the cuts would be "both morally wrong and politically suicidal".
Hawley wrote in the New York Times that such a move would be "both morally wrong and politically suicidal". Dozens of other Republicans are also concerned.
Dozens of other House Republicans have also voiced concerns.
State and local tax deductionsState and local tax deductions
Another point of contention in the bill is a tripling of a local tax deduction - known as Salt - from $10,000 to $30,000 for couples. Then, there are Republicans seeking larger tax cuts. They generally represent relatively wealthy areas in higher-tax, Democratic-dominated states such as New York.
Some lawmakers from states with high taxes such as New York, California and New Jersey have objected, saying that the proposed cap is not high enough. They want the bill to provide bigger tax credits for what people pay in state and local taxes - known as Salt.
In a joint statement earlier in May, New York Republican Congress members Elise Stefanik, Andrew Garbarino, Nick LaLota and Mike Lawler said Speaker Johnson's offer was too low and " insulting". The bipartisan "Salt Caucus" has been pushing raise the current $10,000 cap on such credits since it was formed in 2021. Some Republican members want it raised to $62,000 for individuals.
Some so-called Salt Republicans want the cap raised to $62,000 for individuals and double for couples filing jointly. House Speaker Mike Johnson and the so-called Salt Republicans reached a tentative compromise late Tuesday to raise it to $40,000, according to reports.
House Republican leaders are reportedly seeking a compromise that would see the cap raised to $40,000 for individuals and $80,000 for joint filers. But in a sign of how tricky negotiations have become, that news prompted dismay from budget hawks who insist that any such tax cut be balanced with correspondent spending cuts.
The "Salt Caucus" formed in 2021 is a bipartisan effort that brings together both Democrats and Republicans who hope to repeal the current $10,000 cap.
Food assistanceFood assistance
As part of the bill, House Republicans have called for substantial reforms to the Supplemental Nutrition Assistance Programme, or Snap. Every year more than 42 million Americans use federal food aid called Snap , which stands for Supplemental Nutrition Assistance Program, to buy groceries.
More than 42 million Americans currently benefit from the Snap programme, which allows them to use federal funds to buy groceries every year. Many House Republicans want to shrink the amount the government pays for "food stamps". The legislation would require individual states to shoulder 5% of the benefit's costs each year, as well as 75% of the administrative costs.
The legislation would require individual states to shoulder 5% of the benefit's costs each year, as well as 75% of the administrative costs. At the moment, states are not responsible for any Snap costs and pay 50% of administrative costs.
At the moment, states are not responsible for Snap costs and pay half of the administrative costs. Republicans also hope to expand existing work requirements, which currently apply to people without dependants between the ages of 18 and 54, by raising the upper age limit to 64.
Republicans also hope to expand existing work requirements for recipients, which currently apply to people without dependants between the ages of 18 and 54. The current proposal would expand that to 64. The House Agriculture Committee has already approved $300m (£223m) in reductions to Snap to balance out tax cuts.
Democratic National Committee chair Ken Martin said the proposal "is a slap in the face" to millions of Americans "who rely on food assistance programme to put food on the table and make sure their kids don't go hungry". Democratic National Committee chair Ken Martin called the proposed changes "a slap in the face" of millions of people who rely on Snap "to put food on the table and make sure their kids don't go hungry".
Republicans argue the proposal would reduce government waste, promote work over welfare, and restore "common sense" to the programme. Republicans say they would reduce government waste, promote work, and restore "common sense" to the programme.
The House Agriculture Committee has already approved $300m in cuts to the Snap programme to fund tax cuts. Government data shows about 12% of Americans received Snap benefits last year.
Government data shows that about 12% of Americans received Snap benefits last year, with the figure higher in some Republican-leaning states such as Alabama and Oklahoma. That figure is greater in numerous Republican-leaning states with relatively high poverty rates, including Alabama and Oklahoma.