Background on Key Players and Context
The Republican-controlled U.S. House of Representatives is working to pass President Donald Trump’s comprehensive tax overhaul this week, despite an ongoing battle over spending cuts and tax exemptions that threatens to fracture their fragile majority.
This push continues even after Moody’s stripped the U.S. government of its top-notch credit rating, stating that multiple administrations and Congress have shown no political will to tackle the nation’s growing $36.2 trillion debt pile.
The legislation, which had been stalled for days, moved forward in an unusual Sunday night session in the House, with four hardline conservatives voting to proceed while pushing for deeper spending cuts in private talks with Republican leaders and White House representatives.
Key Developments and Next Steps
The next test will take place Wednesday at 1 AM local time when the House Rules Committee will decide whether to allow a full chamber vote.
Republicans remain divided on key aspects of the bill, including Medicaid cuts and limits on state and local tax deductions.
“We still have this week more meetings with different factions of our conference, from moderates to hardliners, and everyone in between because there are many crucial parts to this bill,” Steve Scalise, the second-ranking Republican in the House from Louisiana, told CNBC.
House Speaker Mike Johnson is pushing for the legislation’s approval and transmission to the Senate before Memorial Day, May 26.
With a 220-213 majority in the House, Republicans are divided over the depth of spending cuts to offset the tax cuts’ cost. So far, the Republican-controlled Congress has not rejected any of Trump’s legislative requests.
Key Questions and Answers
- What is the tax overhaul bill about? The bill aims to revamp the U.S. tax system, including reducing individual and corporate tax rates, eliminating certain deductions, and making changes to international tax rules.
- Who is pushing for the bill’s passage? Republicans, who control the House of Representatives, are working to pass the bill before Memorial Day.
- What are the main points of contention? Key disagreements include Medicaid cuts, limits on state and local tax deductions, and the depth of spending cuts to offset tax reductions.
- What happened during the Sunday night session? Four hardline conservative representatives voted to advance the bill while pushing for deeper spending cuts in private negotiations.
- What is the next step? The House Rules Committee will decide on Wednesday whether to allow a full chamber vote on the tax overhaul bill.
