Republican congressional leaders seem to be scaling back the "big, beautiful bill" sought by president Donald Trump after deficit hawks warned they would vote against the sprawling tax legislation.
The permanent extension of Trump's 2017 tax cuts could be cut, as well as the president's promised tax relief for seniors and exemptions on tips and overtime earnings, as key committees struggle to hit their $2 trillion target for spending cuts to offset those reductions in revenue, reported Politico.
“Republicans talk a big game … about reining in reckless spending,” said House budget chair Jodey Arrington (R-TX). “You won’t get the full permanency in the tax policy on all the provisions if we don’t get to the $2 trillion in savings, and that’s unfortunate.”
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GOP leaders are still considering Trump's request to increase income taxes on the highest earners to their pre-2017 levels, from 37 percent to 39.6 percent, to make room for his promised cuts to taxes on Social Security, tips and overtime, and Ways and Means chair Jason Smith (R-MO) will visit the White House on Friday to discuss ways to make that happen.
House speaker Mike Johnson (R-LA) told GOP lawmakers that he's scaled back his target from $4.5 trillion in tax cuts to $4 trillion, a half-billion less than many Republicans had hoped, and that's probably below what's needed to permanently extend the 2017 cuts, and he's pushing three key committees vote on their portions of the bill next week, and the Senate is likely to make revisions to anything those panels approve.
“I’m not excited about the proposal, but I have to say, there are a number of people in both the House and the Senate who are, and if the president weighs in favor of it, then that’s going to be a big factor that we have to take into consideration as well,” said Senate Finance Committee Chair Mike Crapo (R-ID).
Johnson's reduced target would force those committees to make some difficult choices, and tax writers say a number of tax provisions would be temporary, and blue-state Republicans shot down a proposal to increase state and local tax (SALT) deduction cap from $10,000 to $30,000 to raise more revenue to pay for Trump's priorities.
“We were on the 25-yard line with about 75 yards to go,” said Rep. Nick LaLota (R-NY). “We got sacked at that meeting. We probably lost five to ten yards.”
The scaled-back tax cuts are seen as a setback to Trump's agenda, but Politico reported that two White House sources are relieved that GOP lawmakers have backed down on cuts to safety net programs, such as Medicaid, and are privately hoping that swing-district moderates to win out over budget hard-liners.