Washington: President Donald Trump’s tax cut and spending bill confronts a critical test late Tuesday into Wednesday as Republicans in the U.S. House of Representatives wrestle with internal divisions over Medicaid cuts and tax breaks benefiting high-cost coastal states.
The House Rules Committee, tasked with setting the terms for debate, has scheduled an unusual hearing starting at 1 a.m. ET (0500 GMT), expected to stretch well into the following day. During this marathon session, committee members will debate the details of the legislation. If approved by Congress, the bill would reduce certain health and food benefits for low-income Americans, eliminate some green-energy programs, and allocate tens of billions of dollars toward immigration enforcement.
On Tuesday, Trump met with lawmakers to rally support for what he called a “big, beautiful bill,” but his efforts failed to sway several Republicans who remain opposed to specific provisions.
House Speaker Mike Johnson faces a narrow margin for error, as his party holds a slim 220-213 majority in the House. Even a small number of defections from Republicans could derail the bill. Democrats have criticized the package, calling it a giveaway to the wealthy that slashes vital social programs.
Fiscal conservatives had previously blocked the bill in another committee last Friday but relented late Sunday night. A similar showdown could occur in the Rules Committee, where several Republicans are demanding deeper Medicaid cuts. Medicaid serves approximately 71 million Americans and has become the focal point of negotiations.
The bill would extend the 2017 tax cuts, which were a signature legislative achievement of Trump’s first term. It also proposes tax breaks on income from tips and overtime pay, reflecting Trump’s populist campaign promises. However, nonpartisan analysts warn the bill could increase the federal debt by $3 trillion to $5 trillion, adding to the current $36.2 trillion national debt.
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If the Rules Committee approves the bill, Speaker Johnson could schedule a House floor vote as early as Wednesday.
Medicaid remains the key sticking point, with fiscal hawks insisting on cuts to offset the tax break costs, while moderate Republicans argue such cuts would harm voters whose support is critical for the 2026 midterm elections.
Additionally, centrist Republicans from high-tax states like New York and California are pushing to relax a $30,000 cap on state and local tax deductions, further complicating negotiations.
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Trump has demanded unanimous Republican support and warned that dissenters could face expulsion from the party.
Last week, credit-rating agency Moody’s downgraded the U.S. government’s top-tier credit rating, citing the rising national debt as a key factor.
Should the bill pass the House, it would move to the Senate, where Republicans hold a 53-47 majority. A Senate vote is unlikely before next month, as Congress prepares for a week-long recess starting next week.
