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Home Breaking News

Capitol agenda: Trump’s tax cuts on trial

by DigestWire member
May 12, 2025
in Breaking News, Politics, World
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House Republicans are just 30 hours away from starting their most consequential committee votes yet on President Donald Trump’s “big, beautiful bill.” Here’s the latest on what we know as GOP leaders push to have the bill on the floor next week.

First, for your situational awareness: After committee votes this week, GOP leaders are aiming for the Budget Committee to vote on the plan Friday morning, followed by Rules Committee consideration next Monday. The real hard deadline for Hill Republicans is August, which is when Treasury expects the U.S. to hit its debt limit X-date and run out of cash to pay its bills. The administration wants Congress to act on that by mid-July.

MEDICAID CUTS TAKE SHAPE — Energy and Commerce Chair Brett Guthrie late Sunday unveiled the slice of the budget reconciliation bill that his committee is set to take up Tuesday. It appears to be an attempt at striking a compromise between GOP moderates and conservative hardliners who have been at odds over how much to cut Medicaid to help pay for the bill’s latest round of Trump tax cuts.

But it could still lead to millions losing Medicaid coverage and force states to make difficult decisions. Guthrie is declining to cap federal funding to states that have expanded Medicaid, a proposal that moderates were wary of. But the plan would limit taxes that states levy on hospitals and providers to help finance their Medicaid programs, which could lead states to cut benefits. State officials are poised to fight back.

TAX CUT QUESTIONS — Later Monday, Ways and Means Chair Jason Smith is expected to release the full details of his plan to extend Trump’s 2017 tax cuts and enact a further tax overhaul, after circulating an incomplete version Friday night. Ahead of a markup that begins Tuesday at 2 p.m., Smith is expected to brief Republican lawmakers on the details Monday at 1 p.m.

Right now, the bill appears to have a math problem. The draft that Ways and Means released Friday has an estimated $5 trillion cost, above the $4.5 trillion that Republicans permitted in their underlying budget framework. It’s raising questions about whether the full bill will include some tax hikes. The Friday draft was also silent on a number of Trump 2.0 tax proposals.

SALT was another glaring omission, and we’re expecting further movement on that Monday. SALT Republicans who’ve been clashing with leadership — and each other — over the parameters for lifting the cap on state and local deductions are meeting with Ways and Means Republicans and Speaker Mike Johnson at 10 a.m. to try to hash out a deal, according to two people familiar with the plans.

Fill in the blanks: We’re looking for details Monday on some of Trump’s biggest campaign-trail tax pledges, including eliminating taxes on tips and overtime, and expensive business provisions Republicans want to restore.

SNAP FIGHT — Republicans will turbocharge the fight over the nation’s largest anti-hunger program when House Agriculture releases its megabill proposal Monday. Ahead of a markup beginning Tuesday at 7:30 p.m., the text will put details behind a slew of proposals Republicans are pushing as they look to cut $230 billion in federal spending on the Supplemental Nutrition Assistance Program.

The most contentious plan would force states to pay for a portion of benefits for the first time, alarming GOP centrists like Reps. Don Bacon and David Valadao and state GOP leaders. West Virginia Gov. Patrick Morrisey and Alabama Commissioner of Agriculture and Industries Rick Pate are among those warning that the cost-sharing proposal would blow holes through state budgets and lead to massive reductions in services.

Pressure’s on: Families Over Billionaires, a liberal-leaning nonprofit, will hit Republicans over Medicaid cuts and tax changes that benefit the wealthy via mobile billboards circling the Capitol and House office buildings through Wednesday, the group shared first with us.

What else we’re watching:

— Trump’s new pharma plan: The president is set to sign an executive order Monday that could limit Medicare drug costs by tying them to the lower prices other nations pay. It comes after Hill Republicans balked at a similar proposal for Medicaid as an alternative to steep cuts to the program in their megabill. The pharmaceutical industry has slammed the proposals; the new executive order could cost companies billions of dollars.

— Trump’s fresh tests for Hill leaders: Look for top lawmakers to face questions over two weekend developments that pose potential conflicts between the White House and the legislative branch. An ABC News report that Qatar’s royal family was poised to make a super luxury Boeing 747-8 jumbo jet available for Trump as Air Force One and for use after he leaves office is raising ethics questions on both sides of the aisle. Democrats are also hammering Trump for his firing spree at the Library of Congress, after he terminated Register of Copyrights Shira Perlmutter.

— ICE detention center fallout: DHS says arresting three Democratic lawmakers is “on the table” after Reps. Bonnie Watson Coleman, Rob Menendez and LaMonica McIver were involved in a chaotic scene Friday outside an immigration detention center in New Jersey. Watson Coleman claims she was “physically shoved” by an ICE agent. House Minority Leader Hakeem Jeffries is warning the Trump administration to “keep your hands off of members of Congress.”

Benjamin Guggenheim, Meredith Lee Hill, David Lim and Jordan Wolman contributed to this report.

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