The package to enact President Donald Trump’s agenda is still in flux and will likely change.
Trump’s tax-cut bill passes key committee, moves to House
President Donald Trump’s sweeping tax-cut bill passed a key committee and will move to a House vote.
- If passed into law, the bill would push 7.6 milion people off Medicaid, according to the Congressional Budget Office.
- Cuts and new conditions for SNAP food aid would save $300 billion over ten years.
- Trump’s 2017 tax cuts would be made permanent, costing $2 trillion over the next decade.
WASHINGTON – After months of sometimes tortured negotiations, a massive package to enact President Donald Trump’s agenda is rolling toward a vote.
It’s packed with GOP priorities spanning from energy and border security to taxes and changes to Medicaid and SNAP benefits.
Fiscal conservatives are pushing for more cuts ahead of the May 22 vote, while blue-state Republicans are pushing for a state and local tax deduction that may be key to their political survival. Several parts of the package are still being negotiated and are likely to shift right up until the full House votes.
A slim GOP margin on taxing, spending bill
The margins are slim: Because no Democrats are expected to support the proposal, House Republicans can lose only three GOP votes to pass it.
Even then, the legislation is still far from the finish line. Once it gets through the House, it will likely have to go through committees and a floor vote in the Senate before it is once again reconciled with the House and sent to the president. The policy details may be tweaked at any point along the way.
House Speaker Mike Johnson has said he wants to pass the bill before Memorial Day.
“I am absolutely convinced we’re going to get this in final form and pass it in accordance with our original deadline,” he told reporters on May 18.
Here are some of the more important pieces of the bill, as they are currently written.
Amped up border security
The bill includes more than $140 billion in spending on the Trump administration’s plan to crack down on illegal immigration.
That includes $50 billion for completing the wall on the southern border, $45 billion for detention centers, $8 billion to hire more immigration officers, and $14 billion for deportations.
Boosted defense spending
The bill includes around $150 billion more in defense spending, which could increase as it goes through the Senate.
The current proposal includes $20 billion that would go, in part, to creating a “Golden Dome” missile defense system that Trump has promoted.
Changes could push 7.6 million off Medicaid
Medicaid, the program that provides health insurance to more than 71 million low-income Americans, would undergo big changes if the bill remains as is.
House Republicans have proposed changes that would save at least $625 billion and cause 7.6 million Americans to lose their health insurance over the next 10 years, according to initial estimates by the nonpartisan Congressional Budget Office.
The bill would implement work requirements for adults enrolled in Medicaid expansion and increase the frequency of eligibility checks to ensure people still qualify for the program.
The proposal would also bar Medicaid from funding services at clinics that also perform abortions, such as Planned Parenthood, and discourages states from using their own funds to provide Medicaid coverage to undocumented children.
Food assistance work requirements
The proposal would implement new requirements in the Supplemental Nutrition Assistance Program, known as SNAP or food stamps, which provides food assistance to around 42 million Americans.
That would save up to $300 billion over the next ten years and shift more of the cost of the program to states.
The Republican plan would implement new work requirements for people ages 55 to 64, require states to provide more funding for the program for the first time, limit SNAP eligibility to citizens and lawful permanent residents − and prevent future presidential administrations from increasing benefits without Congressional approval.
$2 trillion in tax breaks
Republicans want to make permanent the 2017 Tax Cuts and Jobs Act, a bill passed during Trump’s first term that lowered taxes for all income brackets but disproportionately benefitted the highest earners.
The cuts implemented in 2017 expire at the end of the year. If they are not extended, income tax rates will go up for all but two income brackets next year.
This is the most expensive provision in the bill and is expected to cost over $2 trillion over the next ten years alone.
No tax on tips, overtime, car loan interest
Two of Trump’s major campaign promises – no taxes on tips or on overtime wages – are included in the bill.
Workers could claim the tax deduction through 2028. Both include guardrails to stop “highly compensated employees” from claiming the deduction, and the tipped work specifies what kind of occupations are eligible, such as people serving food or providing beauty services.
Both provisions also require workers to list their Social Security number when they claim the deduction, which bars undocumented workers from claiming it.
The bill would also allow people to temporarily deduct up to $10,000 in car loan interest payments if they buy an American-made vehicle. The total deduction amount would decrease for people who make more than $100,000, or $200,000 filing jointly.
Raising the debt ceiling
The United States Treasury expects the country will hit the debt ceiling in August. In order to avoid a catastrophic default on the national debt, Congress will have to approve an increase in the debt ceiling. This legislation raises the debt ceiling by $4 trillion.
Expanded child tax credit
The bill would increase the child tax credit to $2,500 through 2028. It would drop to $2,000 after that.
The child tax credit is currently $2,000 but will go back to $1,000 at the end of this year if not extended.
Extra money for seniors
People over age 65 could deduct an additional $4,000 from their taxes if they make less than $75,000 or $150,000 filing jointly. People who make more than that are eligible for smaller deductions as their income increases. The deduction would last through 2028.
Green energy roll-backs
The bill would rescind several climate change-related provisions of former President Joe Biden’s Inflation Reduction Act, including a $7,500 tax credit for electric vehicles.
It would pull back unspent money for several grant and loan programs at the Energy Department and Environmental Protection Agency, delay methane fees for oil and gas companies, repeal additional rules encouraging the adoption of electric vehicles, and accelerate permitting for fossil fuel projects.
‘MAGA’ savings accounts
Children under 8 years old would be given $1,000 each for their parents to open “money accounts for growth and investment,” also known as a “MAGA” savings account.
Parents, other relatives and non-profits could contribute $5,000 annually to the account tax free until the child is 18, when a portion of the funds can be used for higher education, training programs, buying a home or starting a small business until age 30, when the funds would become unrestricted.
More SALT
State and local tax deductions, also known as SALT, allows people to write off a portion of their local taxes from what they owe the federal government.
The 2017 tax law capped that deduction at $10,000. But now a handful of Republican members from high-tax states like California, New York and New Jersey are pushing to raise it.
The proposed bill would raise that cap to $30,000. However, the group of blue-state Republicans says it is not enough and is negotiating with Johnson to boost it further. That number is likely to rise before the bill is passed out of the House.
Taxing private university endowments
The bill would increase taxes on private university endowments.
The rate would jump significantly for schools with higher rates for larger endowments, like those held by elite schools such as Harvard University.
For example, schools with endowments of more than $500,000 but less than $750,000 per student would be taxed at 1.4%, while schools with endowments of more than $2 million per student would be taxed at 21%.
Private school vouchers
The bill would allow the federal government to spend $5 billion per year for the next four years on vouchers that could be used to subsidize education outside of public schools.
Families who earn less than three times their local median income and who receive the federal scholarships created by the program could choose to spend the estimated $5,000 they receive on tuition or other schooling needs at private schools, parochial schools or homeschooling.
Kayla Jimenez contributed.