GOP lawmakers on the House tax-writing committee advanced a key portion of President Trump’s “big, beautiful” bill early Wednesday after an all-night debate — but still face an uphill battle before the extension of the 2017 tax cuts becomes law.
In a 26-19 party-line vote, the House Ways and Means Committee cleared the tax measure, sending it to the House Budget Committee, where it will be combined with other components of the “big, beautiful” bill that are going through various committees.
“Thanks for playing,” committee Chairman Jason Smith (R-Mo.) wrote on X following the markup hearing, which lasted approximately 17 hours after getting underway at 2:30 Tuesday afternoon.
Republicans spent much of that time fighting off a series of amendments from Democrats, including proposals to eliminate Trump’s tariffs and raise the state and local tax deduction (SALT) cap to $80,000.
With Republicans holding a 220-213 House majority, they can only afford three defections to pass party-line legislation.
What’s in the tax bill?
- Extension of the 2017 Tax Cuts and Jobs Act, key components of which are due to expire at the end of the year.
- Temporary elimination of taxes on qualified tips, overtime pay and car loan interest payments.
- An additional $4,000 deduction for senior Americans in lieu of no taxes on Social Security.
- SALT cap increase to $30,000 for individual taxable incomes of $400,000 or less — something a group of blue state Republicans have rejected.
- Overall, the measure would add an estimated $3.7 trillion to the debt over a 10-year period, according to an estimate from the Joint Committee on Taxation (JCT), which studies the impact of legislation on revenue. This is less than the initial $4.5 deficit increase the GOP anticipated.
The biggest hurdle to GOP harmony is the proposed SALT deduction cap, which a group of New York Republicans has rejected as “insulting.”
The 2017 Trump tax bill narrowed the cap to $10,000 a year, and blue state lawmakers have aggressively lobbied to increase it ever since.
House Speaker Mike Johnson (R-La.) has remained optimistic that Republicans will be able to resolve the SALT dilemma.
Fiscal hawks have also raised concerns about the total impact the “big, beautiful” bill could have on the federal deficit.
The tax plan that cleared Ways and Means early Wednesday would cut rates to the tune of $3.6 billion for the bottom 20% of American income earners, $24.4 billion to the quintile above that, $49.6 billion to the middle fifth, $106.3 billion to the second-highest 20% of earners and $384.6 billion to the top 20%, according to an analysis by the Joint Committee on Taxation.
Republicans have underscored that keeping the 2017 tax law’s lower rates on businesses is important for the economy and job creation.
“That’s why we’re here — to fight for the working men and women who built this country,” Smith said before the committee advanced the bill. “Failure is not an option through this process.”
Other components of the broader “big beautiful” bill package are making their way through other committees as well.
On Tuesday evening, the House Energy and Commerce Committee began working to approve roughly $900 billion in cuts, including reductions to Medicaid, which has been a point of friction between moderate and hardline Republicans.
The House Budget Committee is set to begin markup on the consolidated measure Friday.
The “big, beautiful” bill is meant to include tax cuts and discretionary spending cuts, along with increases in funding for defense, border security and energy exploration.
It is being designed to clear the Senate via the reconciliation process in order to circumvent a Democratic filibuster, which requires 60 votes to overcome.
GOP leaders are aiming to get the marquee legislative package to Trump’s desk by the Fourth of July.
