While President Donald Trump is focused on tariffs on toys and on the foreign film industry, and on negotiating trade deals with dozens of countries, Republicans on Capitol Hill have turned their attention to another important “t” word: taxes.
Well, taxes, federal spending, and the statutory debt limit.
Some committees in the U.S. House of Representatives have begun the actual writing, markup, and passage of their various pieces of the fiscal year (FY) 2026 budget reconciliation package, or the “big, beautiful bill” President Trump wants to use as a vehicle to make large cuts to federal spending, raise the debt limit, enact border security and immigration policies into law, extend expiring provisions of the 2017 Tax Cuts and Jobs Act (which was, as readers will recall, signed into law by President Trump during his first term), and enact other tax policies the president favors.
Where does the work on the budget reconciliation process stand right now, how do Americans feel about the GOP’s priorities, and what is the likelihood Congress will meet its self-imposed July 1 deadline to get this legislation to the president’s desk?
Let’s take a look.
Republicans Have Delayed Key Committee Budget Reconciliation Markups
As we’ve noted before, budget reconciliation is a legislative mechanism that allows the party in power in the upper chamber of Congress to bypass a Senate filibuster. With budget reconciliation rules in place, the majority needs to win the support of just a bare majority of senators to approve legislation instead of the 60 votes typically required to break a filibuster.
In other words, because they only control only 53 Senate seats, Republicans’ dreams of a “big, beautiful bill” comprised of tax and spending cuts, energy and immigration policies, and a debt limit increase, would be doomed if not for budget reconciliation rules.
Of course, the bill still faces a tough road even under this special process.
This week, several committees that were supposed to meet, with both Republicans and Democrats, for hearings to mark up their respective portions of the budget reconciliation bill delayed those proceedings. Instead, according to Punchbowl, the GOP leaders of these panels assembled Tuesday morning for “private, Republican-only meetings about the future of the Trump agenda.”
As if that Punchbowl characterization did not sound ominous enough, after those meetings, GOP leaders, including Speaker of the House Mike Johnson (R-La.), met with moderate House Republicans “to discuss Medicaid spending cuts and programmatic changes that party leaders want in the reconciliation package.”
Presumably, taking the markups off the official committee schedules, combined with the outreach to more moderate-leaning lawmakers, indicates Speaker Johnson and House leaders do not yet have the full support of their conference, or, perhaps more importantly, the simple majority they’ll need to pass the bill on the House floor.
Indeed, there are many challenges that are preventing consensus.
Republican Lawmakers Are Divided on Budget Reconciliation Priorities
Members of the House GOP conference are divided over at least three aspects of the budget reconciliation framework: cuts to entitlement programs like Medicaid, changes to a critical food and nutrition program, and the state and local tax, or SALT, deduction.
Readers may recall that, prior to the 2017 Tax Cuts and Jobs Act, taxpayers could deduct from their federal tax bill all of the tax revenues they paid to their state and local governments. The 2017 legislation President Trump signed into law capped that deduction at $10,000. This provision, of course, affected taxpayers in high-tax jurisdictions, like New York and California, more than it did taxpayers in places like Texas and Tennessee, which have no state individual income tax.
Republicans from high-tax jurisdictions want to raise the $10,000 cap, but, as Politico explained, even this small group of lawmakers cannot agree on what exactly to do. Some want to limit the income level to which the deduction would apply at all. Others do not. These Republicans are also divided on how high to raise the cap, or whether to eliminate it altogether. After this group of high-tax state GOP lawmakers resolves their own disagreements, they will have to contend with Republican colleagues from low-tax jurisdictions who do not want to raise the SALT limit at all. Any increase to or elimination of the 2017-imposed SALT deduction cap will cost hundreds of billions of dollars, or even more than $1 trillion, over the next 10 years. To meet their pledge of the reconciliation package reducing federal spending, GOP leadership will need to offset these costs.
Speaker Mike Johnson (R-LA) has said the party is nearing a deal, but, according to Politico, the House Ways and Means Committee is still very much in the thick of these discussions.
Regarding one of the other issues, cuts to Medicaid, a program that provides health insurance to adults and children with limited incomes, Republicans have made some headway.
As Roll Call reported last night, GOP leaders have “ruled out two Medicaid policies that could go a long way toward meeting the Energy and Commerce Committee’s $880 billion, 10-year savings target but faced strong pushback from blue-state GOP centrists.” Specifically, Speaker Johnson said Republicans will not touch the Federal Medical Assistance Percentage, or FMAP, rate, or the portion of state Medicaid costs borne by the federal government. Second, Republicans will not seek to implement per capita caps on Medicaid benefits for enrollees in states that have recently expanded Medicaid eligibility.
Because of the agreed-upon changes, “Republicans will have to come up with alternative savings.” That fact could, of course, open up new disagreements. Conservative Republicans have also voiced opposition to Speaker Johnson’s concessions. On X yesterday, the Freedom Caucus balked at the plan to do away with those two Medicaid cuts.
“The problem for Johnson is that he can’t please the moderates without risking an uproar from conservatives. And vice versa,” Punchbowl wrote, “It’s the same dynamic that’s plagued the last three Republican speakers. Moderates help give Republicans their majorities. Yet they’re often forced to swallow conservative policies that don’t fit the political makeup of their districts.”
Roll Call also noted Republicans are divided on cuts to the Supplemental Nutrition Assistance Program, or SNAP, which provides benefits to families subsisting on lower incomes so they can afford nutritious food. Republicans on the House Agriculture Committee, which is supposed to come up with $230 billion in spending cuts, are considering implementing a state-match requirement. But Rep. Derrick Van Orden (R-Wis.) opposes the idea since he said it would force states like his own to subsidize other states with higher SNAP overpayment error rates.
“I want to be explicitly clear; I will not vote to have the citizens of the state of Wisconsin pay 10 percent cost share to make up for other people’s just blatantly horrible management,” Van Orden said.
As a reminder, Republican leaders can only lose up to four votes on any given piece of legislation. If Van Orden, along with four of his colleagues, vote no on the GOP budget reconciliation bill, the legislation — and the centerpiece of the Trump agenda — will suffer a defeat.
But, according to recent polling, Rep. Van Orden’s views may be closely aligned with most Americans’.
Americans Are Wary Of Republicans’ Budget Plans
According to a Kaiser Family Foundation poll released last week, “there is partisan agreement when it comes to funding cuts to Medicare, Medicaid, and Social Security with more than nine in ten Democrats, eight in ten independents, and more than half of Republicans opposing federal funding cuts to each of the three government programs.”
Regarding Medicaid on its own, 76 percent of Americans oppose making cuts to the program. That number includes 55 percent of Republican voters. According to AXIOS, Republicans’ own internal poll also shows voters oppose cuts to Medicaid.
On taxes, Republicans, including GOP lawmakers from high-tax states, may have more voters on their side, but they still need to balance a prevailing view that Republican tax cuts will not benefit their own families.
While we could not find recent polling on the SALT deduction specifically, a Public Opinion Strategies survey released this week shows that Americans want the 2017 Tax Cuts and Jobs Act (TCJA) kept as is. Additionally, 68 percent of Americans indicated that the federal government is taking too much of their take-home pay.
Even with support for the TCJA, however, a YouGov poll released last month found Republicans will have to be careful on their tax messaging and policy. That survey determined 65 percent of Americans think wealthy Americans pay too little in taxes, and 47 percent expect that the wealthy will pay less under the Republicans’ budget plan. Majorities also said the middle class (59 percent) and the poor (53 percent) pay too much in taxes, and many believe that under the GOP’s outline, these groups will either pay more or about the same amount.
Finally, 64 percent believe Republicans’ budget reconciliation bill will increase their own taxes or just keep them the same.
With Americans clearly wary or outright opposed to some GOP priorities, Republicans will meet again today to hash out their own internal differences. House Energy and Commerce Republicans were set to convene at 10 a.m., while the House Ways and Means Committee Republicans, the tax writers, were set to meet at noon. Republican House and Senate leaders, along with the heads of the two tax-writing committees, are also scheduled to meet with Treasury Secretary Scott Bessent later this afternoon.
In the background, these policymakers may feel like a big clock will be ticking. After all, July 1 is only 54 days, or less than eight weeks, away.