At 10 a.m. today, Speaker Mike Johnson will bring together the warring factions inside the House Republican Conference. At stake is President Donald Trump’s legislative agenda – and the GOP majority.
Members of the House Freedom Caucus will be there. They’re furious that the “One Big, Beautiful Bill” doesn’t go far enough in cutting government spending – especially on Medicaid – and say the package needs to be reworked.
Five key members of the GOP SALT Caucus, increasingly skeptical of Johnson’s ability to craft a deal to lift the state-and-local tax deduction cap, are also invited.
Republican members of the House Ways and Means Committee, openly sick of the SALT fight after having just approved a $3.8 trillion tax-cut package, will be there too.
Johnson is running out of time to find a consensus on the reconciliation bill. The House Budget Committee is scheduled to assemble the component parts of this wide-ranging legislation – 11 committees are involved in the process – into one mega-package on Friday.
Johnson wants the legislation in front of the House Rules Committee on Monday in advance of a vote next week. His self-imposed deadline for getting the package through the House is May 22.
Yet Johnson is going to have to make changes to this legislation in the Rules Committee or on the floor. That’s certain.
As of right now, Johnson and the House GOP leadership don’t have the votes to pass this big chunk of Trump domestic agenda, although they’re keeping an upbeat appearance in public.
Trump should – and almost certainly will – get involved to close this out.
Conservatives. Put yourself in the conservatives’ shoes for a moment. They’ve been talking about making drastic structural changes to Medicaid for years. While hardliners believe it’s time to push the envelope and reverse years of dramatic growth in the program, the House Republican leadership is balking at the most sweeping moves.
The problem is that what the House Freedom Caucus is asking for can’t pass the House and certainly wouldn’t pass the Senate.
After a grueling 26-hour markup, the Energy and Commerce Committee adopted a package that includes huge Medicaid changes that cut spending by hundreds of billions of dollars. CBO estimates 8.6 million additional people would go uninsured, while Democrats say it’s 13.7 million if you factor in the expiration of Obamacare subsidies.
The proposal also includes massive revisions to the Inflation Reduction Act that even some Republican lawmakers don’t like.
Rep. Ralph Norman (R-S.C.) argues that Republicans shouldn’t delay the implementation of work requirements for Medicaid for four years or put off the phase-out of IRA clean energy tax credits.
“How is that a cut? How is that meeting the intent of the cuts? Why are they waiting? You got to do it now,” Norman said, calling the bill filled with “smoke and mirrors.”
“If it comes like it is, I’ve got a real problem with it,” Norman declared.
Conservatives have more leverage than any other group has. Norman and Rep. Chip Roy (R-Texas) both sit on the Rules Committee. They can throw a wrench in Johnson bringing this bill to the floor.
GOP leaders’ hope is that Trump can turn hardline conservatives by expressing the urgency of passing this bill. In response, Norman said he’d seek a meeting with Trump to explain that this bill doesn’t do what he said it would during the campaign.
The White House deployed OMB Director Russ Vought, as well as Hill liaison James Braid, to meet with the HFC board on Tuesday night, according to people familiar with the meeting.
The question for the HFC is will they fight for policies that probably can’t pass and would most likely cost moderate Republicans their seats?
SALTers. Let’s put it plainly: Moderates always fold. The GOP leadership knows that. And they’re expecting it once again this time around.
We’ve written this ad nauseam over the last few weeks, but SALTers say that raising the deduction cap for state and local taxes is a matter of political survival.
The problem for Johnson is that there are enough of them – five – to bring down this bill. But much of the rest of the conference, HFC included, is unpersuaded by their arguments that blue-state taxpayers need a break.
Will they fold? It’s tough to say. The SALT cap disappears in 2026, allowing unlimited deductibility for state and local taxes — but other 2017 tax cuts disappear too. If SALTers agree to a cap, Democrats will hammer them. If they don’t, they risk putting Trump’s entire agenda at risk.
The sweet spot for them is a 10-year cap around $40,000 for individuals and $80,000 for married couples. The GOP leadership wants to phase out the higher SALT cap, and potentially snap it back to $10,000. Rep. Nick LaLota (R-N.Y.) said that would be a “red line” for him. And Rep. Young Kim (R-Calif.) called it a “nonstarter.”
A high SALT cap such as that is pricey – no doubt. But these are the folks that give Republicans their majority. And SALT isn’t their only gripe. They also have big issues with the scale of Ways and Means’ IRA tax credit repeals. That costs money too and is the opposite of what conservatives are demanding, which neatly describes the pickle Johnson is in.
For Johnson, the big risk is that the SALTers go see the president – a fellow New Yorker – to plead their case and Trump agrees. But the challenge for Johnson is finding a sweet spot that doesn’t cost a fortune and selling it to a skeptical conference.
Also: House Majority Whip Tom Emmer will host a conference wide briefing today at 2:30 p.m. to allow committee chairs to brief Republicans on their sections of the reconciliation package.
