Republicans in the U.S. Congress are expected this week to advance elements of their sweeping budget package that would cut taxes and tighten healthcare benefits for the poor, though they are still at odds over many details of their plan.
Republicans in the House of Representatives released draft legislation over the weekend that for the first time laid out specifics of the plan, which would be the centerpiece of President Donald Trump's domestic agenda.
It would build on tax cuts passed during Trump's first White House term that are due to expire this year, reducing revenues by roughly $5 trillion over the next 10 years, according to a congressional estimate. That lost revenue would be partially offset by new restrictions on the Medicaid health plan, which covers 71 million low-income people, and other spending cuts that would total $912 billion over the coming decade.
The U.S. federal government currently carries more than $36 trillion in debt and Republicans - who hold narrow majorities in the House and Senate - are wrestling with how to extend the tax cuts without adding too much to the quickly growing debt pile. The current proposal could add about $4 trillion to the debt over a decade.
House Speaker Mike Johnson has said that he wants his chamber to pass the bill before the U.S. Memorial Day holiday on May 26. Lawmakers face a harder deadline of mid-July, as Treasury Secretary Scott Bessent has urged lawmakers to raise the government's debt ceiling by that point to avoid a default that would upend global markets.
The thorniest matters related to the tax plan are still unresolved within the Republican ranks.
The tax proposal does not include Trump's suggestion to raise the tax rate on the wealthiest Americans, which would break with decades of Republican orthodoxy.
It also does not include Trump's promises to discontinue taxes on tips, overtime pay and Social Security retirement benefits, which would further reduce revenues and contribute to yawning budget gaps.
It is also unclear whether the bill would increase the deduction for state and local taxes -- a crucial issue for moderate Republicans from high-tax coastal states.
The plan would increase deductions for families with children, some multinational corporations and unincorporated businesses.
A separate outline released on Sunday aims to save hundreds of millions of dollars on Medicaid, in part by tightening eligibility and requiring recipients to work.
That stops short of the more dramatic cuts advocated by the party's right flank, but would still kick millions of people off the program, according to the nonpartisan Congressional Budget Office.
Those cuts are not likely to satisfy fiscal hawks, who are pushing for deeper spending reductions, and could also upset moderates who represent low-income areas where Medicaid is especially important.
Trump has repeatedly vowed not to cut Medicaid benefits, though it is not clear whether he would approve these proposed changes.
Republicans will have to resolve their differences in order to pass the budget package out of the House, which they control by a narrow 220-213 margin, and the Senate, which they control 53-47.
