Daijiworld Media Network - Washington
Washington, May 19: President Donald Trump’s controversial tax-cut bill, which aims to extend his 2017 tax breaks, cleared a major obstacle on May 18 after narrowly passing the House Budget Committee — a significant step toward potential passage in the full House later this week.
The bill passed the committee in a 17–16 vote, thanks to four hardline Republicans who voted “present” after intense closed-door negotiations with GOP leaders and White House officials. All Democrats opposed the bill.
The breakthrough offers a much-needed win for Trump and House Speaker Mike Johnson, following a temporary GOP blockade earlier in the week over disagreements about offsetting spending cuts — particularly to Medicaid and green energy tax credits.
The bill proposes deep Medicaid cuts that could remove 8.6 million people from coverage, eliminate taxes on tips and some overtime income (key Trump campaign promises), and expand defense and border spending.
However, the financial implications are massive: nonpartisan analysts warn the bill could add $3 trillion to $5 trillion to the nation’s already staggering $36.2 trillion debt over the next decade. The Congressional Budget Office previously found the original 2017 tax cuts increased the deficit by nearly $1.9 trillion, even accounting for economic growth.
The prospect of even greater fiscal imbalance contributed to Moody’s May 16 decision to downgrade the U.S. credit rating, citing an unsustainable debt trajectory potentially reaching 134% of GDP by 2035.
Despite growing alarm, Treasury Secretary Scott Bessent downplayed the downgrade in interviews on May 18, saying economic growth spurred by tax cuts would eventually offset the debt. “I don’t put much credence in Moody’s,” Bessent told CNN, brushing off the warnings as pessimistic.
Speaker Johnson echoed that sentiment, arguing that historic spending cuts in the bill would “help to change the trajectory for the U.S. economy.”
Deep rifts remain within the Republican caucus over the extent and targets of spending cuts. Hardliners demand drastic reductions, including Medicaid trims, while moderates fear backlash from voters who stand to lose healthcare coverage — particularly in states that helped elect Trump.
Another flashpoint is the SALT (state and local tax) deduction cap, which disproportionately affects taxpayers in high-tax states like New York and California. Several swing-district Republicans have threatened to withhold support unless the cap is lifted or adjusted.
Democrats uniformly oppose the bill, citing its regressive structure and potential to deepen inequality while ballooning the national deficit.
Senator Chris Murphy (D-CT) warned the Moody’s downgrade signals broader economic instability. “That means we are likely headed for a recession,” he said on NBC’s Meet the Press. “These guys are running the economy recklessly.”
Speaker Johnson plans to bring the bill to a full House vote this week, ahead of the May 26 Memorial Day recess. With only a 220–213 GOP majority and internal fractures, the margin for error remains razor-thin.
Looming beyond the tax-cut showdown is a far more pressing challenge: raising the U.S. debt ceiling later this summer to avoid a default that could devastate global financial markets.
For now, the focus remains on the fate of the tax bill — a legacy-defining moment for both Trump’s second term and the future of Republican fiscal policy.