House Republicans are locked in a fierce internal battle over how to extend expiring tax cuts and push forward former President Donald Trump’s extensive tax agenda. The struggle has placed Budget Chair Jodey Arrington and deficit hard-liner Rep. Chip Roy in direct conflict with Ways and Means Chair Jason Smith and other senior GOP members. This ongoing dispute has thrown a wrench into Speaker Mike Johnson’s plan to advance a budget blueprint, as Republican factions clash over the financial implications of the tax plan, methods to counterbalance the deficit impact, and possible cost-saving measures affecting Medicare and low-income assistance programs.
The Battle Over Deficit Spending
Despite some progress last week, one of the biggest roadblocks remains the insistence of Arrington, Roy, and other budget hawks on deep spending cuts. These lawmakers are particularly focused on a key aspect of the legislative process: the “budget reconciliation instruction” for the tax-writing Ways and Means Committee. Essentially, this instruction dictates the maximum amount the committee can add to the deficit while implementing Trump’s tax priorities, including permanently extending the 2017 tax cuts and exempting tips and overtime pay from federal income tax.
Smith (R-Mo.) had presented a figure of around $5.5 trillion at the GOP’s retreat in Doral, Florida, last month—an amount that took into account the costs of Trump’s tax plans, minus any spending reductions or revenue-raising strategies Ways and Means could deploy. However, Arrington, Roy, and their allies are pushing to further restrict deficit spending, bringing them into conflict with Smith and other senior Republicans who worry that Trump’s full tax agenda won’t fit into the package under the proposed constraints.
A Tight Squeeze on Tax Priorities
The latest tentative figure—approximately $4.7 trillion—has only intensified the debate. This amount barely covers the cost of making the 2017 tax cuts permanent, which Congress’ official accountants estimate at $4.6 trillion. As a result, additional Trump tax priorities may have to be scaled back or eliminated altogether.
“There will absolutely have to be trade-offs. You simply can’t fit it all into that,” noted Republican strategist Liam Donovan.
To make the numbers work, GOP members are considering shorter timelines for some of Trump’s other tax proposals. Arrington highlighted the two primary levers at their disposal: tax adjustments and spending reductions. However, a senior GOP aide, speaking anonymously, cautioned that these levers have their limits.
Mounting Frustration Among Republicans
Roy and Arrington’s insistence on deeper spending cuts has sparked frustration within the House GOP, with many fearing that their approach could doom the entire tax package.
“Roy and Arrington will make the tax cut portion not passable,” one Republican lawmaker warned, noting that failure to pass the bill could result in “the largest tax increase in history” or force Republicans into a bipartisan compromise with Democrats before current tax policies expire at the end of the year.
The internal GOP strife is also complicating Johnson’s plan to bundle taxes, border security, energy policies, and national security measures into a single legislative package. Hard-line conservatives like Roy and Freedom Caucus Chair Andy Harris (R-Md.) are advocating for a two-bill approach, aligning with Senate Budget Chair Lindsey Graham (R-S.C.), who is preparing to introduce his own budget blueprint.
Medicare, Biofuels, and Tariffs: More Points of Contention
Beyond tax cuts, other policy battles are heating up within the GOP. Arrington’s repeated suggestions to reform Medicare as a cost-cutting measure have alarmed even some conservative Republicans. Trump, who has vowed on the campaign trail not to touch Medicare, may find himself at odds with Arrington’s proposals.
Additionally, House Republicans from agricultural states are outraged over Arrington’s push to slash tax incentives for biofuels. A similar move nearly derailed former Speaker Kevin McCarthy’s debt ceiling deal in 2023, and tempers are once again flaring as farm-state lawmakers push back against any changes that could harm their constituents.
Meanwhile, GOP leaders are considering using revenue from tariffs to help fund the massive bill, though skepticism remains within Republican ranks. Trump himself has announced plans to introduce new tariffs, further complicating the economic calculations behind the legislation.
Work Requirements for Social Programs
Republicans are also planning to incorporate stricter work requirements for Medicaid and expand existing work mandates for SNAP food aid and the Temporary Assistance for Needy Families (TANF) program. These changes, according to sources familiar with the discussions, could be fine-tuned based on the size of the funding gap Republicans need to close.
For example, the GOP could raise the age range of individuals subject to additional work requirements or eliminate states’ ability to apply for federal waivers that ease work mandates for certain SNAP recipients. These adjustments are designed to tighten spending while maintaining support for tax cuts and other GOP priorities.
What’s Next for the GOP’s Tax Plan?
As negotiations continue, it’s clear that House Republicans remain deeply divided over how to move forward with Trump’s tax agenda. With the clock ticking on the expiration of the 2017 tax cuts, the GOP faces a tough balancing act: satisfying fiscal conservatives without sacrificing key elements of Trump’s economic vision.
If they fail to reach an agreement, Republicans could face a stark choice—either risk massive tax hikes or strike a deal with Democrats to keep some of Trump’s policies in place. As these internal battles rage on, the future of tax policy in America hangs in the balance.
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