The brutal political realities of the House GOP are about to upend President Donald Trump’s tax pledges.
A permanent extension of Trump’s 2017 tax cuts is under threat, as are a slew of second-term campaign promises, including exempting taxes on tips and overtime earnings and providing tax relief for seniors.
House Republicans are poised to disappoint Trump because they can’t agree on sufficient spending cuts to pay for his desired menu of tax policies under the GOP’s budget reconciliation plan. Speaker Mike Johnson told Republicans in a private meeting Thursday that he’s now targeting $4 trillion in tax cuts — a half-trillion less than many in the GOP had hoped.
It’s setting up a tough day for House Ways and Means Chair Jason Smith. The Missouri Republican is set to meet with Trump on Friday, as GOP leaders scramble to keep the tax package from unraveling. Republican lawmakers and aides have been signaling this week that some of Trump’s pledges will have to be temporary to make the budget math work. Johnson also plans to talk with Trump by phone later Friday about the megabill, including the tax piece.
The tensions are rising among House Republicans who see what’s coming.
“Democrats scare some of my members,” said House Budget Chair Jodey Arrington (R-Texas), who chided his colleagues Thursday for getting cold feet on spending cuts. “They paralyze our conference and, quite frankly, frighten us into inaction.”
Even so, some in the White House are relieved that Congress may hold off from deeper cuts to safety-net programs and are privately rooting for swing-district moderates to win out over hard-liners fighting to slash spending.
Some senior Republicans are downplaying Trump’s last-minute push this week to raise taxes on top earners, but it’s still threatening to stir up a bare-knuckle fight within the House GOP conference with precious time running out. People with direct knowledge of the discussions told POLITICO it appeared to be more about messaging than raising money available in the budget reconciliation bill.
What we’re watching Friday: Be on the lookout for formal markup announcements as Ways and Means, Energy and Commerce and Agriculture try to move ahead with votes on all of these tough policy questions next week.
And look for further fallout from Thursday evening’s SALT spat. New York Republican Reps. Elise Stefanik, Andrew Garbarino, Nick LaLota and Mike Lawler said they’re rejecting a $30,000 cap to the state and local tax deduction, one number House Republicans are discussing. Johnson indicated there wasn’t yet a formal offer.
What else we’re watching:
— Crypto bill crashes: One of the GOP trifecta’s first major policy pushes is in flux after Senate Democrats derailed a long-awaited crypto bill in a procedural vote Thursday. They accused Republicans of moving to a vote too early, but key Senate Democrats said they’re willing to return to the negotiating table to reach a deal. Senate Majority Leader John Thune could bring the stablecoin regulatory framework back up in the coming days.
— The Library of Congress’ next chapter: Trump’s abrupt firing of Librarian of Congress Carla Hayden on Thursday evening triggered intense backlash from top Democrats. Some are now calling for the librarian’s appointment to fall under Congress’ purview, rather than the president’s. Rep. Joe Morelle (N.Y.), the top Democrat on the House panel that oversees the library, plans to introduce legislation to that effect. We’ll see if any Republicans join.
— Duffy pitches air traffic overhaul: Transportation Secretary Sean Duffy is calling on Congress to give his agency cash to modernize the nation’s aging air traffic control systems. The former House member is pressing lawmakers to take action quickly so his agency can execute the plan in roughly three to four years. Expect senators to discuss Duffy’s proposal when Commerce Chair Ted Cruz holds a hearing on aviation safety and air traffic control next week.
Jasper Goodman, Benjamin Guggenheim, Chris Marquette, Meredith Lee Hill, Sam Ogozalek, Oriana Pawlyk, Katherine Tully-McManus and Nicholas Wu contributed to this report.
