Trump’s Major Tax Cut Bill Clears Key Vote in US House Committee

Former U.S. President Donald Trump’s comprehensive tax-cut bill has secured approval from a crucial congressional committee, moving it closer to a potential vote in the House of Representatives later this week. The bill’s passage in a rare Sunday night vote is considered a significant victory for Trump and House Speaker Mike Johnson, especially after facing setbacks earlier when hardline Republican conservatives blocked the bill from passing the House Budget Committee on Friday. The blockage was due to disagreements over proposed spending cuts to the Medicaid healthcare program for low-income Americans and the repeal of green energy tax credits.

Despite these disagreements, four hardline Republicans out of the committee’s 21 members voted “present,” allowing the bill to advance by a narrow margin of 17-16, with all Democrats voting against it. Much of the day was spent behind closed doors with intense negotiations between hardliners, House Republican leaders, and White House officials to reach a compromise. Johnson described the agreed-upon changes as “just some minor modifications,” downplaying the significance of the adjustments. Republican House Budget Chairman Jodey Arrington anticipates that discussions will continue throughout the week until the bill is formally presented to the full House.

Nonpartisan analysts have expressed concerns about the financial impact of the bill. It proposes extending the 2017 tax cuts that were a signature legislative achievement of Trump’s first term. However, these extensions are projected to add between $3 trillion and $5 trillion to the national debt, which currently stands at approximately $36.2 trillion. Moody’s credit ratings agency cited this escalating debt, which is expected to reach 134 percent of the U.S. gross domestic product (GDP) by 2035, as a key factor in its recent decision to downgrade the U.S. credit rating.

In response, U.S. Treasury Secretary Scott Bessent told CNN that the bill would stimulate economic growth sufficiently to offset the increase in debt. He also expressed skepticism about Moody’s downgrade, suggesting it may not fully reflect the economic realities. Nonetheless, economic experts warn that this downgrade—following earlier ones by Fitch Ratings and Standard & Poor’s (S&P)—signals that the U.S. has excessive debt levels and that lawmakers need to either raise revenues or reduce spending to restore fiscal balance.

The Republican majority in the House is slim, with a 220-213 margin, and the party is divided over the depth of spending cuts required to offset the cost of the tax reductions. Hardliners advocate for cuts to Medicaid, a move opposed by some Republican senators who argue that such reductions would harm the very voters who supported Trump in the 2024 election and whose backing will be crucial in the 2026 congressional elections.

If enacted, the bill’s Medicaid cuts would remove coverage from approximately 8.6 million people. Additionally, it aims to eliminate taxes on tips and certain overtime income—both promises from Trump’s campaign—while increasing defense spending and allocating more funds toward border enforcement measures.

Democratic Senator Chris Murphy of Connecticut criticized the credit rating downgrade, warning it signals serious trouble for Americans. He told NBC’s Meet the Press that the downgrade suggests the country is likely headed toward a recession and accused lawmakers of managing the economy recklessly.

In summary, while Trump’s tax-cut bill marks a legislative win for the former president and his allies, it faces deep divisions within the Republican Party and strong opposition from Democrats. The bill’s potential to increase the national debt significantly has sparked concern from credit agencies and economic experts, raising questions about the long-term fiscal health of the United States. As negotiations continue, the balance between tax relief, spending cuts, and economic growth remains a contentious and critical issue for lawmakers.