By David Morgan
WASHINGTON (Reuters) – Republicans who control the U.S. House of Representatives are trying to overcome internal differences over how to finance President Donald Trump’s sweeping tax cuts. Conservative hardliners are determined to cut the nearly $2 trillion annual federal deficit.
With a narrow 218-215 majority in the House of Representatives, they need near total unity as they prepare to vote within weeks on a fiscal 2025 budget resolution that would be a crucial step toward passing Trump’s sweeping agenda of tax cuts, border and Immigration reform and energy deregulation will be and increased military spending.
Ahead of a three-day political retreat that begins Monday in Miami, some openly worried that House Speaker Mike Johnson’s leadership team might balk at the necessary spending cuts to offset the cost of Trump’s $6 trillion Balance tax cut program while addressing the country’s problems with more than $36 trillion in debt.
Republicans have vowed to extend Trump’s tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA), which are set to expire at the end of this year. The bipartisan Committee for a Responsible Federal Budget estimates this would cost more than $4 trillion over 10 years, while Trump’s campaign promise to eliminate taxes on tips, overtime and Social Security benefits could cost another $1.8 trillion .
Failure to reach a deal could scuttle Republican lawmakers’ plan to pass Trump’s agenda by the end of May by using a maneuver to bypass Senate Democrats that would require nearly the entire divided majority to agree.
“Most of us support the TCJA. I don’t think that’s the problem. We all want to support what President Trump is doing. But we also recognize the need to get our fiscal house in order,” said Rep. Michael Cloud, a member of the hardline House Freedom Caucus.
“We need a course correction and it needs to be dramatic,” he told Reuters.
Johnson said he hopes to complete parts of a single comprehensive legislative package to fund Trump’s priorities. Republicans must also decide whether to include raising the federal government’s debt limit – something Congress must do later this year to prevent a devastating default – and disaster relief for Los Angeles communities devastated by wildfires.
“There are a number of ideas on the table,” Johnson told reporters before lawmakers left Washington last week, saying his group was aiming to reach an agreement in Miami.
Hakeem Jeffries, the Democratic leader in the House of Representatives, described the Republican plans as “a contract against America.” He warned: “It will hurt working families, it will hurt the middle class, it will hurt our children, it will hurt our seniors and it will hurt our veterans.”
Jeffries also said the Republican agenda would undermine the Medicaid health program for the poor as well as federally subsidized health care for uninsured workers under the Affordable Care Act.
COST OF THE TRUMP AGENDA
Republicans say they face a significant challenge in finding enough spending cuts to cover the costs of the Trump agenda and privately worry that hardliners’ insistence on significant deficit reduction could harm their voters by reducing Medicaid coverage. Cut funding for hospitals and spending on other community services.
“This thing cannot be deficit neutral,” said Republican Rep. Ralph Norman, adding that the package must reduce the deficit “by a large number.”
Another potential obstacle: The rising U.S. deficit is weighing on the bond market and driving up the country’s borrowing costs. A significant increase in the deficit could exacerbate these concerns.
“This is an equal body corporate.”
The debate will determine which is stronger – Trump’s demands or the hardliners’ willingness to stick to a traditional Republican goal of deficit reduction.
“The president has been very clear about what he wants. The question now is what do we want? This is an equal body…We are supposed to have different opinions. If we don’t do that, we’re in trouble because.” “We’re no longer a constitutional republic,” said Rep. Richard McCormick (NYSE:).
The House Budget Committee has circulated a 50-page list of trillion-dollar proposals, ranging from broadly party-supported ideas like repealing green energy tax credits to controversial proposals like the federal home mortgage interest deduction .
Trump’s proposal to raise $1.9 trillion from a 10 percent tariff on imported goods is also facing opposition from conservatives in the House and Senate.
“I am not in favor of raising taxes. Tariffs are simply a tax,” said Republican Senator Rand Paul, a leading fiscal hawk.
Even as Republicans try to move toward a deal, Rep. Tim Burchett said he is concerned that up to $200 billion in proposed additional funding for the Pentagon could absorb savings he would prefer to use to address the deficit . But he forgot to say that such an outcome would lead him to oppose the package.
“If I see that we’re trending in the right direction, that might be enough,” Burchett said. “But we lie to ourselves and we lie to the public. We go home and say we’re going to do these things. And then we come here, wink and nod and sell people The River. And we go home and get re-elected. It’s a crazy system.
