Three key House committees advanced a sweeping tax package on Wednesday, taking a crucial step toward enacting what former President Donald Trump has dubbed the “big beautiful bill.”
- The legislation would make Trump’s 2017 tax cuts permanent while introducing new provisions to exempt tip income and overtime pay from federal taxation—two core promises of his 2024 campaign platform.
- Cracks within the party are already threatening to complicate efforts to pass the full measure through the House by the end of next week.
On the Senate side, Republican Senators Rand Paul (KY) and Ron Johnson (WI) have sharply criticized the bill’s fiscal impact. Both have warned they will not support legislation they view as fiscally reckless.
- Their concerns were echoed by the nonpartisan Committee for a Responsible Federal Budget, which estimated the legislation would increase federal deficits by $3.8 trillion through 2034.
Working Class: Further complicating matters, Senator Josh Hawley (MO) has raised objections to proposed changes in Medicaid, calling the plan “taxing the poor to give to the rich.” His opposition signals that the bill’s path in the Senate could be even more fraught than in the House.
- Hawley said “No Republican should support that. We’re the party of the working class. We need to act like it.”
Majority Vote: The package, part of a broader effort to rally the party behind Trump’s economic vision ahead of the November election, is being advanced under the fast-track budget reconciliation process. This allows the bill to bypass a Senate filibuster and pass with a simple majority. But even with that advantage, intraparty dissent poses a real challenge.
Bottom Line: The tax cuts could provide a stimulus to the slowing economy, but adding more debt when we already facing historic budget deficits could continue to keep interest rates higher.
