Republicans draw lines in the sand, putting Trump’s tax package at risk

WASHINGTON — As Republicans continue to hash out the details of President Donald Trump’s reconciliation bill, GOP leaders are facing a number of competing demands that could put the massive tax package in peril.

The budget reconciliation instructions give the House Ways and Means Committee $4.5 trillion to extend the tax cuts previously approved in Trump’s 2017 Tax Cuts and Jobs Act and make them permanent. To offset those costs, other committees must find at least $1.5 trillion in spending cuts elsewhere.

But finding those spending cuts is proving to be more difficult in practice than it is in theory — especially as factions of the House GOP conference come out with contradicting redlines.

“I agree that at any given moment in the process, members have to pursue as many savings as they possibly can. While it is challenging to fully address the enormity of our current deficit, we have to make progress,” Rep. Blake Moore, R-Utah, told the Deseret News. “Redlines are a unique feature to policymaking, and from my experience, they are mostly used as leverage, but most folks are willing to come to the table and negotiate.”

Medicaid

One of the biggest obstacles emerging in the reconciliation process is Medicaid. The Energy and Commerce Committee, which oversees the welfare program, is tasked with finding $880 billion in spending cuts that would likely need to include cuts to Medicaid funding to cover the lost tax revenue.

When one removes Medicare, Medicaid, or the Children’s Health Insurance Program from the equation, funding under the committee’s jurisdiction is only $381 billion.

Of that amount, more than half is already paid for by collection programs or user fees, according to The Washington Post, meaning that even if the committee slashed programs under the remaining $135 billion, it would still fall far below the $880 billion target.

However, some Republicans are refusing to vote for anything that would divert funds away from hospitals or patients. Rep. Don Bacon, R-Neb., for one, says he won’t vote for more than $500 billion in cuts to Medicaid — and even then, spending reductions would need to meet certain requirements.

For Bacon, those cuts can be found in policies related to implementing work requirements for able-bodied adults, auditing enrollments, and ensuring illegal immigrants are not covered, among other things.

“Those are the cuts that don’t impact quality of care nor hurt hospitals,” Bacon told the Deseret News. “A bunch of us will have to be convinced that any other cuts won’t hurt patients or hospitals.”

Other Republicans hold similar sentiments, with a dozen lawmakers sending a letter to GOP leadership last month threatening to withhold support from the massive tax reconciliation bill if the package includes substantial cuts to Medicaid for vulnerable populations.

“We support targeted reforms to improve program integrity, reduce improper payments, and modernize delivery systems to fix flaws in the program that divert resources away from children, seniors, individuals with disabilities, and pregnant women — those who the program was intended to help,” the lawmakers wrote, according to a copy of the letter obtained by the Deseret News. “However, we cannot and will not support a final reconciliation bill that includes any reduction in Medicaid coverage for vulnerable populations.”

SNAP assistance

Republicans have also been divided on how much to cut from federal food assistance such as the Supplemental Nutrition Assistance Program, or SNAP.

The Agriculture Committee needs to find $230 billion in spending cuts, with much of that expected to come from SNAP. GOP leaders are planning major changes to the low-income food assistance program, including a measure that would require states to pay for a portion of the benefits for the first time in the program’s history.

Republicans are considering a slew of other measures to cut costs, including work requirements for able-bodied adults with children 7 years old or older. It would also undo a number of Biden-era provisions such as certain waivers related to work requirements.

Centrist Republicans have been wary of cutting costs to the program, particularly those in deep red states with populations that depend on SNAP provisions.

Spending cut minimums

As a number of Republicans warn against cutting certain programs, there are lawmakers on the other side of the spectrum demanding even deeper spending cuts.

A group of 28 House Republicans sent a letter to party leadership on Wednesday pushing to adhere to the strict spending cuts put in the original budget instructions. If not, the lawmakers say, there must be a reduction in tax cuts.

“Under the House’s framework, the reconciliation bill must not add to the deficit,” the lawmakers wrote in the letter led by Budget Committee Vice Chair Lloyd Smucker, R-Pa. “The House reconciliation instructions are binding. They set a floor for savings, not a ceiling. We must hold that line on fiscal discipline to put the country back on a sustainable path.”

When Republicans drafted their first budget reconciliation resolution, they included an amendment to “adjust the dials” on tax cuts depending on how much government spending is cut.

For example, if committees are able to surpass the $1.5 trillion target in spending cuts, the amendment would increase the amount of money allocated to the Ways and Means Committee to extend the tax cuts.

However, if committees do not reach the $1.5 trillion floor, the tax cuts must “be lowered dollar-for-dollar to keep the reconciliation bill within the agreed limits,” according to the letter.

That could put Republican lawmakers on a collision course as they look to finalize details of the reconciliation package — and raises questions about where spending cuts can be found if too many redlines are drawn.

“We have to lead. If we lead, elections take care of themselves,” Rep. Chip Roy, R-Texas, who is calling for deep spending cuts in the reconciliation package, told the Deseret News. “We needn’t draw ‘red-lines’ but rather hammer out our disagreements to achieve a final product we can all rally around. Red lines will cause the product to crumble.”