By Siobhan Hughes

WASHINGTON -- House Republican leaders dead set on passing President Trump's agenda of tax cuts and spending reductions this week face difficult trade-offs in closing the deal among members of their fractious conference.

Trump, who has urged lawmakers to get on board, is planning to meet House Republicans on Tuesday on Capitol Hill, according to people familiar with the matter. The House Rules Committee is planning to meet shortly after midnight Wednesday morning to try to then send the package to the House floor.

Holdouts allowed the mammoth bill to advance through a key committee Sunday night after GOP spending hawks reached behind-the-scenes agreements with Republican leaders to reduce subsidies for clean energy and accelerate the date when work requirements for Medicaid beneficiaries will take hold. Nothing was set in stone, and the legislation's fate hinged on how leaders balance concessions to the right flank of their party with their more moderate members.

"There's a lot more work to do," House Speaker Mike Johnson (R., La.) told reporters after the House committee cleared the package. "We've always acknowledged that towards the end, there will be more details to iron out."

The late wrangling ahead of a self-imposed Memorial Day deadline pits lawmakers who want larger, faster reductions to federal spending against colleagues concerned with protecting Medicaid against deeper cuts. Another bloc of blue-state Republicans is fighting to further raise the cap on the state and local tax deduction, which has been given a proposed boost to $30,000 from the current $10,000.

The hard-line House Freedom Caucus said progress has been made on the bill but "it doesn't yet meet the moment." The group said the current measure "fails to actually honor our promise to significantly correct the spending trajectory of the federal government."

Early Monday, House Republican leadership aides said that disagreements remained over three major issues: cutting clean-energy tax breaks; lifting the SALT cap; and how quickly to start new work requirements for people receiving Medicaid, the federal-state program that provides health insurance to 70 million low-income or disabled Americans.

"Everything is on the table right now," one House GOP leadership aide told reporters Monday. GOP lawmakers are "continually giving us feedback about what changes need to be made."

Republicans control the House by a 220-213 majority, meaning they can afford few defections with all Democrats opposed.

Rep. Andy Harris (R., Md.), a member of the Freedom Caucus, said on Steve Bannon's War Room show that passage of the bill "is not 100% guaranteed. It's far from it." Citing the recent downgrade of U.S. debt by Moody's Ratings on Friday, Harris said "the bottom line is if we don't get significant spending reduction...this bill is not going anywhere this week."

The overall package is aimed at extending and passing Trump's 2017 tax cuts, which are due to expire at the end of this year unless Congress acts. The House plan would mean nearly $4 trillion less in tax revenue than if Congress simply let the Tax Cuts and Jobs Act lapse. To help cover some of the cost, the package would also reduce spending on Medicaid and nutrition assistance. Projected budget deficits would still increase by nearly $3 trillion through 2034 -- a point of contention for the most single-minded fiscal conservatives.

White House press secretary Karoline Leavitt urged Republicans in the House and Senate to unite in supporting the measure and called it the "single most pro-small business, pro-family, and pro-American worker legislation ever" during a Monday morning press briefing.

On state and local income taxes, House leadership aides said that discussions were also still focusing on adjustments to the provision capping the deduction for state and local taxes at $30,000, with that number shrinking when income reaches $400,000. They also said that they were working to adjust the dates for phasing out some clean-energy subsidies contained in former President Joe Biden's signature 2022 Inflation Reduction Act, but they indicated that the issue remained unsettled.

Republicans were all over the map on when to begin requiring most able-bodied adults younger than 65 and without dependents to work in order to to be covered by Medicaid. The original proposal called for imposing the mandate starting in 2029 -- after Trump left office. Some conservatives said the delay meant future Congresses could undo that requirement, meaning no savings. They also floated changes to the funding formula known as FMAP, to allow the federal government to contribute less to the program.

When asked if Trump agrees that Medicaid work requirements should be implemented as soon as 2026, Leavitt said Medicaid benefits should be going to people who physically can't work.

"We want to see able-bodied Americans at least working 20 hours a week whether it's part-time or full-time, whether it's even looking for work or volunteering for 20 hours a week if they are receiving Medicaid, these are common-sense provisions," she said.

Write to Siobhan Hughes at Siobhan.hughes@wsj.com

(END) Dow Jones Newswires

May 19, 2025 19:01 ET (23:01 GMT)

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