By the end of this month, House Republicans hope to finalize the details of President Trump's "big beautiful bill" that includes sweeping changes to tax, immigration and energy policy. House Speaker Mike Johnson, R-La., has already muscled a budget blueprint for the plan through the chamber. But this week poses a much thornier task, as three key House committees are putting pen to paper defining policies that will have far-reaching impacts on Americans' pocketbooks and for many, their healthcare.
Johnson is balancing demands between two competing camps inside his conference. Swing district Republicans are worried dramatic cuts to safety net programs and popular tax incentives could endanger their reelection prospects. More conservative members are arguing voters put a GOP trifecta in place to slash the deficit and restructure government programs.
"I think the final product is going to be favorable to everybody," Johnson predicted last week.
The fiscal equation Republicans are trying to solve is how to reach the $1.5 trillion in spending cuts called for in their blueprint to offset the cost of extending President Trump's 2017 tax cuts. A large chunk of the GOP conference views the real target as $2 trillion in savings.
Last week, Texas Republican Chip Roy told reporters there were still roughly "20 plus issues" that need to be resolved. Johnson wants to get the bill through the House and to the Senate by Memorial Day, with the goal of having it to President Trump for his signature by July 4.
But the real deadline for Republicans is mid-July. That's when Treasury Secretary Scott Bessent says Congress needs to increase the country's borrowing authority to avoid a potentially catastrophic government default. GOP leaders plan to increase the debt ceiling for five years in this package.
That time frame will be put to the test as Republicans try to resolve the most contentious and wide-reaching policies in the coming days. Here is a brief look at some of the key sticking points.
Medicaid
Republicans are considering a range of structural changes to the joint federal/state healthcare program that covers roughly 72 million low-income, elderly and disabled Americans. The House Energy and Commerce Committee, which oversees the program, released their planned changes late Sunday and have zeroed in on a handful of reforms that are broadly supported among both conservative and moderate GOP lawmakers.
They've committed to adding work requirements for "able-bodied" adults who receive benefits, requiring those enrolled to report working at least 80 hours a month. They also outlined changes to parts of the enrollment process and placed restrictions on states' ability to raise taxes on healthcare providers, a practice that in turn attracts more federal matching dollars. The bill also references an overarching goal of eliminating "waste, fraud and abuse" within the program.
Missing from the committee's proposal are drastic changes to how the government pays for the Medicaid expansion that increased eligibility for lower-income childless, working-age adults as part of the Affordable Care Act. Conservative hardliners had pushed for a decrease in federal contributions to states with this expanded coverage. The plan also does not include the per person cap on federal spending that some lawmakers had called for.
Talks are continuing this week and it's unclear how proposed changes will play among a divided House GOP that needs nearly total unity to get the eventual spending bill passed. The proposed changes to Medicaid are expected to reap at least $715 billion in savings, along with another $197 billion from additional changes unrelated to Medicaid, according to an estimate by the nonpartisan Congressional Budget Office. As a result of these changes, the CBO also found that at least 8.6 million people would lose their health insurance in the next 10 years.
Extending Trump's tax cuts
Republicans propose making the 2017 Trump tax cuts that will expire at the end of 2025 permanent. In their full plan released Monday, the House Committee on Ways and Means added new tax breaks that the president campaigned on in 2024 — including no taxes on tips or overtime pay. But if Republicans can't hit $1.5 trillion in spending cuts to offset the costs of tax cuts, they will be forced to scale back their ambitions.
One potential revenue source that's absent from the plan are any new income taxes on high earners. President Trump had floated allowing the tax bracket for high earners — those making between $2.4 million and $5 million — to go from 37% to 39.6%. But on Friday he pulled back from that, writing on social media that although he backed the "TINY" change, Democrats would use it as a campaign issue against Republicans. "Republicans should probably not do it, but I'm OK if they do!!!" Trump said.
Johnson and other top GOP leaders are on the record opposing raising taxes.
The plan released by the Ways and Means committee would also establish a new type of trust called a "MAGA account," which stands for "money account for growth and advancement." Based on the text of the bill, it appears to be a tax-exempt trust created by the federal government for younger Americans. Up to $5,000 can go into the accounts annually and beneficiaries can use the funds to pay for higher education, a small business and their first home. It terminates when the beneficiary turns 31.
SALT
One of the most contentious issues remaining in budget talks is also one of its most obscure: the state and local tax deduction, or SALT.
The 2017 tax bill capped the amount that taxpayers in several (mostly blue states) can deduct for state and local taxes at $10,000 per year. During his 2024 reelection campaign, Trump vowed to get rid of the cap, but doing so would add significant costs to the GOP package and most Senate Republicans don't support scrapping the cap.
The fight over SALT is expected to be a major sticking point when the Ways and Means committee begins its markup of the bill on Tuesday. The committee has proposed lifting the cap on SALT to $30,000. However, a handful of GOP lawmakers representing districts in states like New York, New Jersey and California with high local property taxes are leading the push for a higher cap. They insist the bill must include a provision with a number north of $30,000.
Rep. Nick LaLota, R-N.Y., has been a staunch advocate for a higher deduction as part of the bill. He told reporters last week that discussions have "a lot more to go now," but ultimately he thinks Republicans will reach a deal. The issue is a red line for him and at least four other colleagues. And with Republicans clinging to a razor-thin majority in the House, their opposition could sink the bill.
"There is no bill unless there's a fix on SALT," LaLota said. "The five of us will vote no on a bill unless there's a fix on SALT."
Federal food assistance
Republicans are also discussing plans to shift some of the costs of the Supplemental Nutrition Assistance Program (SNAP) to the states, which is expected to result in major cuts in the numbers of people who currently receive the benefits. Some Republicans who represent swing districts are cautioning that they want to ensure no cuts in benefits result from any changes to the program.
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