tax cut

LINCOLN, Neb. — Rep. Mike Flood has gotten an earful during a public meeting in Lincoln aimed at discussing his support for the massive tax breaks and spending cuts bill that passed Congress and was signed into law by President Trump.

Flood, a second-term Republican who represents the GOP-leaning district that includes the University of Nebraska, on Monday braved the ire of a college town audience dominated by hundreds of people intent on expressing their displeasure chiefly with cuts to Medicaid benefits and tax reductions tilted toward the wealthy.

He described the law as less than perfect but stood firm on its Medicaid and tax provisions, fueling a 90-minute barrage of jeers and chants in a scenario House Republican leaders have specifically advised GOP members to avoid.

“More than anything I truly believe this bill protects Medicaid for the future,” Flood said, setting off a shower of boos from the audience of roughly 700 in the University of Nebraska’s Kimball Recital Hall. “We protected Medicaid.”

How voters receive the law, passed with no Democratic support in the narrowly GOP-controlled House and Senate, could go a long way to determine whether Republicans keep power in next year’s midterm elections.

Flood was resolute on his position but engaged with the audience at times. During his repeated discussions of Medicaid, he asked if people in the audience thought able-bodied Americans should be required to work. When many shouted their opposition, he replied, “I don’t think a majority of Nebraskans agree with that.”

Dozens formed a line to the microphone to speak to Flood, most asking pointed questions about the law, but many others questioning moves by the Trump administration on immigration enforcement, education spending and layoffs within the federal bureaucracy.

Some came prepared to confront him.

“You said in Seward you were not a fascist,” one man stood in line to say. “Your complicity suggests otherwise.”

Flood shot back, “Fascists don’t hold town halls with open question-and-answer sessions.”

Asked if he would block the release of files related to the sex trafficking case involving the late Jeffrey Epstein, Flood said he supports their release as a co-sponsor of a nonbinding resolution calling for their publication. Flood also said he supports requiring a deposition from Epstein’s convicted co-conspirator, Ghislaine Maxwell, who argues she was wrongfully prosecuted.

Flood’s audience was gathering more than an hour before the doors opened. And as people lined up in the warm August air, he sauntered by, introducing himself, shaking hands and thanking people, including retired Lincoln teacher and school administrator Mary Ells, for attending.

“I believe Congressman Flood listened in a socially appropriate way,” Ells said after expressing concerns to Flood about her grandchildren’s future. “I do not believe he listens in a responsive, action-oriented way for citizens in Nebraska that do not agree with the national playbook written elsewhere but being implemented here.”

Inside the hall, much of that decorum vanished.

During Flood’s discussion of his support of the law’s tax provisions, which he argued would benefit the middle class, the audience exploded in a deafening chant of “Tax the rich.”

Other refrains included “Vote him out!” and “Free Palestine!”

Hecklers often drowned out Flood, creating a rolling cacophony with only occasional pauses.

Republican lawmakers’ town halls have been few and far between since the bill passed early last month, in part because their leaders have advised them against it. Trump and others say the law will give the economy a jolt, but Democrats feel they’ve connected with criticism of many of its provisions, especially its cuts to Medicaid and tax cuts tilted toward the wealthy.

Flood later downplayed the confrontation as “spirited” but “part of the process” during an impromptu press conference.

“It doesn’t mean you can make everybody happy,” he said. “But, you know, if you feel strongly about what you’re doing in Congress, stand in the town square, tell them why you voted that way, listen to their questions, treat them with respect and invite them to continue to communicate.”

Unlike dozens of other Republicans in competitive districts, Flood hardly has to worry, as Republicans brace for a challenge to their razor-thin majority in the House next year. Elected in 2022, Flood was reelected to the seat last year by winning 60% of the vote in a district that includes Lincoln in Democratic-leaning Lancaster County but also vast Republican-heavy rural tracts in 11 counties that ring the Omaha metropolitan area.

Beaumont writes for the Associated Press.

WASHINGTON — By a single, tiebreaking vote, Senate Republicans on Tuesday approved President Trump’s signature legislation despite several GOP defections, a major step toward passage of a bill that would expand tax cuts while cutting healthcare access to millions.

Just 50 Republicans supported the legislation, forcing Vice President JD Vance to cast the tiebreaking vote.

GOP Sens. Rand Paul of Kentucky, Thom Tillis of North Carolina and Susan Collins of Maine joined all Democrats in the chamber in opposition to the bill.

The legislation, called the “One Big Beautiful Bill Act,” passed with the support of a key skeptic of its most controversial provisions: Republican Sen. Lisa Murkowski of Alaska. The bill extends tax cuts and benefits first passed in 2017 under Trump that were set to expire later this year, while creating new eligibility requirements for Medicaid and food stamps.

The House of Representatives will now have a second vote on a reconciled version of the bill. Should it pass, it will go to the president’s desk for his signature.

WASHINGTON — President Trump wants his “big, beautiful” bill of tax breaks and spending cuts on his desk to be signed into law by the Fourth of July, and he’s pushing the slow-rolling Senate to make it happen sooner rather than later.

Trump met with Senate Majority Leader John Thune at the White House early this week and has been dialing senators for one-on-one chats, using both the carrot and stick to nudge, badger and encourage them to act. But it’s still a long road ahead for the 1,000-page-plus package.

“His question to me was, How do you think the bill’s going to go in the Senate?” Sen. Josh Hawley (R-Mo.) said about his call with Trump. “Do you think there’s going to be problems?”

It’s a potentially tumultuous three-week sprint for senators preparing to put their own imprint on the massive Republican package that cleared the House late last month by a single vote. The senators have been meeting for weeks behind closed doors, including as they returned to Washington late Monday, to revise the package ahead of what is expected to be a similarly narrow vote in the Senate.

“Passing THE ONE, BIG, BEAUTIFUL BILL is a Historic Opportunity to turn our Country around,” Trump posted on social media. He urged them Monday “to work as fast as they can to get this Bill to MY DESK before the Fourth of JULY.”

Thune, like House Speaker Mike Johnson, has few votes to spare from the Senate’s slim, 53-seat GOP majority. Democrats are waging an all-out political assault on GOP proposals to cut Medicaid, food stamps and green energy investments to help pay for more than $4.5 trillion in tax cuts — with many lawmakers being hammered at boisterous town halls back home.

“It’d be nice if we could have everybody on board to do it, but, you know, individual members are going to stake out their positions,” Thune said Tuesday.

“But in the end, we have to succeed. Failure’s not an option. We’ve got to get to 51. So we’ll figure out the path forward to do that over the next couple of weeks.”

At its core, the package seeks to extend the tax cuts approved in 2017, during Trump’s first term at the White House, and add new ones the president campaigned on, including no taxes on tips and others. It also includes a massive build-up of $350 billion for border security, deportations and national security.

To defray the lost tax revenue to the government and avoid piling onto the nation’s $36-trillion debt load, Republicans want to reduce federal spending by imposing work requirements for some Americans who rely on government safety net services. Estimates are 8.6 million people would no longer have healthcare and nearly 4 million would lose Supplemental Nutritional Assistance Program benefits.

The package also would raise the nation’s debt limit by $4 trillion to allow more borrowing to pay the bills.

Senate Democratic Leader Chuck Schumer said Trump’s bill “is ugly to its very core.”

Schumer said Tuesday it’s a “lie” that the cuts won’t hurt Americans. “Behind the smoke and mirrors lies a cruel and draconian truth: tax breaks for the ultra-wealthy paid for by gutting healthcare for millions of Americans,” said the New York senator.

The nonpartisan Congressional Budget Office is expected to soon provide an overall analysis of the package’s impacts on the government balance sheets, particular its rising annual deficits. But Republicans are ready to blast those findings from the congressional scorekeeper as flawed.

Trump on Tuesday switched to tougher tactics, deriding the holdout Republican senators to get on board.

The president laid into Kentucky Sen. Rand Paul, the libertarian-leaning deficit hawk who has made a career of arguing against government spending. Paul wants the package’s $4-trillion increase to the debt ceiling out of the bill.

“Rand votes NO on everything, but never has any practical or constructive ideas. His ideas are actually crazy (losers!).” Trump posted.

The July 4 deadline is not only aspirational for the president, it’s all but mandatory for his Treasury Department. Treasury Secretary Scott Bessent has warned Congress that the nation will run out of money to pay its bills if the debt ceiling, now at $36 trillion, is not lifted by mid-July or early August to allow more borrowing. Bessent has also been meeting behind closed doors with senators and GOP leadership.

Thune acknowledged Tuesday that lifting the debt ceiling is not up for debate.

“It’s got to be done,” the South Dakota senator said.

The road ahead is also a test for Thune, who, like Johnson, is a newer leader in Congress and among the many Republicans adjusting their own priorities with Trump’s return to the White House.

While Johnson has warned against massive changes to the package, Thune faces demands from his senators for adjustments.

To make most of the tax cuts permanent — particularly the business tax breaks that are the Senate priorities — senators may shave some of Trump’s proposed new tax breaks on automobile loans or overtime pay, which are policies less prized by some senators.

There are also discussions about altering the $40,000 cap that the House proposed for state and local deductions, known as SALT, which are important to lawmakers in high-tax New York, California and other states, but less so among GOP senators.

“We’re having all those discussions,” said Sen. Thom Tillis (R-N.C.), another key voice in the debate.

Hawley is among a group of senators, including Maine’s Susan Collins and Alaska’s Lisa Murkowski, who have raised concerns about the Medicaid changes that could boot people from health insurance.

A potential copay of up to $35 for Medicaid services that was part of the House package, as well as a termination of a provider tax that many states rely on to help fund rural hospitals, have also raised concerns.

“The best way to not be accused of cutting Medicaid is to not cut Medicaid,” Hawley said.

Collins said she is reviewing the details.

There’s also a House provision that would allow the auction of spectrum bandwidth that some senators oppose.

Mascaro and Jalonick write for the Associated Press. AP writer Matt Brown contributed to this report.

WASHINGTON — In a massive setback, House Republicans failed Friday to push their big package of tax breaks and spending cuts through the Budget Committee, as a handful of conservatives joined all Democrats in a stunning vote against it.

The hard-right lawmakers are insisting on steeper spending cuts to Medicaid and the Biden-era green energy tax breaks, among other changes, before they will give their support to President Trump’s “big beautiful bill.” They warn the tax cuts alone would pile onto the nation’s $36-trillion debt.

The failed vote, 16-21, stalls, for now, House Speaker Mike Johnson’s push to have the package approved next week. But the holdout lawmakers vowed to stay all weekend to negotiate changes as the president is returning to Washington from the Middle East.

“Something needs to change or you’re not going to get my support,” said Rep. Chip Roy (R-Texas).

Tallying a whopping 1,116 pages, the One Big Beautiful Bill Act, named with a nod to Trump, is teetering at a critical moment. Conservatives are holding out for steeper cuts to Medicaid and other programs to help offset the costs of the tax breaks. But at the same time, lawmakers from high-tax states including New York and California are demanding a deeper tax deduction, known as SALT, for their constituents.

Johnson has insisted Republicans are on track to pass the bill, which he believes will inject a dose of stability into a wavering economy.

Democrats slammed the package, but they will be powerless to stop it if Republicans are united. They emphasized that millions of people would lose their health coverage if the bill passes while the wealthiest Americans would reap enormous tax cuts. They also said it would increase future deficits.

“That is bad economics. It is unconscionable,” said Rep. Brendan Boyle of Pennsylvania, the top Democratic lawmaker on the panel.

The Budget panel is one of the final stops before the package is sent to the full House floor for a vote, which is expected as soon as next week. Typically, the job of the Budget Committee is more administrative as it compiles the work of 11 committees that drew up various parts of the big bill.

But Friday’s meeting proved momentous. Republicans hold a slim majority in the House and have just a few votes to spare to advance the measure, including on the Budget Committee.

Four Republican conservatives initially voted against the package — Roy and Reps. Ralph Norman of South Carolina, Josh Brecheen of Oklahoma and Andrew Clyde of Georgia. Then one, Rep. Lloyd Smucker of Pennsylvania, switched his vote to no.

The conservative holdouts from the Freedom Caucus are insisting on deeper cuts — particularly to Medicaid. They want new work requirements for aid recipients to start immediately, rather than on Jan. 1, 2029, as the package proposes.

Roy complained that the legislation front-loads new tax cuts and spending while back-loading the savings.

“We are writing checks we cannot cash, and our children are going to pay the price,” Roy said.

“Sadly,” added Norman, “I’m a hard no until we get this ironed out.”

At the same time, the New Yorkers have been unrelenting in their demand for a much larger SALT deduction than what is proposed in the bill, which could send the overall cost of the package skyrocketing.

As it stands, the bill proposes tripling what’s currently a $10,000 cap on the state and local tax deduction, increasing it to $30,000 for joint filers with incomes up to $400,000 a year.

Rep. Nick LaLota, one of the New York lawmakers leading the SALT effort, said they have proposed a deduction of $62,000 for single filers and $124,000 for joint filers.

The conservatives and the New Yorkers are at odds, each jockeying for their priorities as Johnson labors to keep the package on track to pass the House by Memorial Day and then onto the Senate.

“This is always what happens when you have a big bill like this,” said Majority Leader Steve Scalise (R-La.). “There’s always final details to work out all the way up until the last minute. So we’re going to keep working. There’s a lot of work to be done.”

At its core, the sprawling package extends the existing income tax cuts that were approved during Trump’s first term, in 2017, and adds new ones that the president campaigned on in 2024, including no taxes on tips, overtime pay and some auto loans.

It increases some tax breaks for middle-income earners, including a bolstered standard deduction of $32,000 for joint filers and a temporary $500 boost to the child tax credit, bringing it to $2,500.

It also provides an infusion of $350 billion for Trump’s deportation agenda and to bolster the Pentagon.

To offset more than $5 million in lost revenue, the package proposes rolling back other tax breaks, namely the green energy tax credits approved as part of President Biden’s Inflation Reduction Act. Some conservatives want those to end immediately.

The package also seeks to cover the costs by slashing more than $1 trillion from healthcare and food assistance programs over the course of a decade, in part by imposing work requirements on able-bodied adults.

Certain Medicaid recipients would need to engage in 80 hours a month of work or other community options to receive healthcare. Older Americans receiving food aid through the Supplemental Nutrition Assistance Program, known as SNAP, would also see the program’s current work requirement for able-bodied participants without dependents extended to include those ages 55-64. States would also be required to shoulder a greater share of the program’s cost.

The nonpartisan Congressional Budget Office estimates at least 7.6 million fewer people with health insurance and about 3 million a month fewer SNAP recipients with the changes.

Mocking the name of the bill, Rep. Pramila Jayapal (D-Wash.) called it “one big, beautiful betrayal.”

“To pay for it,” Democratic Rep. Morgan McGarvey said, “kids in Kentucky will go hungry, nursing homes and hospitals will close, and millions of Americans will be kicked off their health insurance. It’s wrong.”

Mascaro and Freking write for the Associated Press. AP writer Leah Askarinam contributed to this report.

If you voted for Donald Trump last November because you believed he’d increase economic freedom, it’s safe to say you were fooled. Following a reckless tariff barrage, the White House and its allies are preparing a new wave of tax-code gimmickry that has more in common with progressive social engineering than pro-growth reform. And don’t forget a fiscal recklessness that mirrors the mistakes of the left.

Defend these policies if you like, but let’s be clear: The administration shows no coherent commitment to free-market principles and is in fact actively undermining them. Its approach is better described as central planning disguised as economic nationalism.

This week’s example is an executive-order attempt at prescription-drug price control, similar to Democrats’ past proposals. If implemented it would inevitably reduce pharmaceutical R&D and innovation.

Tariffs remain the administration’s most visible economic sin after Trump launched the most extreme escalation of protectionism since the infamous Smoot-Hawley Act of 1930. Unlike the 1930s, however, today’s economy is deeply integrated with global supply chains, making the damage extensive and far more immediate. Tariffs are only nominally imposed on imports. Ultimately, they’re taxes on American consumers, workers and businesses.

The president has made it clear that he’s fine with limiting consumer choice, blithely telling parents they might have to “settle” for two dolls instead of 30 for their children. Smug pronouncements about how much we should shop (not much) or which sectors we should work in (manufacturing) are economic authoritarianism.

They’re also indicative of a deeper government rot. Policymaking is now done by executive orders as comatose congressional Republicans, like some Biden-era Democrats, allow the president to rule as if he’s a monarch.

A full-throated, assertive Congress would remind any president that manufacturing jobs were mostly lost to technologies that also create jobs and opportunity in members’ districts. Prosperity increases only through innovation and competition and isn’t restored by dragging people backward into lower-productivity jobs.

Now, even Trump’s tax agenda — once considered a bright spot by many free-market advocates — is being corrupted. Instead of championing the broad-based, pro-growth reforms we’d hoped for, the administration is doubling down on gimmickry: exempting tips and overtime pay, expanding child tax credits and entertaining the idea of raising top marginal tax rates.

These moves might poll well, but they’re unprincipled and unproductive. They undermine the 2017 Tax Cuts and Jobs Act, which aimed (however imperfectly) to simplify the code and incentivize growth, and not to micromanage worker and household behavior through the Internal Revenue Service.

And then there are the administration’s misleading, populist talking points about raising taxes on the rich to reduce taxes on lower- and middle-income workers. The U.S. income-tax system is already one of the most progressive in the developed world. According to the latest IRS data, the top 1% of earners pay more in federal income taxes than the bottom 90% combined. These high earners provide 40% of federal income-tax revenue; the bottom half of earners make up only 3% of that revenue. Thankfully, the House of Representatives steered away from that mistake in its bill.

Meanwhile, some Republican legislators are pushing to extend the 2017 tax cuts without meaningful offsets, setting the stage for a debt-fueled disaster. As noted by Scott Hodge, formerly the longtime president of the Tax Foundation, the GOP’s proposed cuts could add more than $5.8 trillion to the debt over a decade. That’s nearly three times the cost of the 2021 American Rescue Plan, which many Republicans rightly criticized for fueling inflation and fiscal instability.

To be clear: Pro-growth tax reform is essential. But not every tax cut is pro-growth, and no tax cut justifies further fiscal deterioration. Extending the 2017 cuts, which I generally support, shouldn’t be confused with true tax reform.

Some of the provisions being floated — expanded credits, exclusions for tips and overtime, rolling back the state and local tax (SALT) deduction cap — are not growth policies. They are wealth redistribution run through the tax code, indistinguishable in substance from the kind of demand-side, Keynesian stimulus Republicans once decried.

Hodge notes that these measures would do more to mimic the American Rescue Plan than to reverse its pricey mistakes. And with the Federal Reserve still fighting inflation, adding trillions in unfunded liabilities to the national ledger is profoundly irresponsible.

None of this should surprise anyone paying attention. This administration is packed with advisors and surrogates who glorify union power, rail against globalization and scoff at the very idea of limited government. Some sound more like Bernie Sanders than Milton Friedman. Whether it’s directing industrial policy or distorting the tax code to reward their favorite behaviors, they are hostile to the competition and liberty of the free market.

Sadly, that hostility has real consequences: higher prices, greater economic uncertainty, sluggish investment and fewer opportunities for middle- and lower-class families.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University. This article was produced in collaboration with Creators Syndicate.