House Republicans Block Trump’s Tax Bill Amid Budget Concerns

WASHINGTON, May 16 (Reuters) – Hardline Republicans in the U.S. House of Representatives blocked President Trump‘s tax bill on Friday due to concerns that it did not cut spending enough. This decision came just hours before Moody's downgraded the federal government’s credit rating.

Trump is urging Congress, which is controlled by Republicans, to extend the 2017 tax cuts—his key legislative victory. Analysts predict this extension could add trillions to the already staggering $36.2 trillion in federal debt. Moody’s warned that the debt burden could reach 134% of gross domestic product (GDP) by 2035, up from 98% in 2024, due to ongoing fiscal deficits.

The rejection of the tax bill by the Republican-controlled House Budget Committee represents a significant setback for Trump. Representative Jodey Arrington of Texas, the committee’s chairman, later scheduled a rare Sunday evening session to reconsider the bill.

Moody’s has noted that the U.S. fiscal situation is worsening compared to other developed nations. The committee voted down the bill despite Trump’s insistence on social media for Republicans to unite behind the proposal, calling out divisive members as “GRANDSTANDERS.”

Among those voting against the measure were five Republicans who demanded more drastic cuts to Medicaid and the repeal of green energy tax incentives introduced by Democrats. Representative Ralph Norman expressed his views, telling reporters, “This isn’t a grandstand. We’ll compromise somewhere, but just not giving the farm.”

The debate within the party highlights divisions between hardliners looking for deeper cuts and moderate members worried about losing elections in their swing districts. Arrington emphasized the need for the proposed legislation to fulfill the party’s promise to voters.

Despite the setback, Arrington expressed optimism that they may find a resolution soon, stating, “I am confident we will get to a good place this weekend and have the votes to pass it out of Committee Sunday evening.”

Republican Representatives Norman, Chip Roy, Andrew Clyde, Josh Brecheen, and Lloyd Smucker joined all 16 Democrats in opposing the bill. Roy criticized the bill, stating, “We are writing checks we cannot cash and our children are going to pay the price.”

Republicans are still negotiating and hope to make amendments to the bill over the weekend. The Congressional Budget Office has estimated that the tax cuts could cost $3.72 trillion over the next decade, but the House Budget Committee had confirmed it would not exceed a $4.5 trillion spending ceiling.

Democrats criticized the proposed legislation, arguing it disproportionately benefits the wealthy while potentially jeopardizing health coverage for millions as it suggests cuts to Medicaid and health programs. Representative Brendan Boyle declared, “No other previous bill caused so many millions of Americans to lose their healthcare.”

As the weekend approaches, the future of Trump’s tax bill appears uncertain, with both hardline Republicans and moderates weighing their next moves amid differing priorities.