GOP charges ahead despite deep divisions on Medicaid, SALT

House Republicans are charging ahead with deep Medicaid cuts and an extension of the 2017 tax cuts, two policies at the heart of President Trump’s domestic agenda that are showcasing fierce divisions within the GOP conference.

Both policy issues pit GOP moderates against conservatives, and threaten to delay action on the massive budget reconciliation package they’re hoping to get to Trump’s desk before August.

The divisions were hardly resolved in recent days when the House Ways and Means Committee introduced the details of its proposed tax-code changes, and the House Energy and Commerce Committee unveiled its designs for Medicaid cuts.

The tax proposal would hike the cap on the state and local tax (SALT) tax deduction — one of the most contentious parts of the entire sprawling package — from $10,000 to $30,000 for those earning less than $400,000. For wealthier households, the cap is gradually reduced according to income.

That proposal was rejected last week by moderate Republicans in high-income states, who are demanding the cap go much higher. It is far lower than the proposal key lawmakers floated earlier in the day: $62,000 for single filers and $124,000 for joint filers.

Those stakeholders were quick to reject the panel’s proposition, leaving onlookers to wonder how GOP leaders intend to bring them on board.

“Still a hell no,” Rep. Nick LaLota (R-N.Y.), one of the most vocal supporters of increasing the SALT deduction cap, wrote on the social platform X shortly after the panel unveiled its portion of the bill.

Rep. Mike Lawler (R-N.Y.), another key advocate for raising the SALT cap, delivered a similar warning.

"I've been very clear from the very beginning, if there was not a fix for SALT in the bill I would be a no. This proposal by the Ways and Means Committee and the Ways and Means Chairman does not address the issue," he told The Hill on NewsNation.

In a statement, he said, “I look forward to continuing to negotiate with leadership and the administration to provide real tax relief for my constituents.”

The details of the Energy and Commerce bill have been no less controversial. While the proposal would reduce Medicaid spending by hundreds of billions of dollars, it does so largely by establishing stricter work requirements for adults under the program rather than adopting structural changes, like shifting more of the cost burden from Washington to the states. 

The strategy appeared to be designed to win over moderate Republicans facing tough reelection contests, particularly those with a high Medicaid populations in their districts. But the absence of the structural changes sparked immediate howls from conservative spending hawks who want to cut much more deeply into the federal-state program that provides health care coverage to more than 70 million people.

Rep. Chip Roy (R-Texas), an outspoken member of the conservative House Freedom Caucus, warned that significant changes would have to be made to the legislation — particularly the Medicaid portion — to win over his support.

“Does the bill offer ANY transformative changes on Medicaid or otherwise?  Currently - NO,” he wrote on X.

The hard-line conservative, who has voiced opposition to legislative undertakings in the past, said he needs to see “SIGNIFICANT” changes to the current package to get on board, arguing he will not be swayed by the “enormous pressure to ‘get in line’” that skeptics will likely face.

“I remain open-minded because progress has been made based on our forceful efforts to force change,” he added. “But we cannot continue down the path we’ve been going down - and we will need SIGNIFICANT additional changes to garner my support.”

At the same time, the deep cuts to Medicaid also triggered warnings from a key Senate conservative, Sen. Josh Hawley (R-Mo.), who pronounced them “morally wrong and politically suicidal.”

Hawley doesn’t get a vote on the House package, but his support will be key for a vehicle to move through the Senate and reach Trump’s desk.

The challenge facing Speaker Mike Johnson (R-La.) and his leadership team is to ease the concerns of both ideological camps and pass the proposals through a chamber in which the margin for error is miniscule. If they lose just four House Republicans, the bill is dead.

They are trying to pass the bill by the Speaker’s self-imposed Memorial Day deadline, a time frame several lawmakers are skeptical of.

Despite the lingering reservations, GOP leaders are racing ahead, all but daring the holdouts to vote against Trump’s second-term domestic wish list — a massive package some Republicans are betting is too big to fail.

The Energy and Commerce Committee plans to mark up its proposal beginning at 2 p.m. EDT Tuesday, with the Ways and Means Committee beginning its markup 30 minutes later.

“Yes, I think we’re going to meet it,” Johnson told reporters Monday when asked if he is confident he’ll meet the Memorial Day deadline.

Trump is already laying on the pressure. In a Truth Social post Monday, he urged Republicans to “UNIFY” behind the leaders of the key committees, writing that “The Bill is GREAT.”

“We have no alternative, WE MUST WIN!” he added.

Democrats won’t make it easy.

While the minority party is powerless to block the legislation if Republicans rally behind it, Democrats are united in opposing it. Their central argument is that the GOP bill is a reverse-Robin Hood “scam,” slashing federal health programs in order to locate the budget savings to accommodate a new round of tax cuts for the wealthiest Americans.

The Democrats’ messaging machine is running full throttle, warning voters that federal benefits will disappear for many low- and working-class families. They’re hoping to spark a public outcry that will either compel moderate Republicans to oppose the legislation, or maximize their political vulnerability if they support it.

Rep. Frank Pallone Jr. (N.J.), the ranking Democrat on the Energy and Commerce panel, summarized his party’s message in the hours after committee Republicans released their proposal, which the Congressional Budget Office (CBO) estimated would cut deficit spending by $912 billion over the next decade.

“This bill confirms what we’ve been saying all along, Trump and Republicans have been lying when they claim they aren’t going to cut Medicaid and take away people’s health care,” Pallone said. “Let’s be clear, Republican leadership released this bill under cover of night because they don’t want people to know their true intentions.”

The $912 billion figure goes beyond the $880 billion the panel was tasked with locating under the Republicans’ budget blueprint. At least 8.6 million people are expected to lose their health insurance under the GOP bill, the CBO said. 

“This is not trimming fat from around the edges, it’s cutting to the bone,” Pallone said. 

Democrats on the Energy and Commerce Committee are expected to focus on those points of contention — and others — during the panel’s markup, which is poised to run through the night. The committee set a record for its longest markup — 27 hours — in 2017, and Democrats have been rumored to want to update the history books.

The Ways and Means Committee markup is also expected to be a marathon, one in which Democrats are sure to accuse Republicans of catering to the rich, Republicans are sure to accuse Democrats of blocking middle-class tax benefits, and Republicans are sure to battle one another over the size and scope of the SALT deduction cap.

Aside from the SALT deduction cap, the Ways and Means Committee is looking to make good on Trump’s campaign promises of doing away with tips and overtime — provisions that would sunset at the end of 2028 — in addition to making the 2017 income tax rate reductions permanent.

In a sign of the late night to come, the panel offered reporters tips on how to stock up on Celsius, the energy drink that is omnipresent on Capitol Hill and a favorite among the press and politicians alike.

“Just a friendly reminder to all those planning on covering tomorrow's Ways and Means markup that Costco sells Celsius in bulk,” J.P. Freire, communications director for Republicans on the panel, wrote on X.