...who loses most? The poor and middle class - on food stamps, Medicaid, small tax cuts won't offset higher tariff prices, more layoffs. US Congress set for massive tax bill vote as bond market in turmoil Bo Erickson and David Morgan
May 22, 2025 – 9.50am
Washington | US House Speaker Mike Johnson said he would bring up Donald Trump’s massive tax and spending bill for a vote as soon as Wednesday evening (Thursday AEST), in a sign that he may have quelled objections from fellow Republicans who have imperiled its passage.
After meeting with Trump and the holdouts at the White House, Johnson told reporters the House would vote on the bill Wednesday night or Thursday morning. “I believe we are going to land this airplane,” he told reporters.
It was not immediately clear what changes Johnson and Trump had made to win the support of a handful of hardline Republicans who have pushed for deeper spending cuts. Members of the group said earlier in the day they were encouraged by the negotiations but needed more time.
The bill would extend Trump’s signature 2017 tax cuts, create
a. new breaks for tipped income and auto loans,
b. end many green-energy subsidies and
c. boost spending on the military and immigration enforcement.
d. tighten eligibility for food and health programs that serve millions of low- income Americans.
The “big, beautiful” bill pushed by the Trump administration is raising concerns among bond investors about the US debt and deficit levels. Those investors were already on edge over Trump’s whipsawing tariff policy. This week’s attempt to push through the sweeping tax cuts without significantly slashing spending set off a fresh bout of bond market turmoil.
The nonpartisan Congressional Budget Office estimates the bill will add $US3.8 trillion ($5.9 trillion) to the $US36.2 trillion in US debt over the next decade.
Credit rating firm Moody’s last week stripped the US government of its top tier credit rating, citing the nation’s growing debt. US stocks fell on Wednesday amid investor concern about the mounting debt.
Johnson said earlier that Republican negotiators had agreed on deductions for state and local taxes – a major issue for Republican lawmakers from New York and California, who are critical to his narrow majority – but acknowledged hardliners’ resistance.
Success in the House would set the stage for weeks of expected debate in the Senate.
Republicans, who control both chambers of Congress, are waiting for their leadership’s overall amendment package to the bill that is meant to coalesce the party’s sparring factions. Democrats have also proposed more than 500 amendments.
If Congress passes the legislation, it would reduce some health and food benefits for low-income Americans, cancel green-energy programs and provide tens of billions of dollars for immigration enforcement.
Trump visited Republican lawmakers at the Capitol on Tuesday to try to persuade holdouts to get in line on what he calls a “big, beautiful bill,” but failed to sway the wide array of lawmakers who object to specific features. Little wiggle room
Johnson has little room for error, as his party holds a narrow 220-212 majority and a handful of “no” votes from his side could scuttle the bill, which Democrats say favours the wealthy and cuts to needed social programs.
“We’ve got the majority. We’ve got the president in there to fix this country. And we have an opportunity of a generation, a lifetime,” said Representative Brian Babin, a Texas Republican. “I’m just hoping and praying that we get the thing passed.”
Republican lawmakers have said they do not believe the nonpartisan analysts’ projections and accused Moody’s of deliberately timing its Friday afternoon downgrade to try to block the bill’s passage.
Democrats said the bill disproportionately benefits the wealthy and cuts programs needed by working families.
“Deficits aside, this bill is ugly because it is ultimately a betrayal of the contract that we have made with the American people, and especially to our babies and to our working people,” said Democratic Representative Gwen Moore.
The Medicaid health program for low-income households has proven to be a major sticking point, with fiscal hawks pushing for cuts to partly offset the cost of the bill’s tax components, which moderate Republicans say would hurt voters whose support they will need in the 2026 midterm congressional elections.
The bill also faces objections from a handful of centrist Republican lawmakers from high-tax states, including New York and California, who are pushing to expand a proposed $US30,000 cap on deductions for state and local taxes.
The bill would raise the nation’s debt ceiling by $US4 trillion. Lawmakers must act to address that limit by this northern summer or risk triggering a devastating default.
