Trump Tax Bill Passes Key Panel to Advance in U.S. Congress

On Sunday night, May 18, 2025, President Donald Trump's expansive tax and spending package, known as the "One Big Beautiful Bill," cleared a significant hurdle in the U.S. Congress. The House Budget Committee narrowly approved the bill with a 17–16 vote, following intense negotiations that saw four conservative Republicans who had previously opposed the measure vote "present." This development marks a pivotal step in advancing Trump's legislative agenda, which aims to extend and expand the 2017 Tax Cuts and Jobs Act.

AP News

+3

The Washington Post

+3

New York Post

+3

New York Post

+4

AP News

+4

The Washington Post

+4

Wikipedia

+3

BusinessWorld

+3

The Washington Post

+3

The "One Big Beautiful Bill" Explained

The proposed legislation seeks to make permanent the tax cuts enacted under the 2017 Tax Cuts and Jobs Act, which are set to expire at the end of 2025. Key provisions include:

Elimination of Taxes on Tips, Overtime, and Auto Loan Interest: The bill proposes removing taxes on tips, overtime wages, and auto loan interest, aiming to reduce the tax burden on workers and consumers.

Reuters

+3

AP News

+3

The Washington Post

+3

Increased Deductions for Seniors: It includes provisions for higher tax deductions for senior citizens, providing them with greater financial relief.

Reuters

+2

Ways and Means

+2

NTD

+2

Enhanced Border Security and Defense Spending: The legislation allocates substantial funds for border security and defense, reflecting the administration's priorities in these areas.

AP News

Medicaid Overhaul: The bill proposes significant changes to Medicaid, including stricter work requirements and potential reductions in coverage, which have been points of contention among lawmakers.

However, the bill's passage has not been without controversy. Critics argue that it could add between $3 to $5 trillion to the national debt over the next decade, a concern highlighted by Moody's recent downgrade of the U.S. credit rating. The downgrade cited projections of debt reaching 134% of GDP by 2035 as a significant risk to economic stability.

Reuters

+1

AP News

+1

Internal Republican Divisions

The path to this vote was fraught with internal divisions within the Republican Party. Initially, hardline conservatives blocked the bill due to concerns over its fiscal impact and insufficient spending cuts. However, after closed-door negotiations led by House Speaker Mike Johnson, these members agreed to vote "present," allowing the measure to advance.

Axios

+2

The Washington Post

+2

AP News

+2

Despite this temporary resolution, tensions persist. Some conservatives, particularly from the House Freedom Caucus, continue to demand deeper spending cuts and earlier implementation of Medicaid work requirements. On the other hand, moderates express concern that such measures could harm Trump's voter base, especially in swing states.

Reuters

+3

AP News

+3

New York Post

+3

Reuters

Former House Speaker Kevin McCarthy criticized the hardliners for their obstructionist tactics, labeling their actions a "real misstep" that jeopardizes the party's unity and legislative success. He emphasized the importance of passing the bill to prevent tax increases and maintain economic stability.

New York Post

Next Steps in the Legislative Process

With the Budget Committee's approval, the bill now moves to the House Rules Committee, which will determine the terms for debate and amendments. Speaker Johnson aims to bring the bill to the House floor for a vote before the Memorial Day holiday, aligning with the looming debt ceiling deadline. The Republican majority in the House remains slim, and the bill's success will depend on maintaining party cohesion.

Reuters

+1

AP News

+1

Axios

If passed by the House, the bill will proceed to the Senate, where further changes are anticipated. The Senate's version of the bill may differ in key areas, particularly concerning spending cuts and debt limits, which could complicate final approval.

AP News

Economic and Social Implications

Proponents of the bill argue that extending the 2017 tax cuts will spur economic growth, create jobs, and provide relief to American families. They highlight potential benefits such as increased investment in Opportunity Zones and enhanced deductions for small businesses. Supporters also point to the elimination of taxes on tips and overtime as measures that will directly benefit workers.

Ways and Means

AP News

+4

Reuters

+4

BusinessWorld

+4

However, critics warn that the bill's provisions could exacerbate income inequality and strain social safety nets. The proposed Medicaid overhaul, in particular, has raised concerns about potential loss of coverage for millions of Americans. Estimates suggest that up to 8.6 million individuals could lose Medicaid coverage if the bill's provisions are enacted.

Axios

+1

Reuters

+1

Reuters

Additionally, the projected increase in national debt could lead to higher interest rates and economic instability, affecting both individuals and businesses. Treasury Secretary Scott Bessent has dismissed these concerns, arguing that the plan will boost economic growth and offset potential risks.

Reuters

+1

BusinessWorld

+1

Conclusion

The passage of President Trump's tax and spending package through the House Budget Committee represents a significant step in advancing his legislative agenda. While the bill has garnered support from many Republicans, it faces continued opposition from fiscal conservatives and moderates within the party. As the legislation moves through the House and Senate, its final form will depend on ongoing negotiations and compromises. The outcome will have profound implications for the U.S. economy, federal spending, and the political landscape leading up to the 2026 elections.