Republicans are pushing to pass a massive tax and spending bill — dubbed the "One Big, Beautiful Bill" — ahead of Memorial Day, but deep GOP divisions are threatening its fate.
Yahoo Finance Washington Correspondent Ben Werschkul joins Morning Brief to explain how disagreements over State and Local Tax (SALT) deductions, Medicaid cuts, and delayed spending reductions could derail the effort.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Republicans are racing to advance a sweeping tax and spending package, dubbed the one big, beautiful bill, which would cement a big part of President Trump's economic agenda. They're hoping to get a vote in the house before Memorial Day weekend, but there are some internal divisions that threaten the success of the bill. Here with more, we've got Yahoo Finance Washington correspondent Ben Wershkow. Ben, just give us the latest color around the bill.
For sure. Yeah, so good morning, Brad. Um, so, so Speaker Mike Johnson has a real has a tough job this week. He's trying to get to this Memorial Day deadline you mentioned, and he's he's run up against basically three groups of lawmakers in his caucus, three groups of Republicans who are dug in. They all have the ability to sink this effort, and they're all, at least for the moment, pledging to vote no. The first issue here is on the tax front. It's the state and local taxes. Um, as the graphic showed there, the the current plan is to raise the salt cap from what, $10,000 annually to $30,000 annually. That is not enough for a group of kind of blue state Republicans who are talking about a deduction that's much higher than that. There are that's been a series of tense meetings this week. Um, they they call themselves the Salty Five, and they the the margins are so small that they have the ability, if they hold together. Um, the second big issue at the moment is around Medicaid. Um, basically, um to to help pay for this, there's a lot of ways to trim Medicaid benefits that could cause millions of people to lose their health insurance in the years ahead. That's about what a bunch of an of analysis show. That has genuinely spooked a lot of Republicans who will say, you know, this is not this is not what we're about is is causing people to lose health care. A big proponent of that is in the Senate, Senator Josh Hawley of Missouri who said, "I will not vote for this in the Senate if it gets that far, or I will change it." So, that's that's a giant issue. The third group is actually on the opposite side of the second group in a lot of ways, which are fiscal conservatives who say we need deeper spending cuts to make this bill more fiscally responsible. Um, there was a there was kind of a revelation this week when the bill was released that a lot of these spending cuts are delayed until 2029, which is notably when when Donald Trump would be scheduled to leave office. That raised a lot of ire that this that these spending cuts in here aren't real, especially even on the Medicaid front. So there's there's a group there that says, "We're going to vote no if that if that isn't addressed." The the the front on it today is the House Budget Committee, which is trying to kind of compile this whole bill together. It it runs over a thousand pages at the moment. Um, but these the the fiscal conservatives are sort of especially powerful in that arena. Chip Roy of Texas is a is a big figure there, and he told reporters this morning this this hearing should recess, and they should kind of go back to square one. So it's not a great sign. The hearing is going on now, but they they need some resolution if they can get to this deadline for a vote next week. Others are saying that this is inevitably going to push and is going to be kind of a summer or even a fall winter thing. But we'll see how this hearing plays out today.
