Tax Bill Update: House Moves Toward Passage
May 20, 2025
The House plans to consider the full reconciliation bill this week, but House Speaker Mike Johnson (R-LA) continues to negotiate with various Republican factions to advance the bill.
Why it matters: Johnson has a narrow majority (220 to 213) and has to contend with a variety of “red lines” on SALT, the deficit, Medicaid, IRA programs, and more. Republicans can afford to lose only three votes to pass the legislation, as Democrats are not expected to back it.
The “One Big Beautiful Bill” faced a setback on Friday when five Republicans on the Budget Committee voted with all Democrats to block the bill.
- As part of reconciliation, the Budget Committee assembles the various titles passed by other committees before it heads to the House floor.
- Rep. Chip Roy (R-TX) opposed the bill, which he called “back-loaded savings and has front-loaded spending.”
- Three other Freedom Caucus members joined Roy while one GOP member voted against the bill as a parliamentary maneuver to allow for its reconsideration.
What they’re saying: Johnson negotiated with the holdouts over the weekend and made promises on accelerating Medicaid work requirements and sunsetting IRA energy tax credits earlier. President Donald Trump also weighed in via social media, urging support, and will attend a House GOP meeting in person today to make his pitch.
- The committee passed the bill 17-16 late Sunday evening with the four holdouts voting “present.”
- Despite allowing the bill to advance, the House Freedom Caucus published a statement following the vote noting the bill “still does not meet the moment.”
- Moody’s credit downgrade of the U.S. government may also give spending critics more sway in reshaping the bill.
What’s next: The House Rules Committee will be the next stop for the bill before the House floor, offering another opportunity for the Freedom Caucus to weigh in on the bill.
- Two of the initial objectors on the Budget Committee also sit on the Rules Committee.
- The Rules Committee will meet at 1 A.M. on Wednesday — yes, 1 A.M. — to set the parameters for consideration on the House floor.
- House GOP leadership hopes to pass the bill out of the House this week, but they’ve indicated they could stay over the Memorial Day weekend if delays persist.
Yes, but: Johnson still has to negotiate acceptable SALT cap provisions, which have taken a back seat in the current round of negotiations.
- Even if the bill advances out of the House, the Senate will present a new set of political challenges. GOP senators are not pushing for SALT limit increases, and some are more sensitive to Medicaid cuts.
- Republicans hope to deliver the bill to the president by July 4 — both as a symbolic victory and to raise the debt ceiling ahead of an expected August “X-date.”
What's next: CREFC’s Government Relations team will continue to monitor developments related to the passage of this bill and its implications for CREFC members.
Contact
David McCarthy (
dmccarthy@crefc.org) with any questions.