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Today, the House Budget Committee rejected Republicans’ multi-trillion-dollar border, energy, and tax package 16 to 21, in a likely temporary setback for the reconciliation bill over concerns from conversative Republicans over several aspects of the legislation.

 

Reps. Josh Breechen (R-OK), Andrew Clyde (R-GA), Ralph Norman (R-SC), Chip Roy (R-TX), and Lloyd Smucker (R-PA) joined all Democrats in opposition to the reconciliation package, with Smucker changing his vote from yes to no in order to call for a future vote on the bill in committee.

 

Breechen, Clyde, Norman, and Roy individually demanded several changes to the legislation, including more stringent Medicaid work requirements and earlier phase downs of Inflation Reduction Act (IRA) clean energy tax credits. House Budget Committee Chair Jodey Arrington (R-TX) has subsequently announced the Budget Committee will reconvene on Sunday, May 18, at 10 p.m. ET to continue consideration of the bill.

Competing Demands? House Republican leadership must satisfy several competing demands for final floor consideration of the reconciliation package. House leaders and House Freedom Caucus members have indicated they will continue to negotiate through the impasse over the coming days. However, various concessions to the conservative Budget Committee members may also jeopardize the support of several moderate House Republicans who have expressed concern over the impact of Medicaid cuts on health coverage and risks to ongoing clean energy investments from IRA changes. In addition, House Republican leaders are continuing to negotiate with several Members seeking an increase in the state and local tax (SALT) deduction cap. Any increase in the current SALT limitation will further increase the size of the tax and spending package, risking noncompliance with the House’s reconciliation instructions and further concerns from conservatives over the bill’s impact on the deficit.

What’s the Timeline? House Republican leadership initially planned to convene the Budget Committee and Rules Committee on Friday and Monday, respectively, to provide for House floor consideration of the reconciliation package by their self-imposed Memorial Day deadline. House leadership is likely to attempt to resolve remaining issues with the package through the weekend to finalize committee consideration and meet their deadline.

Tax Update: House Budget Committee Blocks Reconciliation Bill

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