US Congress Blocks Sweeping Tax Bill
WASHINGTON — A major tax bill proposed by the US administration failed to pass a critical procedural vote on Friday, marking a rare setback for the Republican-led Congress. The bill, which aimed to extend 2017 tax cuts and introduce new tax changes, was blocked by hardline Republicans demanding deeper spending reductions.
The sweeping tax bill would add trillions to the federal government’s already massive $36.2 trillion debt over the next decade. It plans to continue the tax cuts that were a hallmark of the first term, eliminate taxes on some tips and overtime, increase defense funding, and allocate more money to border security efforts.
Concerns Over Rising Federal Debt
The federal government has long spent more than it earns, and this trend is expected to continue. As a result, Moody’s credit rating agency downgraded the US’s top-tier AAA credit rating on Friday. Moody’s cited a lack of serious efforts by the government to reduce spending and projected that federal debt could grow to about 134% of GDP by 2035.
This downgrade followed earlier ones by other major agencies, leaving the US with a lower credit rating than before. The agency also warned that tariffs could significantly hamper the country’s long-term economic growth.
Republican Divisions Stall Bill Progress
Despite the president’s call for unity behind the legislation, five Republicans on the House Budget Committee voted against the bill. They demanded further cuts to Medicaid and a complete repeal of green energy tax incentives introduced by Democrats.
The committee plans to reconvene late Sunday night to reconsider the bill. If approved, the measure would move forward to a full House vote, potentially before the Memorial Day holiday.
Hardline Republicans Stand Firm
Representative Ralph Norman, a member of the conservative wing, defended his opposition, saying, “This isn’t a grandstand. We’ll compromise somewhere, but just not giving the farm.” This group is pushing for deeper spending cuts, especially targeting social safety net programs.
The divide within the Republican Party pits hardliners against moderates who worry that severe cuts could threaten the narrow House majority in upcoming elections.
Financial Impact and Political Reactions
The tax cuts are expected to cost $3.72 trillion over ten years, according to Congressional estimates. The bill also includes controversial provisions such as eliminating taxes on firearm silencers and lifting taxes on tips and overtime, which supporters say will aid working-class Americans.
Democrats strongly oppose the bill, arguing it primarily benefits the wealthy and could cause millions to lose health coverage due to Medicaid and Affordable Care Act spending cuts. Representative Brendan Boyle remarked, “No other previous bill, no other previous law, no other previous event caused so many millions of Americans to lose their healthcare. Not even the Great Depression.”
Future Prospects
While Friday’s vote was a setback, it is seen as temporary. Lawmakers expect negotiations over the weekend to produce amendments that could secure enough support for the bill’s passage.
The proposed legislation would also impose work requirements on Medicaid starting in 2029, though some conservatives want these requirements implemented immediately and demand sharper federal funding cuts.
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