WASHINGTON — Early Thursday, the U.S. House of Representatives witnessed a significant political maneuver as Republicans successfully advanced President Donald Trump’s tax legislation through a narrow vote. The final tally stood at 215 in favor and 214 against.
Every Democrat opposed the bill, joined by Republican Representatives Warren Davidson of Ohio and Thomas Massie of Kentucky, while Rep. Andy Harris of Maryland, who heads the conservative House Freedom Caucus, opted to vote present. This outcome marked a notable achievement for Republican leaders, who had invested two months in drafting the proposal and made last-minute adjustments in the preceding days.
The legislative package, which spans over 1,000 pages and includes 42 separate amendments, illustrates the efforts to cater to both moderate and hardline Republican factions. A marathon 21-hour session of the House Rules Committee was held to discuss and refine the amendments, all aimed at meeting Speaker Mike Johnson’s ambitious timeline to have the bill ready for a Memorial Day vote.
However, the journey ahead in the Senate is anything but straightforward. The upper chamber will deliberate on this legislation under budget reconciliation rules, enabling the bill to pass with a simple majority rather than the conventional 60 votes required for most Senate legislation.
“To our friends in the Senate, I would just say, the president is waiting with his pen,” Johnson stated on the House floor prior to the vote, reiterating his commitment to present the package to President Trump by July 4. “Today proves that we can do that and we will do that,” he declared.
Nevertheless, resistance is brewing among Republican senators, with many indicating that they will push for substantial changes to the proposed legislation before providing their support.
The version of the bill that passed included numerous amendments, each intended to secure a win for different factions within the party. For instance, a provision that accelerates the implementation of work requirements for Medicaid recipients was advanced by two years, now set to take effect by the end of 2026, reflecting a conservative victory.
Conversely, the amendments also raised the state and local tax (SALT) deduction cap significantly, increasing it from the current maximum of $10,000 to $40,000 for taxpayers earning below $500,000. This broader legislation aims to fulfill key promises from Trump’s campaign, making permanent his 2017 tax cuts and eliminating taxes on tips.
Despite these measures, a recent analysis from the nonpartisan Congressional Budget Office indicated potential inequalities, estimating that the legislation would generally reduce resources for households in the lowest income decile while benefiting those in the highest decile.
Investor sentiment took a hit on Wednesday, as concerns over the implications of Trump’s spending bill surfaced, prompting fears of heightened federal deficits and weakened long-term economic stability. The yield on the 30-year Treasury bond reached 5.09% amid these worries.
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