Ways and Means Committee to Take On Reconciliation Bill Tuesday

WASHINGTON — The House Ways and Means Committee will have its moment in the reconciliation spotlight on Tuesday when it meets to markup the “skinny version” of the so-called “big beautiful bill,” that will extend President Donald Trump’s 2017 tax cuts, while making sweeping cuts elsewhere across the federal budget.

The meeting is scheduled to be held at 2 p.m. in room 1100 of the Longworth House Office Building.

“Seven years ago, the Trump tax cuts sparked an economic boom and provided needed relief to working families,” said the committee Chairman Jason Smith, R-Mo., in a written statement as the text was released on Friday.

“Pro-family, pro-worker tax provisions are the heart of President Trump’s economic agenda that puts working families ahead of Washington and will create jobs, grow wages and investment, and help usher in a new golden age of prosperity,” he said.

“Ways and Means Republicans have spent two years preparing for this moment, and we will deliver for the American people,” he declared.

But the panel’s top Democrat, Ranking Member Richard Neal, D-Mass., predicted Tuesday’s session will be something less than the committee’s shining moment.

“Releasing this bill under the cover of darkness, omitting major provisions, the only marker that this is Republican marquee legislation are the tax cuts for billionaires,” Neal said.

“I wasn’t so naive as to think they would give the American people as much time as possible to review their plan, but with how much is missing from this bill, it’s a new low,” he said. “If you believe in what you are setting out to do, do it when the people are watching.

“I’ll tell you what’s coming: handouts for billionaires, health care cuts for the people,” Neal added.

As the Massachusetts Democrat said, the highly anticipated release of the proposal text on Friday did omit some very important elements— namely any proposal on what to do about the state and local tax deduction cap, also known as SALT, which has divided the Republican conference.

With Democrats solidly against extending Trump’s tax cuts and a razor thin margin in the chamber, House Speaker Mike Johnson can ill afford to lose a single vote, let alone as many as the half dozen blue-state Republicans that are now in jeopardy due to SALT.

Johnson was scheduled to meet with the dissidents Monday morning to see where things stand.

Also left out of the document released Friday are a number of tax cuts that Trump repeatedly talked up on the 2024 campaign trail, including the elimination of taxes on tips and overtime and Social Security, and a tax break to help ease consumer’s auto loan interest payments.

And then there’s the fate of clean energy tax credits that the Biden administration created as part of the Inflation Reduction Act.

Republicans consider these tax credits — which apply to everything from solar and wind power, to nuclear, hydrogen and electric vehicles — ripe for elimination and one of the easiest ways they can approach the $2 trillion in spending reductions they need to pay for the tax cuts.

Rep. Darin Lahood, R-Ill., a member of the Ways and Means Committee’s tax subcommittee, told reporters last week that the committee will likely propose that the tax credits be phased out over time.

“There has been a thoughtful, and I would say reasonable, approach with a number of those,” LaHood said. “We don’t want to pull the rug out from particular industries.”

While a more fleshed-out version of the bill is expected to be circulated among committee members prior to Tuesday’s meeting, Democrats say that will give them little time to offer, debate or vote on amendments to the measure.

Among the items that are in the proposal released Friday are an increase in the pass-through tax deduction for qualified business income, raising it from 20% to 22%, and an increase in the child tax credit, which would be bumped up to $2,500 through 2028, up from $1,000, and then settle in at $2,000 in subsequent years.

The proposal also adds new requirements for how to claim the child tax credit, as well for accessing federal health benefits under Medicare.

Also notably, the proposal would raise the estate and gift tax exemption to $15 million.

In recent weeks, Johnson has said he wants the full House to vote on the reconciliation package by the Memorial Day recess, meaning it has just eight days left on its legislative calendar to meet his deadline.

The plan now is for the proposal to move through Ways and Means and three other committees: Energy and Commerce, Agriculture and Natural Resources, early this week, and then have the House Budget Committee assemble the final bill by Friday.

If that happens, Johnson could conceivably have the House Rules Committee vote on it Monday, ahead of a floor vote by the end of the week.

But insiders say a lot can happen between now and then, and it could turn out that Johnson simply can’t please everybody and bridge the gaps that currently exist between conservatives in the conference, including the House Freedom Caucus, and more moderate members.

Even if the outstanding issues within the House are resolved, it still remains to be seen whether whatever package the House passes is reconcilable with the Senate’s intentions — particularly in terms of proposed spending cuts.

Previously, Senate Majority Leader John Thune, R-S.D., and his Republican colleagues have said they wanted their role in the process to be wrapped up by the Fourth of July.

On Friday, the process took on a renewed sense of urgency after Treasury Secretary Scott Bessent informed congressional leaders that they must approve an increase in the U.S. government’s debt limit by mid-July.

The notification has been a formality of the budget process in recent years, and like Janet Yellen before him, Bessent told the House and Senate leaders that uncertainty in project government cash flows makes it impossible to identify precisely how long “cash and extraordinary measures will last.”

“However, after reviewing receipts from the recent April tax filing season, there is a reasonable probability that the federal government’s cash and extraordinary measures will be exhausted in August while Congress is scheduled to be in recess,” he said.

“Therefore, I respectfully urge Congress to increase or suspend the debt limit by mid-July, before its scheduled break, to protect the full faith and credit of the United States,” Bessent said.

Dan can be reached at [email protected] and @DanMcCue