Update 867: House Marathon Mark-ups

May 19, 2025 | Child Tax Credit, IRA, Medicaid, Reconciliation, SALT, SNAP, Taxes, TCJA, Treasury, Update | By

Update 867 – House Marathon Mark-ups:
Reconciliation Tax, Spending Cuts OK’ed

This week, the House Ways and Means, Energy and Commerce, and Agriculture Committees approved their portions of the GOP’s reconciliation bill following grueling, multiday markups. The harmful committee proposals pair $3.8 trillion in net tax cuts over ten years – a fourth of which would go to the wealthiest one percent of taxpayers – with over $1 trillion in cuts to government assistance programs, namely Medicaid and SNAP. These programs, which overwhelmingly support low-income Americans, would be cut by $625 billion and $300 billion, respectively – the largest such cuts in history. 

Proposals from the 11 House committees that received reconciliation instructions will now be packaged together by the Budget Committee and then sent to Rules, with a floor vote on the final package expected as early as next Wednesday. But the final passage is still in question, with moderates and fiscal hawks alike threatening to derail the process over unaddressed demands. Even if the package clears the House, the Senate is poised to make significant changes, threatening the extremely fragile current plan. Below, we shine light on Republicans’ regressive set of proposals, this week’s committee markups, and the road ahead for reconciliation. 

Best, 

Dana

House Republicans continued to move forward with the reconciliation process this week, holding markups for the most controversial portions of the bill in three committees: Ways and Means, Energy and Commerce, and Agriculture. Eight other committees have already moved through the markup process, though most of the sticking points in negotiations are under the jurisdiction of the three committees that took action this week. 

Each relevant committee has proposed and approved recommendations to meet their reconciliation instructions included in the budget resolution that was passed by both chambers of Congress last month. For this week’s markups, the resolution directed: 

  • Ways and Means to spend up to $4.5 trillion on tax cuts (this limit was reduced to $4 trillion because the House did not come up with $2 trillion in total spending cuts),
  • Energy and Commerce to cut at least $880 billion,
  • and Agriculture to cut at least $230 billion. 

These markups were originally scheduled to take place last week, but were delayed due to ongoing negotiations between the moderate and conservative wings of the Republican party – unsurprising considering the proposals cut over $700 billion in Medicaid funding and around $300 billion in SNAP funding, all to pay for tax cuts that are largely skewed towards the ultra-wealthy. These damaging optics of this tradeoff have not been lost on GOP moderates facing tough reelections during next year’s midterms, who fear tough votes could cost them their seats that are also crucial to Republicans holding the House majority. 

To try to limit public attention and expert analysis, Republicans unveiled limited proposals for Ways and Means and Energy and Commerce over the weekend and for Agriculture on Monday night, and scheduled all three markups for Tuesday. Ways and Means and Energy and Commerce began at 2 pm and 2:30 pm, respectively, and Agriculture began at 7:30 pm,  ensuring that much of the debate would occur in the dead of night. 

Below, we attempt to push back on this Republican strategy and highlight the damaging proposals unveiled by the three committees that held markups this week, focusing primarily on the regressive skew of the tax package and threats to Medicaid and SNAP.

Ways and Means Advances Sweeping Tax Cuts for the Wealthy

The House Ways and Means Committee advanced its reconciliation proposal at 8 am on Tuesday in a party-line, 26-19 vote following a more than 17-hour markup. The sweeping proposal contains almost $5 trillion in tax cuts, including $3.9 trillion in extensions and expansions to the 2017 Tax Cuts and Jobs Act (TCJA) provisions scheduled to expire at the end of this year, in addition to new tax proposals. The cuts were offset, in part, by $1 trillion in revenue-raising provisions, a majority of which target clean energy tax credits passed in the Biden-era Inflation Reduction Act (IRA).

The costs of the tax cuts were measured over a 2025-2034 budget window despite the fact that changes would not take effect until at least next year, meaning that the actual cumulative cost likely exceeds the $4 trillion instruction for Ways and Means. The $3.8 trillion estimate for the package also excludes interest costs, which would add almost a trillion dollars to the package’s score. A full breakdown of proposals and their costs from CRFB can be found here. 

As far as TCJA expansions and revisions are concerned, the proposal would (cost estimates included for the entire underlying provision, not just revisions): 

  • provide inflation adjustments for individual tax bracket thresholds to prevent bracket creep ($2.177 trillion cost),
  • increase the $20,000 standard deduction by $1,000 for single filers, $1,500 for heads of households, and $2,000 for joint filers through 2028 ($1.308 trillion cost),
  • increase the deduction for pass-through income (199A) from 20 percent to 23 percent ($820 billion cost),
  • increase the Child Tax Credit (CTC), which was temporarily doubled to $2,000 in the TCJA, from $2,000 to $2,500 through 2028 ($2,000 credit made permanent) ($797 billion cost), 
  • increase the estate tax exemption to $15 million for individuals and $30 million for married couples ($212 billion cost), 
  • revive business provisions that were phased out through the TCJA, including 100 percent bonus depreciation, R&D expensing, and a looser limitation on interest ($100 billion cost), 
  • and increase the State and Local Tax (SALT) deduction cap from $10,000 to $30,000 (still under negotiation, subject to change) ($919 billion savings, as there would not be a cap if the provision expires)

New tax proposals include: 

  • Trump campaign proposals like eliminating taxes on overtime ($124 billion cost), auto loans for vehicles manufactured in the U.S. ($58 billion cost) and tips ($40 billion cost) through 2028. Trump’s most popular campaign tax proposal, eliminating taxes on Social Security, was notably missing; however, there was an extra deduction included for seniors ($72 billion cost).
  • expansions of Health Savings Accounts (HSAs) ($44 billion cost),
  • and MAGA accounts that would likely operate similarly to Democratic-proposed baby bonds ($17 billion cost). 

While some of these expansions and new proposals sound progressive on paper, they leave a lot to be desired. For example, the “increased” CTC would still prioritize higher-income earners, preventing 17 million children from low-income families from receiving the full value of the credit. It also contains strict citizenship requirements for parents of children benefiting from the CTC, which will work to take away benefits from qualifying children. The extension and expansion of the 199A deduction for pass-through income is also problematic, as 72 percent of the deduction’s benefit goes to taxpayers in the top five percent of adjusted gross income (AGI). Additionally, proposals to eliminate taxes on tips and overtime arbitrarily favor certain workers, not necessarily based on need. And notably left out was an extension of ACA-enhanced Premium Tax Credits for health insurance, which the CBO estimates could cause around 5 million Americans to lose their health coverage. 

The general skew towards the wealthy can be seen in the distribution tables provided by the Joint Committee on Taxation (JCT) during Tuesday’s markup, which showed that the top one percent of earners would receive an average tax cut of $65,000 in 2027, while the bottom 20 percent of earners would receive an average tax cut of only $90. 

In Tuesday’s markup, Democrats highlighted this regressive skew, noting that Republicans are attempting to finance the tax cuts by cutting Medicaid and SNAP by over $700 billion and $290 billion, respectively, in addition to cuts across other committees. They made the point that, if Republicans really wanted to create a package that helps working Americans and Main Street businesses as they assert, they would work with Democrats on crafting a deficit-neutral proposal that cuts taxes for working- and middle-class Americans, financed by tax increases to wealthiest Americans and largest corporations instead of cuts to safety net programs. 

Looking ahead, objections still surround the Ways and Means portion of the greater reconciliation effort. One of the biggest challenges for leadership has been satisfying demands from GOP moderates from high-tax, Democratic states for a greater increase in the SALT deduction. Multiple Republicans, including Representatives Elise Stefanik (R-NY), Nick LaLota (R-NY), Mike Lawler (R-NY), Tom Kean (R-NJ) and Young Kim (R-CA) have already rejected the $30,000 cap that was included in the proposal the Committee advanced yesterday morning. Speaker of the House Mike Johnson (R-LA) remains confident that they will be able to strike a deal and amend the cap during the rules process, however, SALT reform is extremely costly and may not be feasible given Ways and Means’ $4 trillion cap. SALT is also not a priority for GOP Senators, who may very well choose to reject even the $30,000 cap included in the House proposal. 

These objections, especially when added to the overall optics of financing wealthy tax cuts with cuts to low-income assistance, may leave very little reason for moderates to support the proposal when it comes to a vote as early as next week. 

Energy and Commerce Eyes Largest Cut to Medicaid in History

This week, the House Energy and Commerce Committee approved a set of reconciliation proposals in a party-line, 30-24 vote following a markup that began Tuesday afternoon and stretched for more than 24 hours. 

The Committee surpassed its $880 billion instruction for deficit reduction, recommending $912 billion in net spending cuts for programs under its jurisdiction. Some of the savings come from auctioning broadband and rescinding IRA climate funding, though most – $715 billion – accrue from cutting healthcare spending. $625 billion of these proposed cuts are to Medicaid – a program that provides health coverage to over 72 million low-income Americans, including 30 million children. 

The CBO estimates that the changes included in the Energy and Commerce proposal would cause 8.6 million people to lose their health insurance by 2034, with the number increasing to 13.7 million when considering that the Ways and Means title does not extend enhanced premium tax credits. 

Focusing just on Medicaid cuts, the proposal: 

  • Institutes work reporting requirements ($301 billion cut) – The proposal would require recipients aged 19 to 34 to volunteer, attend school, or work for 20 hours a week. The work requirements won’t kick in until 2029, though House fiscal hawks are trying to accelerate this timeline before the full bill is considered on the House floor. Evidence shows that work requirements do not achieve their stated goal of increasing employment. The vast majority of Medicaid beneficiaries also already work, meaning the policy will do little more than add extra reporting requirements that will ultimately kick eligible Americans off their medicaid coverage: 

Source: CBPP

  • Overturns Biden-era Medicaid rules ($163 billion cut) – In March 2024, the Biden administration finalized a rule aimed at making it much easier for people to get on and stay on Medicaid. The rule cuts out red tape and paperwork that caused eligible people – especially kids, low-income seniors, and people with disabilities – to lose coverage simply for administrative reasons. The Energy and Commerce Committee’s reconciliation proposal would delay the implementation of these requirements until 2035, effectively killing the implementation of the rule. 
  • Places a moratorium on new or increased provider taxes ($87 billion cut) – Provider taxes are state-level taxes levied on healthcare providers that are used by states to increase federal funding for their programs. While Republicans often characterize these taxes as fraudulent, disallowing increases or new taxes will directly limit the states’ ability to fund their programs generally or react to specific cost increases, likely leading to significant cuts in benefits. 

In this week’s markup, Democrats called out Republicans for their blatant attempts to cut healthcare coverage for millions of Americans despite their assertion that beneficiaries would be held harmless. Democrats made it clear that throwing 13.7 million people off of their health insurance coverage is not cutting “waste, fraud, and abuse.” In the words of Energy and Commerce Ranking Member Representative Frank Pallone (D-NJ), the proposal “is not trimming fat from around the edges, it’s cutting to the bone.” Democrats also noted the real purpose of the proposed cuts, which is to finance trillions of tax cuts skewed towards the ultra-wealthy. Republicans may be able to celebrate with their wealthy donors who would receive massive tax breaks if their reconciliation proposal passes, but for the millions of Americans who could lose their health coverage as a result, there’s nothing to cheer about.

House Ag Republicans Vote to Roll Back Anti-Hunger Program for Most Vulnerable

The House Agriculture Committee voted to advance its reconciliation proposal in a party-line 29-25 vote yesterday night following an extended markup on Tuesday night and throughout the day on Wednesday.

The committee was instructed to cut $230 billion over the next decade. Committee Republicans chose to go further, passing a proposal saving an estimated $300 billion. The larger-than-necessary cuts were designed by Republicans to allow them to include a $60 billion farm bill package, bringing the net total deficit reduction close to their reconciliation target. 

Savings included in the bill are primarily through sweeping rollbacks of the nation’s largest anti-hunger program, the Supplemental Nutrition Assistance Program (SNAP). The program helps 42 million low-income people across the country afford food. The average SNAP benefit is currently only about $6 per person per day.

The proposal seeks to cut $290 billion from SNAP, including in several key ways:

  • Shifts SNAP costs to states ($155 billion cut) – SNAP is currently funded by the federal government and administered by states. In administering SNAP, states make errors, both overpayments and underpayments. The reconciliation proposal would, for the first time, require states to fund a share of SNAP beginning in FY28, with the proportion of funding they are responsible for providing determined using a sliding scale based on their payment error rates. States with the payment error rates below six percent would pay for 5 percent of SNAP benefits, while those with error rates above ten percent would pay 25 percent of benefits. The changes would particularly impact Alaska, New Jersey, South Carolina, Hawaii, and Delaware. This would require states to fund tens to hundreds of millions of dollars from their state budgets every year towards SNAP, and could lead states to increase their revenue or cut benefits. States and the federal government currently split the cost of administering SNAP evenly. Under the reconciliation proposal, states would be required to fund 75 percent of administrative costs while the federal government would only shoulder 25 percent. 
  • Restrains future Thrifty Food Plan (TFP) updates ($37 billion cut) – The TFP is the practical low-cost basket of groceries needed to meet a household’s basic nutritional requirements. The cost of the TFP is used to determine SNAP benefit amounts. As the cost of the TFP increases, so do SNAP benefits. The reconciliation package seeks to prevent future SNAP benefit increases through the TFP, leaving households with outdated benefits as grocery prices rise. 
  • Expands work requirements ($92 billion cut) – The reconciliation proposal seeks to expand the work requirement for Able-Bodied Adults Without Dependents (ABAWDs). Currently, most adults aged 18 to 54 without dependents can receive SNAP benefits within three months within a three-year period unless they demonstrate compliance with work requirements or prove that they qualify for an exemption. The reconciliation proposal would increase the age limit from 54 to 64 and limit exemptions to caregivers of children under seven. The proposal also seeks to expand SNAP’s paperwork requirements for states and families. These are expensive for states to implement and create increased opportunities for errors. With the state burden of SNAP funding tied to error rates, this could in itself lead to increased SNAP funding requirements for states. All of this could reduce SNAP benefits to an estimated three million parents with children over seven and over four million children in those households. 

As Ranking Member Angie Craig (D-MN) said, access to food is not a privilege, and this proposal represents the largest rollback of an anti-hunger program in the nation’s history. As Representative Jahana Hayes (D-CT) noted, the package is proof that hunger is a policy choice. The proposal is a blatant attempt to shift blame from Republicans to states when the most vulnerable go hungry. 

Look Ahead

The aforementioned proposals will now head to the House Budget Committee, which will package them together into an expansive reconciliation bill as early as tomorrow. The proposal will then move to the Rules Committee next week, with Republicans hoping to hold a floor vote on the full package as early as Wednesday. 

While the harmful proposals may have advanced out of committee, their final passage on the House floor is far from a certainty. Fiscal hawks like Representative Chip Roy (R-TX) are concerned that the proposals do not go far enough, and moderates have rightfully faced continuous pressure over their plans to cut federal assistance to pay for tax cuts for the wealthy – pressure that can be seen in the many explosive town halls Republican members have held in their home districts over the past few months. Add to that the lack of agreement on SALT, and moderates may very well choose to oppose the bill or risk losing in the midterm elections. Notably, changes that would satisfy moderates would also risk the support of the uneasy fiscal hawks. 

Furthermore, the proposal will have to head to the Senate after clearing the lower chamber, where multiple Republicans have already denounced the bill. Fiscal Hawks, Senators Rand Paul (R-KY) and Ron Johnson (R-WI), argue the package is weak on spending cuts, echoing the concerns from the right wing of the House GOP caucus. Moderate Senator Josh Hawley (R-MO) went as far as to pen an op-ed featured in the New York Times, stating, “I cannot support this House bill in its present state. It is evident that it needs modifications before it can advance in the Senate.” Given this opposition, the Senate may need to amend the bill more than a usual piece of legislation or go a different direction altogether. The Senate will also have to contend with strict rules of reconciliation governed by the Parliamentarian, which may restrict certain House proposals. 

While the Senate can procedurally make these changes to the reconciliation package and send it back to the House, Republican leadership will have a difficult, almost impossible time changing its contents while maintaining the extremely delicate balance required to overcome tight margins in both chambers. House moderates have also already expressed concern over supporting aspects of the package, like Medicaid cuts, if they will later be stripped by the Senate, an action that would unnecessarily hurt their voting records and reelection chances. 

To make matters worse for Republicans, the package includes a $4-$5 trillion increase in the debt limit, which will need to be resolved before the August recess to avoid the unprecedented economic catastrophe of a debt default, according to rough estimates from Treasury Secretary Scott Bessent released last week. Even if House and Senate Republicans can strike a delicate balance between both ends of the ideological spectrum, negotiations may very well extend past this deadline, requiring them to restructure their reconciliation proposal and take a different, possibly bipartisan approach to raising the debt limit. 

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