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Republicans are hoping to push through Trump's tax cuts despite divisions

Republicans in the U.S. House of Representatives are trying to push President Donald Trump's tax bill through this week despite a long-running battle over tax breaks and spending cuts that threatens their fragile majority.

The government continued to push ahead, even after Moody's stripped the U.S. Federal Government of its top credit rating. They said that Congress and multiple administrations had not shown any political will to deal with the nation's $36.2 trillion debt. U.S. Stock Futures indicated a lower trading day on Monday following Moody's decision.

Four conservatives who were adamant about spending cuts demanded more in private discussions with Republican leaders and White House officials. They voted in favor of moving forward in an unusual Sunday night House Budget Committee meeting.

The next test will come at 1 am ET (0500 GMT) on Wednesday when the House Rules Committee decides whether to allow it to be put up for a vote in the full chamber. The House Rules Committee will decide whether it can be put to a vote by the entire chamber on Wednesday at 1 a.m. ET (0500 GMT).

Republicans were divided on major issues, such as Medicaid cuts and limitations to the deduction of state and local tax.

We'll have to meet with other members of the conference this week. "This bill is important to everyone, from moderates to ultra-conservatives, and all in between," said No. CNBC reported on Monday that Louisiana's 2nd House Republican Representative Steve Scalise.

Analysts who are not partisan say that the bill will also add between $3 trillion and $5 trillion in debt to the United States over the next 10 years.

House Speaker Mike Johnson wants the chamber to pass legislation and send it to the Senate by the U.S. Memorial Day weekend on May 26.

Trump's Republicans have a majority of 220-213 in the House, but they are divided on how much to cut spending to offset the costs of tax cuts. So far the Republican-controlled Congress has not rejected any of Trump's legislative requests.

Hardline conservatives demand that the Medicaid program, which provides healthcare to low-income Americans, be cut deeply and that the green tax credit is repealed completely. Moderate Republicans oppose this because they believe it will harm working-class and farmer voters who will vote in 2026's midterm elections.

According to the nonpartisan Congressional Budget Office, the cuts in spending already proposed by the legislation will kick 8,6 million people out of Medicaid.

MEDICAID WORK REQUIREMENTS

Republican lawmakers are considering new work requirements for Medicaid recipients, but their debate centers on the timing of these requirements, Republican leadership advisers told journalists on Monday.

Republicans and Democrats are at odds on the issue of the deduction of state and local tax, also known as SALT. This is a critical issue for a few incumbents in states like New York and California, which are crucial to the narrow majority of the Republican Party in the House.

Hardliners claim that spending cuts must be made to counter Trump's tax cut.

"The bill is not ready yet," said Chip Roy, a prominent conservative who was one of four hardliner representatives that voted "present" to allow the bill to advance on Sunday night.

The Texas Republican stated in a post on social media that "we can and must improve before we pass the end product."

The measure would extend Trump’s 2017 tax cuts – his signature legislative achievement of his first term – reduce taxes on certain tips and overtime earnings, boost defense expenditures and provide more funding for his border and Immigration crackdown.

In Sunday TV interviews, Johnson and Treasury Sec. Scott Bessent downplayed the significance of the rating reduction. The speaker pointed to the action by the credit rating agency as proof that Congress must pass the Trump Bill quickly.

The Senate Republicans have said that they will alter the bill, if the bill is able to pass the lower chamber. (Reporting and editing by Scott Malone; Toby Chopra, Alistair Bell and Scott Malone)

(source: Reuters)