Speaker Mike Johnson (R-La.) on Thursday signaled that changes will be made to the party’s mega bill full of President Trump’s legislative priorities in order to win support from conservative and moderate Republicans balking at some of its provisions.
Those alterations, he warned, will not only include a larger tax break for blue states that several Republican moderates are demanding but also steeper spending cuts elsewhere in the bill, as fiscal hawks raise alarm that the legislation does not do enough to rein in the ballooning deficit.
“If you do more on SALT, you have to find more in savings. So these are the dials, the metaphorical dials I’m talking about,” Johnson said. “When you’re trying to craft a piece of legislation that is this comprehensive and this complex, it requires a lot of thought and deliberation.”
The Speaker declined to elaborate on what specifically would be changed, saying only that “everything is on the table.”
The warning came after a two-hour-plus meeting in the Speaker’s office Thursday, during with Johnson met with moderate Republicans pushing for a higher state and local tax (SALT) deduction cap and hardline conservatives calling muxh more muscular Medicaid changes — requests that are red lines for the opposite camps.
Republicans from high-tax blue states — including New York, New Jersey and California — are calling for an increase to the proposal SALT deduction cap of $30,000 for individuals making $400,000 or more, arguing that it does not provide substantive relief for constituents. The issue has been one of the biggest hangups hampering the bill.
Rep. Andrew Garbarino (R-N.Y.), a key member of the SALT Caucus, said after the meeting that the group provided scorekeepers with “new requests” for number analyses as they search for a deduction cap palatable for the entire conference.
“In one sense, [there was] good progress in that members were talking, understanding each other’s priorities a little better. That gives me some optimism,” said Rep. Nick LaLota (R-N.Y.), another SALT Caucus member. “Yet, there’s been no bonafide change, or an offer, different from what’s in the very faulty Ways and Means bill.”
Any increase to the deduction cap proposal, however, will spark howls from hardline conservatives, who are apprehensive to spiking the cap and say that if it goes higher, it must be paid for with additional spending cuts — slashes that could perturb moderates.
“I think $30,000 is more than generous,” Rep. Byron Donalds (R-Fla.) told reporters after the huddle.
“I’m open to making sure we get the president’s agenda through, and at its core, everybody in that room, we want to get the president’s agenda through, we’re committed to that,” he added. “It’s about really, how we put the math together. So if SALT goes up, then there’s gonna have to be some adjustments elsewhere.”
Rep. Chip Roy (R-Texas), one of the most outspoken hardliners, said that success of the bill “depends a lot on where the SALT guys want to be and what kind of a trade or deal can get done.”
One of the top asks from fiscal hawks is moving up the start date for Medicaid work requirements for “able-bodied” single adults, which are not set to kick in until 2029 — a delay that is drawing the ire of whose who want to expedite the savings that will come from the policy.
“I’d like to see the work requirements be immediately,” Rep. Eric Burlison (R-Mo.) said Wednesday, noting that he was against the bill in its current form.
But fiscal hawks have brought up many other changes they’d like to see, such as taking a tougher stance on the “provider tax” that allows states to extract more federal Medicaid matching dollars rather than just freezing it; lowering the Federal Medical Assistance Percentage (FMAP) for the Medicaid expansion established with ObamaCare and moving up bumping up the timeline to roll back green energy tax credits.
“It’s way more than work requirements,” declared Rep. Andy Harris (R-Md.), the chair of the conservative House Freedom Caucus.
In a sign of the tenuous negotiations, however, the latter idea is already sparking heartburn. A group of 13 House Republicans published a statement on Wednesday requesting more flexibility in the green energy tax credit phaseout.
The converging stances are creating a difficult balancing act for Johnson, who has to weigh the concerns of the vulnerable moderates with those of hardline conservatives never shy about throwing a wrench into his plans.
The next hurdle for the legislation — which is now officially titled the “One Big Beautiful Bill Act” in recognition of Trump — is a House Budget Committee markup on Friday morning.
And in a warning sign, Roy, who sits on the panel, said Thursday morning that he would not vote for it as things currently stood. There are enough members of the hardline House Freedom Caucus on the Budget Committee to block the bill from advancing if they band together.
Johnson, though, expressed optimism about the situation and said he was “encouraged” by Thursday’s meeting. Lawmakers leaving the huddle said they were waiting for updated budget estimates from the Congressional Budget Office and negotiations would likely extend through the weekend.
“We are still on path to pass this bill next week, to have it on the floor,” Johnson said. “That’s always been the plan, and I don’t see anything that would impede that right now.”
