By David Morgan
MIAMI (Reuters) – A three-day meeting of U.S. House Republicans, meant to jumpstart President Donald Trump’s $4 trillion tax cut agenda, ended on Wednesday without a deal as party fiscal hawks refused to move ahead unless the plan reduced the $1.8 trillion federal deficit.
House of Representatives Speaker Mike Johnson called the meeting of his conference this week in the hope of reaching consensus on a budget blueprint while they huddled at Trump’s Doral resort in Miami.
The hardliners’ opposition — and concern about the nation’s growing $36 trillion debt, which Congress will need to act on this year — could block the tax cut plan in a House where Republicans hold a slim 218-215 majority that is expected to fall soon to 217 seats.
“The Republican Party has to stick together,” Trump told the group at the start of its meeting on Monday. “It’d be different if we had a … 30-person majority. But we don’t. We have to help leadership.”
With Republicans also holding a 53-47 Senate majority, Trump is pushing lawmakers to extend his 2017 tax cuts that are due to expire at the end of this year, provide funds to tighten border security, deport undocumented immigrants and bolster military spending. The cost of the tax extension alone would surpass $4 trillion, according to the Committee for a Responsible Federal Budget, a non-partisan think tank.
Trump has also called on Republicans to enact legislation to eliminate federal taxes on tips, overtime and Social Security benefits.
Republicans can currently afford to lose the support of no more than one House member if they want to pass the tax cuts over what is expected to be united Democratic opposition. This week’s meeting showed Republican opposition was wider spread.
The leader of the ultraconservative House Freedom Caucus warned that the plan could fall short of achieving enough savings to make a meaningful dent in the deficit, a key goal among fiscal conservatives.
“That will stop the process,” House Freedom Caucus Chairman Andy Harris told Reuters. “There’s a broad group of Republicans in the conference who believe we have to be very serious about deficit reduction.”
HARDLINERS FOCUSED ON DEFICIT
Harris said his roughly three-dozen Freedom Caucus members want a budget resolution that calls for a $3 trillion cut in federal government spending over the next decade, and that hardliners would oppose a plan that identified only half that number of cuts or less.
“That would show that we’re not really serious about deficit reduction,” Harris said.
The Freedom Caucus has repeatedly bucked party leadership over the past two years and just last month rejected a Trump demand to eliminate the federal government’s statutory debt ceiling before he took office.
But since he took office, Congress has taken Trump’s side on tough votes — most notably when 50 Republican senators voted to confirm former Fox News host Pete Hegseth as defense secretary in the face of widespread criticism of his personal conduct.
House Republicans have circulated options amounting to trillions of dollars in potential spending cuts to programs including Medicaid and government-sponsored health insurance under the Affordable Care Act.
Those possibilities have raised concerns among lawmakers who worry about the effects on services in their districts, including hospitals that rely on Medicaid funding.
“Before I agree to vote for a budget resolution, I want a better understanding of where these cuts are going to come from and how it will affect my district,” said Republican Representative Nicole Malliotakis. “I understand we all need to make tough decisions … but I don’t want New York to be disproportionately affected. This needs to be fair.”
House Democratic leader Hakeem Jeffries has blasted the Republican tax plans as “a contract against America” which he warned would hurt working families, the middle class, seniors and veterans and undermine the Medicaid healthcare program for the poor.
LIMITED OPTIONS
Trump has limited the options for Republicans by ruling out cuts to the Medicare and Social Security programs for the elderly — which represent about a third of the $6.75 trillion federal budget — leaving Republicans to consider cuts to Medicaid, government-subsidized healthcare under the Affordable Care Act and other alternatives.
“You can talk about specifics in Medicaid. You can talk about specifics in discretionary spending. But it’s really not going to be much when you consider the overall budget,” said Representative Rich McCormick, a deficit hawk.
Representative Blake Moore, a member of Speaker Johnson’s leadership team, predicted that Republicans would face frustration in trying to pay for a 2017 Trump tax cut extension costing more than $4 trillion over a decade.
“We want to offset that as much as possible. Getting to that sweet spot is going to be very, very difficult,” the Utah Republican said. “Republicans are going to be eternally frustrated that we can’t do more to make sure that we reduce our deficits.”
In fact, some say the current debate takes House Republicans into waters where they have not ventured before in recent memory.
“Getting it down to a consolidated list that we can all agree on – virtually to the single member – is something we haven’t historically done,” said Representative Darrell Issa.
“The problem is that everything we’re dealing with has a constituency.”
Some Republicans said the cost of the Trump agenda should be seen within a broad context of savings that would include revenues from Trump tariffs, his freeze on federal grants and loans, revenue gains from expanded fossil fuel production and anticipated economic and job growth.
Representative Tom Emmer, the chamber’s No. 3 Republican, dismissed the debate about spending cuts as preliminaries leading up to next month’s anticipated floor vote on a House budget resolution.
“We need to get everybody on board when the day comes to vote on something. Up until then, people can disagree. They can agree to disagree. They can push whatever agenda they think is best,” the Minnesota Republican said.
(Reporting by David Morgan; Editing by Scott Malone and Alistair Bell)
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