Dueling factions in the House Republican caucus are locked in behind-closed-doors fisticuffs over how to move forward on President Donald Trump’s tax plans.
According to a report in Politico, the infighting is even weighing on Speaker Mike Johnson’s goal of bringing forward a budget blueprint this week and raising fears that fiscal hardliners could wreck his ultimate objective of tabling “one big, beautiful bill” that addresses border policy, energy, and national security in addition to taxes.
To one side are GOP fiscal hardliners—including Budget Chair Jodey Arrington (R-TX) and Rep. Chip Roy (R-TX)—who want billions more in controversial spending cuts than are currently on the table. They have also argued for changes to the tax-writing Ways and Means Committee’s ability to up the federal deficit.
On the other side are Ways and Means Chair Jason Smith (R-MI) and Republican leaders—according to Politico, last month Smith floated a $5.5 trillion figure for the deficit when Republican lawmakers gathered for a retreat in Doral, Florida.
That accounted for plans to extend Trump’s 2017 tax cuts and adopt his campaign promises like making overtime pay and tips free from federal income tax.
But, amid pushback from Arrington, Roy, and their fiscal hardliner allies, the House GOP settled on a more modest $4.7 trillion proposed figure last week, Politico reported.
However, that would leave Republicans without the necessary wiggle room to implement any of Trump’s tax policies apart from the extension of the tax cuts from his first administration.
“There will absolutely have to be trade-offs,” Republican strategist Liam Donovan told Politico. “You simply can’t fit it all into that.”
The 2017 tax cuts, which House Republicans have agreed to extend, cost $4.6 trillion, according to congressional officials.
Arrington told reporters last week that there were only two approaches to resolving the gap, leaving no room for negotiating on the deficit: “You got the tax dial and you got the spending reduction dials.”
His posturing, Politico reported, has set off anger within Republican ranks who fear their plans are at risk of jeopardy.
“Roy and Arrington will make the tax cut portion not passable,” an anonymous Republican congressperson told the outlet, who worried the party would then be forced deal with Democrats to try and strike a deal in the absence of cooperation from fiscal hardliners.
There’s also anger brewing over the risk their maneuvering poses to Trump’s desired “big, beautiful bill”—a phrase Johnson has repeatedly echoed and promised to pass in a single reconciliation package before Memorial Day.
Many GOP lawmakers in the Senate prefer a different strategy consisting of two bills—one that would package border, national security, and energy policy into one bill and taxes in another to follow.
The fiscal hardliners in the House have used that to their advantage. Politico reported Roy, Freedom Caucus Chair Andy Harris (R-MD) and fiscal hardliner allies have established a back channel to Senate Budget Chair Lindsey Graham (R-SC), who unveiled a budget plan consisting of two bills on Friday.
