House Republicans face a Memorial Day deadline crisis as deep divisions over SALT deductions and Medicaid reforms threaten to derail President Trump’s budget reconciliation package.
At a Glance
- House Republicans are divided over SALT deduction caps and proposed Medicaid reforms in Trump’s “big beautiful bill”
- The SALT Caucus, representing high-tax states, demands lifting the SALT deduction cap
- Freedom Caucus members insist on significant deficit reduction through Medicaid reforms
- Key committees, including Ways and Means and Energy and Commerce, have not reached consensus
- Internal divisions threaten to miss the Memorial Day deadline for passing a reconciliation package
Deepening Divisions Within GOP Ranks
House Republicans find themselves increasingly fractured over President Trump’s proposed budget reconciliation package. Representatives from high-tax states like New York are clashing with fiscal conservatives over State and Local Tax (SALT) deduction caps and Medicaid reforms. These divisions reflect deeper tensions between regional interests and the party’s broader fiscal objectives, with Republicans from traditionally Democratic-leaning states pushing for tax relief that would benefit their constituents while others focus on deficit reduction.
The SALT Caucus, including Representatives Nicole Malliotakis (R-N.Y.), Andrew Garbarino, and Young Kim, has emerged as a powerful voting bloc advocating for lifting the SALT deduction cap implemented by the 2017 Tax Cuts and Jobs Act. Meanwhile, the House Freedom Caucus maintains that significant Medicaid reforms are essential for meaningful deficit reduction. This standoff has stalled progress in key committees including House Energy and Commerce and Ways and Means.
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Conflicting Proposals on Medicaid Reform
House Energy and Commerce Chair Brett Guthrie has proposed substantial Medicaid reforms that directly conflict with Speaker Mike Johnson’s publicly stated position. These reforms could potentially leave millions of Americans without healthcare coverage, adding significant political strain to already tense negotiations. While most Republicans agree on limited reforms such as federal work requirements and more frequent eligibility checks, these modest changes fall far short of the spending reductions demanded by fiscal conservatives.
“I just don’t think you get the necessary deficit reduction without keeping a lot of things on the Medicaid table,” said Rep. Andy Harris, R-Md.
Adding to the pressure, a group of 31 House Republicans recently issued a warning against diluting budget cuts, insisting on strict adherence to the House framework. This ultimatum further complicates Speaker Johnson’s efforts to build consensus. The House Freedom Caucus, still a formidable force, insists that significant deficit reduction must remain central to any reconciliation package, with Medicaid reforms being a crucial component of their fiscal strategy.
Speaker Johnson’s Balancing Act
Speaker Mike Johnson finds himself in a precarious position, attempting to balance competing demands within his narrow majority. His leadership is already being tested by these divisions, reminiscent of the challenges that ultimately led to former Speaker Kevin McCarthy’s removal. Johnson has taken a cautious approach, deferring to committee chairs while emphasizing the need for consensus-building across all factions of the Republican conference.
“He’s the chairman, they’re working through it. I said likely for a reason because it’s not a final decision. At the end of the day, I defer to my chairs, but we’ve got to build consensus around all the ideas,” said House Speaker Mike Johnson.
The situation is further complicated by the Senate’s preference for a more moderate package, creating a challenging path forward even if House Republicans can resolve their internal differences. With limited legislative days before the Memorial Day deadline, Johnson faces mounting pressure to produce results while keeping his fractious caucus united. The reconciliation process, which allows passage with a simple majority in the Senate, adds urgency to reaching an agreement.
Historical Context of GOP Divisions
These current divisions echo previous GOP fractures that have hampered legislative progress. Last November, a similar revolt by GOP hardliners forced an early Thanksgiving break after blocking action on a 2024 spending bill and legislation concerning frozen Iranian assets. That protest came partly in retaliation for Johnson’s decision to proceed with a “clean” stopgap spending measure that passed with Democratic support to prevent a government shutdown.
The pattern of internal GOP conflict threatens to undermine President Trump’s legislative agenda and highlights the enduring challenge of governing with a slim majority. With representatives answering to diverse constituencies and navigating complex regional economic interests, finding common ground on fiscal matters continues to test Republican unity. The outcome of these negotiations will likely set the tone for budget discussions throughout the remainder of the congressional term.
