Republican lawmakers in the U.S. House cleared a major hurdle in their effort to pass a sweeping federal budget bill. Last week, three key House committees advanced proposals that would lock in key tax cuts and reform federal spending. Last night, the House Budget Committee advanced the bill which includes those proposals, setting the stage for a floor vote ahead of the Memorial Day recess.

 

The House Ways and Means Committee approved its portion of the bill after a lengthy markup, backing measures that would make permanent several provisions of the 2017 Tax Cuts and Jobs Act. These include preserving lower individual and business tax rates, expanding the small business deduction, restoring full expensing for capital investments, and renewing R&D tax incentives – priorities that the PA Chamber strongly supports.

 

Also included in the package were efforts to raise the 1099 reporting threshold from $600 to $2,000, aimed at reducing paperwork burdens for gig workers and small businesses. Family-friendly tax credits – such as an expanded Child Tax Credit and changes to overtime and tip taxation – also advanced, with Republicans arguing these would increase household spending power.

 

Meanwhile, the House Energy and Commerce Committee separately approved a proposal to tighten Medicaid eligibility by eliminating waste, fraud, and abuse and save $715 billion. The panel also debated other provisions related to drug pricing and broader healthcare costs during a more than 26-hour work session.

 

The House Agriculture Committee worked on changes to nutrition programs, including stricter work requirements for SNAP recipients and plans to shift more responsibility to states.

 

While Republicans used their majority to block all Democratic amendments, the path forward is not without intraparty challenges. Members from high-tax states like New York and New Jersey have voiced their objection to the bill’s cap on the State and Local Tax (SALT) deduction, while fiscal conservatives are pushing for even deeper spending cuts. The bill now moves to the full House.

 

Republicans are aiming to pass the full reconciliation package – one that avoids a Senate filibuster and requires only a simple majority – by the end of May. The legislation would also raise the debt ceiling by $4 trillion, with the Treasury warning that action is needed by mid-July to avoid default.