From left to right, Chase Christie, development director for Alaska Solar LLC, Josh Craft, managing partner of Wasilla, Alaska-based Crafty Energy LLC, and Josh Shipley, owner of Alternative Power Enterprises in Ridgeway, Colorado, at the Holiday Inn Express on C Street SW in Washington, D.C., on Wednesday, June 11, 2025, after meeting with staff of U.S. senators about preserving clean energy tax credits in the Republican budget reconciliation bill. (Ashley Murray/States Newsroom)

WASHINGTON — Small business owners and community leaders from rural regions in Western states including Alaska, Colorado, Iowa, Montana, Nebraska, South Dakota and Utah pressed lawmakers on Capitol Hill this week to preserve clean energy tax credits on the chopping block in the Republicans’ “one big beautiful” mega-bill, now in the Senate.

The suite of investment, production and residential tax credits enacted and expanded under the Democrats’ own big budget reconciliation bill in 2022, titled the “Inflation Reduction Act,” incentivized homeowners, car buyers, energy producers and manufacturers to invest in types of energy beyond fossil fuels, with the aim of reducing the effects of climate change.

The credits have spurred hundreds of billions in investment dollars in advanced manufacturing and production since 2022, and contributed to job creation, largely in states that elected President Donald Trump to a second term.

Small business operators and community leaders from rural and mountainous areas of the United States that have benefited from the boom in alternative energy sources say the campaign to end the tax credits will also cause job losses and cut options for consumers.

Solar projects in Alaska

Chase Christie, director of development for Alaska Solar LLC, said his company installs four to five large-scale solar projects per year in remote Alaskan villages and also fits and services smaller residential solar installations.

“They take a lot of planning, a lot of logistics,” Christie told States Newsroom in an interview Wednesday.

“For going into a remote village where there’s tundra, we might need to go there in the dead of winter so we can work on frozen ground,” he added. “Other places we won’t go until summer. So we have these large gaps in between these larger projects, and a company like ours absolutely relies on the residential installations to keep our workforce going.”

Christie, who met Tuesday with staffers for Alaska’s Republican Sens. Lisa Murkowski and Dan Sullivan, said in January he let a handful of workers go and paused most new hiring.

“Our workforce is roughly half of what it usually is just because we’re not sure which direction things are going to go,” he said.

Christie was among a dozen small energy business owners, municipal government officials and nonprofit employees focused on energy options for low-income households who States Newsroom spoke to Wednesday.

A spokesperson for Sullivan said in a statement: “Senator Sullivan supports energy projects that lower costs for Alaska. The Senator and his team have been meeting with a number of Alaskans about energy tax credits. As we wait for text from the Senate Finance Committee, the Senator is working with his colleagues to ensure that the bill strikes the right balance between promoting stable and predictable tax policy, advancing projects that benefit Alaska, and addressing the need to reduce the federal deficit.”

Murkowski’s office did not immediately respond to a request for comment.

Elimination of tax credits

Senators are hashing out language for the massive Republican agenda bill that will extend and expand the 2017 tax law, costing roughly $3.8 trillion, and cut spending in other areas to offset the price tag.

A contingent of House Republicans, who have dubbed the tax credits the “green new scam,” won on accelerating the expiration of the energy tax credits and tightening restrictions on eligibility as a way to pay for individual and corporate tax cuts that Trump campaigned on.

The language in a section of the House bill, passed 215-214 on May 22, titled “Working Families Over Elites,” terminates the Energy Efficient Home Improvement Tax Credit, worth up to $3,200 for homeowners who make energy upgrades to their property.

Among the slate of other affected IRA tax credits, the House bill also speeds up the expiration of the Clean Electricity Investment Tax Credit, a credit dating back decades that was updated in 2022.

The credit is available to taxpayers who invest in “energy property,” including solar installations to provide electricity and heat, fuel cells, small wind turbines, geothermal pumps, and other electricity-producing technologies. 

House Republicans wrote provisions to eliminate the credit for facilities placed into service after 2028 and end eligibility for projects that don’t begin construction within 60 days of the bill’s enactment.

The credit is worth up to 30% of the cost of the project, plus two bonus credits up to 10% each if the project includes mostly domestically produced material and if it’s located in an “energy community,” meaning a place where a coal plant has closed or where unemployment reaches a certain threshold.

The bill also repeals a taxpayer’s ability to transfer the tax credits as a way to finance a project, and introduces restrictions on foreign-made components that industry professionals say essentially makes the credit unworkable.

Critics point to the cost of the tax credits.

The nonpartisan Committee for a Responsible Federal Budget estimated, as of June 4, the elimination of the clean energy investment and production tax credits will save roughly $249 billion over the next decade.

Alex Muresianu, senior policy analyst at the Tax Foundation, a right-of-center think tank that advocates for lower taxes, said Thursday in a new analysis that “The final House bill makes impressive cuts to the IRA green energy tax credits, but it does so in part by introducing more complexity.”

The group is advocating for senators to reduce the tax credit rates and make clearer complicated language, like the provision around “foreign entities of concern.”

Keeping on the heat during a Montana winter

But Logan Smith, weatherization program manager for the Human Resource Development Council in central Montana, argues the credits have been a lifeline for lower-income rural residents.

“If I can get solar panels on each of the clients’ homes, that means that their power is going to stay on in the middle of winter,” Smith said. “Because every winter we plan for losing power for about a week, that’s just something we grew up with. … But if we have solar panels, the power stays on, the heat stays on.”

Ralph Waters, owner of SBS Solar in Missoula, Montana, became emotional when talking about how an early termination of the tax credits could slow his business and result in having to lay off half his workforce.

He criticized the politicization of the tax incentives.

“Montana is deeply red, but it’s also a very practical place. And so green energy renewables becomes a taboo phrase somehow,” Waters said. “The practical energy needs are undeniable, and so if we can get past our disagreements about the phraseology and realize that it’s electrons, watts, and amps. And it’s cheaper.”

The offices of Montana GOP Sens. Steve Daines and Tim Sheehy did not respond to a request for comment.

U.S. Army soldiers work on an assortment of M1 Alpha a3 Abrams tanks, stryker armored vehicles, and M2 Bradley fighting vehicles at West Potomac Park along the Potomac River on June 11, 2025 in Washington, D.C. Tanks and other heavy military equipment have arrived in the nation's capital for a military parade in honor of the U.S. Army's 250th anniversary, which coincides with President Donald Trump's birthday and Flag Day. (Photo by Andrew Harnik/Getty Images)

WASHINGTON — More than 100 heavy-duty military vehicles and weapons systems will parade down Constitution Avenue in the nation’s capital Saturday, just days after President Donald Trump ordered troops to Los Angeles to quell mostly nonviolent protests against deportations.

The display, on the date of the U.S. Army’s 250th anniversary and Trump’s 79th birthday, will feature roughly 6,700 soldiers from every division, 150 vehicles, 50 aircraft, 34 horses, two mules and one dog, at a price tag in the tens of millions of dollars, according to the Army.

The evening parade of Army vehicles and aircraft flyovers — plans for which came to light in early May — will occur as protests against the administration’s immigration raids spread through major U.S. cities.

Trump ordered 2,000 California National Guard troops to Los Angeles Sunday after demonstrations opposing Immigration and Customs Enforcement arrests erupted Friday, some turning violent over the weekend in downtown LA, a suburb and a portion of a freeway.

Trump ordered another 2,000 National Guard troops and 700 Marines to LA Monday, despite numerous reports that protests remained peaceful.

Saturday’s parade in D.C. has drawn criticism for the cost and optics, as Republicans on Capitol Hill seek ways to cut safety net programs, and as Trump deployed troops to LA, defying the state’s Democratic Gov. Gavin Newsom.

Trump told reporters Tuesday in the Oval Office that any protests at the Army parade “will be met with very heavy force.”

When pressed Wednesday by a reporter following up on Trump’s comment, White House press secretary Karoline Leavitt said, “Of course the president supports peaceful protest. What a stupid question.”

Mass “No Kings” protests organized by a coalition of liberal national groups and labor unions are planned across the United States Saturday, but deliberately not in D.C. Some actions from separate organizations are expected to crop up in the nation’s capital, though details are sparse.

Army equipment stored in Maryland

Tanks and fighting vehicles were transported into the District of Columbia Tuesday night on flatbed trucks, as shown in video circulating online. The equipment rolled in over the weekend by rail from Texas and had been staged at the CSX rail yard in Jessup, Maryland, according to the Army.

A festival to celebrate the Army’s founding in 1775 has been in the works for more than a year and will feature a wreath-laying at Arlington National Cemetery as well as a fitness competition, military equipment exhibits, food trucks and appearances by professional NFL players on the National Mall. 

But details of a parade only emerged in April and were confirmed in early May by The Associated Press.

According to a March 31 application obtained by WTOP News, America250.org applied for a permit for the parade along the National Mall, as well as nighttime fireworks and concert “featuring well known performers, likely from the country music world.” 

A press release for the event from America250, described as the “nonprofit supporting organization to the U.S. Semiquincentennial Commission,” celebrates Trump and his role. “Under President Trump’s leadership, the U.S. Army has been restored to strength and readiness,” it says. “His America First agenda has delivered historic pay raises for service members, rebuilt military stockpiles, invested in cutting-edge technologies, and ensured our soldiers have the tools and support they need to win on any battlefield.” The pay raises were part of last year’s defense policy bill, before Trump’s presidency.

The festival and the parade will cost an estimated $25 million to $45 million, according to Army spokesperson Heather Hagan, though the price tag for the parade alone was not specified. The Army did not respond to a question about where the funds originated.

It is not the first time Trump has wanted a military parade. He had planned one in the nation’s capital in 2018 but it was called off due to the cost, NBC reported at the time.

Big crowds and lots of fencing

Matt McCool, of the U.S. Secret Service Washington field office, said for this parade, officials are expecting an “enormous turnout.” The agency is leading local, state and federal law enforcement during the National Special Security Event, the sixth for D.C. this year. They are nationally or internationally significant events expected to be attended by high-level officials and large numbers of people.

Just over 18 miles of anti-scale fencing and 17 miles of “bike rack”-style fencing has been erected as a security perimeter surrounding the parade route. Members of the public wishing to see the parade will have to pass through one of the 175 metal detectors at three security checkpoints.

McCool, special agent in charge of the Washington office, said the Secret Service has been planning security since April 22, “which is shorter than normal,” and that the agency is prepared for protests.

“We are paying attention obviously to what is happening (in Los Angeles) and we’ll be ready for that if it were to occur here,” McCool said Monday during a press conference.

Troops bunking in federal office buildings

The parade will include troops from the National Guard and Army Reserve, Special Operations Command, United States Military Academy and Reserve Officer Training Corps, and it will feature period uniforms and equipment reflecting the Revolutionary War to the modern forces.

Young enlistees sent to Washington to march in the parade toured the D.C. sites near the U.S. Capitol Wednesday.

Not every state sent Guard members. But the New York National Guard will participate, and will house roughly 460 New York and Massachusetts National Guard soldiers in an empty Department of Agriculture office building and an unused General Services Administration warehouse until June 15, according to a press release.

The troops were bused to Washington on Wednesday, and the trip cost — including meals ready-to-eat for breakfast and lunch, a hot dinner and a $69 per diem — will be covered by the Army.

Golden Knights to give Trump a gift

Flyovers will also occur during the parade featuring AH-64 Apaches, UH-60 Blackhawks and CH-47 Chinooks.

The Army Golden Knights parachute team is expected to land on the White House South Lawn and present Trump with a folded flag, according to media reports. Trump is expected to deliver remarks, according to the America250 organization. The White House did not respond to questions about the day’s timeline.

Among the vehicles and equipment rolling down Constitution Avenue between 15th and 23th streets will be Abrams tanks, first used in 1991 for Operation Desert Storm; High Mobility Artillery Rocket Systems, or HIMARS, used to launch multiple rockets at precise aim from far distances; and 9,500-pound titanium M777 lightweight Howitzers that fire 105-pound shells up to 24 miles and are currently in use on Ukraine’s battlefields.

The Army Corps of Engineers released footage of 18-by-16-foot metal plates installed on D.C. streets to reinforce the roads prior to the massive vehicles driving over them.

D.C. Mayor Muriel Bowser said in early June that she “remains concerned” about damage to the city’s streets.

“But I gotta think that the Army is among the most qualified logistics moving agencies in the world. They have moved equipment in more precarious situations, so we’re relying on their expertise. But what I can tell D.C. residents is that we will try to keep our road network usable, and if we have to fix something we will seek reimbursement from the Feds,” Bowser told reporters at a June 3 press conference. 

Left to right, Secretary of State Marco Rubio, President Donald Trump and Secretary of Defense Pete Hegseth attend a Cabinet meeting at the White House on April 30, 2025 in Washington, DC. (Photo by Andrew Harnik/Getty Images)

WASHINGTON — President Donald Trump’s emergency tariffs can go forward while the administration fights to overturn a lower court’s trade decision that ruled the global import taxes unlawful, according to a U.S. appeals court order late Tuesday.

The two cases filed by a handful of private businesses and a dozen Democratic state attorneys general will be consolidated and heard by a full panel of active circuit court judges in July, according to the four-page order from the U.S. Appeals Court for the Federal Circuit.

Democratic state attorneys general who brought the suit represent Arizona, Colorado, Maine, Minnesota, Nevada, New Mexico and Oregon.

The court “concludes that these cases present issues of exceptional importance warranting expedited en banc consideration of the merits in the first instance,” according to the order.

A hearing is scheduled for July 31 in Washington, D.C.

Trump rocked global markets when he imposed the wide-reaching levies on nearly every country on April 2 under an unprecedented use of the 1977 International Emergency Economic Powers Act, or IEEPA. The president walked them back just seven days later, announcing a 90-day pause on staggering tariffs that reached nearly 50% on some major U.S. trading partners.

The U.S. Court of International Trade struck down Trump’s emergency tariffs May 28. The following day, the appeals court temporarily restored the tariffs. 

A worker installs a solar panel on a roof. (Getty Images)

WASHINGTON —  Clean energy manufacturers and advocates say they’re perplexed how the repeal of tax credits in President Donald Trump’s “one big beautiful bill” will keep their domestic production lines humming across the United States, particularly in states that elected him to the Oval Office.

While some Republicans have labeled the billions in tax credits a “green new scam,” statistics reviewed by States Newsroom show the jobs and benefits would boost predominantly GOP-leaning states and congressional districts. Now the industry is already slowing amid Trump’s back-and-forth tariff policy and mixed messaging on energy and manufacturing.

Trump vowed in early April that he would “supercharge our domestic industrial base.”

“Jobs and factories will come roaring back to our country, and you see it happening already,” he told a crowd in the White House Rose Garden while unveiling his new trade policy.

But as a way to pay for the $3.9 trillion price tag of extending and expanding the 2017 corporate and individual tax cuts, U.S. House Republicans found billions of dollars in savings by slashing over a dozen clean energy tax credits enacted in the 2022 Inflation Reduction Act under President Joe Biden.

Critics say the mega-bill, which passed the GOP-led House on May 22 in a 215-214 vote, would effectively strip away the Advanced Manufacturing and Production Credit and other incentives.

They have bolstered the production of batteries and solar components in numerous states — top among them North Carolina, Georgia, Michigan, South Carolina, Indiana, Tennessee, Texas, Nevada, Illinois and Oklahoma, according to the Clean Investment Monitor, a joint project by the Rhodium Group and the Massachusetts Institute of Technology’s Center for Energy and Environmental Policy Research.

U.S. senators are now negotiating the massive budget reconciliation legislation.

Kevin Doffling, CEO and founder of Project Vanguard, an organization that connects veterans to clean energy jobs, warned pulling the plug on the clean energy tax credits will stifle progress the U.S. has made against other countries, namely China.

“We’re just going to see a huge pullback from investments inside of advanced manufacturing here in the U.S., and then we’ll go source it from other places, instead of doing it here,” Doffling said on a May 28 press call pressing for senators to protect the tax credits.

Doffling’s organization works in several states, including Arizona, Colorado, Indiana, Minnesota, Washington and Utah.

Moving away from fossil fuels

The suite of tax credits enacted under the IRA incentivized homeowners, car buyers, energy producers and manufacturers to invest in types of energy beyond fossil fuels, with the aim of a reduction in the effects of climate change.

For example, the IRA’s Advanced Manufacturing and Production Credit is awarded per unit produced and sold, and in some cases the capacity of energy output. 

Battery cell manufacturers can earn up to $35 per battery cell multiplied by potential kilowatt hours. In the case of solar, the credit offers producers 7 cents per solar module multiplied by wattage output. For mining operations extracting critical minerals, such as lithium, companies can receive a 10% tax break on the costs of production.

Most credits phase out by 2032 under the Biden-era law, except those for critical mineral mining, which continue.

A group of House Republicans, who have dubbed the tax credits the “green new scam” — echoing Trump’s rhetoric — pushed to accelerate the expiration in the final version of the mega-bill, even for critical mineral mining and production. The federal government classifies critical minerals as crucial to national security.

The House-passed bill also severely tightens language around foreign components, titled “foreign entities of concern,” making the credit practically unusable as many parts of the clean energy manufacturing supply chain are global, industry professionals say.

The legislation also repeals “transferability,” which allows companies with little or no tax liability to sell the credits.

For example, a critical mineral mining company would not turn a profit during an initial phase and could sell the credits to offset the cost of operations.

Schneider Electric, a global corporation with a U.S. base in Massachusetts, has facilitated 18 transfer deals worth $1.7 billion in tax credits for U.S. companies since 2023. In a statement, Schneider said the deals “reflect growing market interest in flexible financing mechanisms that directly fund renewable projects.”

Silfab Solar, which recently built a solar cell manufacturing and module assembly plant in Fort Mill, South Carolina, announced in mid-May the sale of $110 million in Advanced Manufacturing and Production Credits to help fund its expansion. The company already runs a solar manufacturing site in Burlington, Washington.

Investment soared

Spurred by the Advanced Manufacturing and Production Credit, known as 45X, actual investment in clean energy manufacturing since August 2022 reached $115 billion in April, up from $21 billion over the same length of time prior to the IRA, the Clean Investment Monitor found.

Of the 380 clean technology production facilities announced since the third quarter of 2022, 161 are now operational, according to CIM data.

The credit spurred a “sea change” in U.S. clean energy manufacturing, said Mike Williams, senior fellow at the liberal Center for American Progress and former deputy director of the BlueGreen Alliance, which advocates for the joining of labor and environmental organizations.

Despite solar technology’s roots in the U.S., the nation “didn’t even have a toe” in solar manufacturing, Williams said. Other countries, most notably Germany and then China, have dominated the industry.

“But after the Inflation Reduction Act passed, all of a sudden we see panel manufacturing, we see parts and components manufacturing, absolutely exploding. Plants have announced and started construction in Georgia, in Oklahoma,” Williams said in an interview with States Newsroom.

Active manufacturing of solar components, advanced batteries and wind turbines and vessels is concentrated in rural areas. Most are located in states that went red in the 2024 presidential election, according to the Clean Power America Association’s May 2025 State of Clean Energy Manufacturing in America report.

The renewable energy policy group estimated the industry supports 122,000 full-time manufacturing jobs across the U.S.

Active solar manufacturing sites and expansions are clustered in Texas, Ohio and Alabama, according to data from the association. Should major project announcements in Georgia pull through, the state would surpass Alabama for third place.

Advanced battery manufacturing spans 38 states, with the largest concentrations in California, Michigan and North Carolina.

But various parts of the battery production process stretch throughout the country — for example, battery cell production in Nevada and Tennessee and module production in Utah. Other supporting hardware is made in South Carolina, Arizona and Texas.

Lithium, a critical mineral for battery production, is currently mined in Nevada and California. And investors are eyeing other spots in the U.S., namely Alaska, to mine and produce graphite, another critical mineral.

China largely dominates the world’s critical mineral supply chain, according to U.S. Geological Survey data for 2024.

When accounting for the full suite of clean energy tax credits that were enacted in 2022 — including residential, electric vehicles and clean electricity credits — just over 312,900 new jobs are linked to the industry, the bulk in Republican-led congressional districts, according to the advocacy group Climate Power’s 2024 report on clean energy employment.

Troy Van Beek, CEO and founder of the Iowa-based solar company Ideal Energy, said his business weathered the pandemic and has been able to add jobs, but is now facing uncertainty again.

“​​We’re getting our feet under us and really starting to operate. I went from 20-some jobs to over 60 jobs, and those are good-paying jobs for people and their families. So we need that stability in the industry,” said Van Beek, who spoke on the call with Doffling.

“What troubles me is the rocking of the boat to such a degree that we can’t get anything done, and that’s been very difficult to deal with,” he said.

Industry slowdown

The industry has seen a pullback since January and the beginning of the Trump presidency.

Six announced projects representing $6.9 billion in investment were canceled in the first quarter of 2025, according to the Clean Investment Monitor’s latest State of U.S. Clean Energy Supply Chains report. While investment in clean energy overall continues to grow, the beginning of 2025 shows a slowdown from where the industry was a year ago.

Van Beek, whose solar company provides construction and installation among others services, said recent talks to strike a deal with a solar manufacturer collapsed after threats to the tax credits.

“We had worked an entire year on putting together (a deal) with one of the leading manufacturers in the world that has U.S. manufacturing to actually have joint ventures and work with them on projects,” Van Beek said. “And when this came up, that deal came to a screeching halt.”

Van Beek did not name the company on the call and did not respond to a request for a follow-up interview.

Several companies declined States Newsroom’s requests for comment while senators negotiate the bill.

Spencer Pederson of the National Electrical Manufacturers Association said the unpredictability is interrupting how operators are planning for the coming years.

“Whether large or small, just the business certainty and the ability to plan out your business is disrupted when you have any type of tax mechanism that is abruptly halted when you’re doing business planning at five- or 10-year intervals,” said Pederson, the association’s senior vice president of public affairs.

Too expensive, Republicans say

Some House Republicans, led by Rep. Jen Kiggans of Virginia, urged party colleagues to protect the clean energy tax credits — for example by removing the “overly prescriptive” restrictions on foreign entities of concern and keeping in place transferability of tax credits.

Kiggans wrote to House Republican tax writers in mid-May that “the last thing any of us want is to provoke an energy crisis or cause higher energy bills for working families.”

Her co-signers included Don Bacon of Nebraska, Mark Amodei of Nevada, Rob Bresnahan of Pennsylvania, Juan Ciscomani of Arizona, Gabe Evans and Jeff Hurd of Colorado, Dave Joyce of Ohio and Dan Newhouse of Washington, who all eventually voted for the final bill.

Far-right House members won on not only shortening the lifespan of the credits, but also on keeping the restrictive foreign entity language and on repealing a company’s ability to transfer credits.

The right-leaning National Taxpayers Union hailed the “commonsense changes” championed by the far-right House Freedom Caucus, under the leadership of Maryland Rep. Andy Harris.

The organization, which favors cutting government spending and lowering taxes, pointed to the cost. According to the Penn Wharton Budget Model, the credits as of 2022 were valued at roughly $384.9 billion over ten years.

“The longer these subsidies remain in law, the more expensive they will become and the harder it will be for Congress to remove them. Now it’s up to the Senate to support the Green New Deal Rollbacks,” Thomas Aiello, NTU’s senior director of government affairs, wrote in the days following the House vote.

Hope in the Senate?

But representatives from multinational corporations to mid-size businesses and sizable trade associations are now looking to the U.S. Senate to restore measures that they say created a boom time for investment, production and new energy on the grid.

Jeannie Salo, chief public policy officer at Schneider Electric, said in a statement to States Newsroom that “The Senate should restore and extend the timelines for key energy and manufacturing credits and their transferability to ensure the nation continues to attract key investments and projects that will power the U.S. economy and help make energy more affordable.”

Pederson said the restrictions on foreign components and company ties are “particularly restrictive coming out of the House.”

“So we’re hoping to work with the Senate Finance Committee and some of the members of the Senate who have indicated some willingness to make the foreign entity of concern language a little bit more workable,” Pederson said.

Doffling believes senators have a “longer term vision” of the nation’s energy strategy than House members who face reelection every two years.

“They see what’s happening not just in their district, but in the entire state that they represent,” Doffling said.

The House bill just sets the U.S. “further behind,” he added. “This bill is all about going backwards in time and hoping for the best.”

“I wish they could look at the numbers and understand the economic impacts it’s gonna have. … But somehow we’re talking about the fact of hamstringing a whole entire industry itself over verbiage of the word ‘clean.’”

New Nissan cars are driven onto a rail car to be transported from an automobile processing terminal located at the Port of Los Angeles on April 3, 2024, in Wilmington, California.  Tariffs are being levied by President Donald Trump on most foreign vehicles and auto parts.  (Photo by Mario Tama/Getty Images)

WASHINGTON — President Donald Trump’s tariffs would decrease the deficit over the next decade but overall shrink the U.S. economy and raise costs for consumers, according to a Congressional Budget Office analysis released Wednesday.

Tariffs are paid to the U.S. government by domestic companies and purchasers who buy goods from abroad.

The nonpartisan CBO found that tariffs would reduce the nation’s primary deficit by $2.5 trillion from now until 2035, plus an additional $500 million saved from avoiding even more mounting interest payments on the U.S. debt.

But the office also found that tariffs would slow down the U.S. economy over the same time, in part by affecting behavior in the private sector.

For example, businesses may pull back from investment and growth when faced with higher costs. The CBO, the official financial scorekeeper for Congress, estimates that Trump’s tariffs, as they stand now, would lower the U.S. gross domestic product, or the total value of a country’s goods and services, on average by 0.6% per year through 2035. 

In addition to increasing costs on supplies and other assets businesses use in production, the tariffs are expected to raise prices on consumer goods in the next couple years. The CBO projects the price index used to measure personal consumption will be 0.9% higher by the end of 2026.

While lower-income households spend a higher percentage of their income on consumer goods, the CBO projects that prices will increase the most on goods like home appliances and vehicles more likely to be purchased by higher earners.

The eight-page analysis only takes into account the effects of Trump’s tariffs as of May 13. These include the following taxes calculated on the value of imports: a baseline 10% on goods from most countries; a base of 30% on all goods from China and Hong Kong; 25% on most foreign vehicles and auto parts; 25% on steel and aluminum; and 25% on certain goods from Canada and Mexico.

The CBO released the figures in response to a request from U.S. Senate Democrats wanting to know the cost of the administration’s import taxes.

The report did not take into account any tariff changes after May 13, including Trump’s doubling to 50% the import taxes on steel and aluminum. The report also did not factor in changes that could result from a May 29 trade court decision striking down most of Trump’s tariffs — though an appeals court swiftly left them in place while the case plays out. 

Then-U.S. Rep. Billy Long speaks during a press conference on Feb. 22, 2022, in Jefferson City, Missouri. (Madeline Carter/Missouri Independent)

WASHINGTON — Republican U.S. Senate tax writers voted Tuesday to move Missouri Republican former Congressman Billy Long one step closer to taking the reins at the Internal Revenue Service, despite protests from Democrats over his alleged involvement with a company that peddled fake tribal tax credits.

Members of the Senate Committee on Finance advanced Long’s nomination along party lines, 14-13, to the full Senate as the revenue collection agency faces the possibility of a more complex tax code as congressional Republicans are poised to extend and expand President Donald Trump’s 2017 tax cuts.

Senate Finance Chair Mike Crapo said Tuesday that Long presented a “vision to transform the IRS through systems modernization, a renewed focus on efficiency and a much-needed change in IRS culture” during his May confirmation hearing. 

“If confirmed, I look forward to working with him to ensure the IRS focuses on helping American taxpayers to better understand and meet their tax responsibilities, and that it enforces the law with integrity and fairness to all,” the Idaho Republican said.

Sen. Ron Wyden, the committee’s top Democrat, slammed the nominee in remarks delivered ahead of the vote. Wyden said Long “has no tax policy experience, but he has lots of tax fraud experience.”

“When he left office, he threw in with a bunch of fly-by-night operators selling tax deals that were sketchy at best,” Wyden said.

Wyden highlighted contributions Long received to his dormant U.S. Senate campaign from officials at the Arkansas-based White River Energy Corps after revelations that Long was tied to the company and its sales of nonexistent tax credits.

The Oregon Democrat said Long’s “scandals here are too big to ignore.”

Long testified before the committee on May 20 and denied any wrongdoing.

Long, who served in the House from 2011 to 2023 and previously spent multiple years as a talk radio host, told lawmakers on the panel that he plans to get rid of “stinking thinking” at the IRS and implement a “comprehensive plan” to modernize the agency and “invest in retaining skilled members of the team.”

The agency has lost more than 11,000 employees, or 11% of its workforce, either through deferred resignations or mass firing of probationary workers since Trump began his second term, according to a May 2 report from the agency’s inspector general.

Trump announced Long as his pick for the IRS post in December. 

President Donald Trump speaks to supporters during a rally at the US Steel-Irvin Works on May 30, 2025, in West Mifflin, Pennsylvania. Trump signed an order Tuesday doubling tariffs on steel and aluminum, a policy he'd announced at the Pennsylvania event. (Photo by Jeff Swensen/Getty Images)

WASHINGTON — President Donald Trump signed a directive Tuesday doubling tariffs on steel and aluminum, marking another escalation in his on-and-off policy rocking global trade.

Trump announced the increased levies to 50%, up from 25%, on steel and aluminum Friday during a visit to U.S. Steel’s Irving plant in West Mifflin, Pennsylvania, just outside Pittsburgh. The president told the crowd he would hike the tariffs to “even further secure the steel industry in the United States.”

The increase will mark the second time since Trump’s second term began that he triggered national security duties on steel and aluminum, a major import into the U.S.

White House press secretary Karoline Leavitt confirmed during Tuesday’s daily press briefing that Trump would sign the directive Tuesday afternoon. The White House published the proclamation just before 5 p.m.

The move comes as the administration presses governments around the globe to strike new trade deals before a self-imposed deadline of July 9.

That’s when Trump’s staggering “liberation day” tariffs are set to kick in again, even as the U.S. International Trade Court ruled them unlawful. A federal appeals court restored Trump’s ability to impose them while the case proceeds.

The court order only applies to Trump’s tariffs triggered under a national emergency law, and not to tariffs imposed on national security grounds to protect certain industries — meaning the increase on steel and aluminum could go forth regardless.

Trump’s back-and-forth tariffs have been seen by some allies as strong-arming. Major trading partners including Canada and the European Union expressed disapproval of the significant price hike for U.S. companies that buy steel and aluminum imports from their producers.

The U.S. is the world’s largest steel importer with the bulk coming from Canada, according to figures from the U.S. International Trade Administration. The U.S. imported 26.2 million metric tons of steel in 2024 from 79 countries and territories, according to the administration.

Canadian Prime Minister Mark Carney spoke Friday to government officials from across the country about plans to “supercharge” Canada’s economy and shield against economic fallout from U.S. tariff rates.

Canada’s steel manufacturers warned Saturday that Trump’s tariff increase will cause “unrecoverable consequences” for the industry and urged retaliatory measures, according to a statement from the Canadian Steel Producers Association.

The EU told several media outlets Saturday the bloc is planning “countermeasures” on U.S. goods by mid-July if a trade agreement cannot be reached.

The EU and Canada threatened countermeasures in mid-March after Trump hiked import taxes on steel and aluminum to 25%. 

The U.S. Capitol building in Washington, D.C., is pictured on Wednesday, May 7, 2025. (Photo by Jennifer Shutt/States Newsroom)

This report has been updated.

WASHINGTON — The U.S. House early Thursday approved the “big, beautiful bill” that Republican leaders spent months negotiating with centrists and far-right members of the party — two distinct factions that hold vastly different policy goals — over intense opposition from Democrats.

The 215-214 vote ships the package to the Senate, where GOP lawmakers are expected to rewrite much of it, before sending it back across the Capitol for final approval, a process likely to stretch through the summer.

President Donald Trump, who said he backed the House version, would then need to sign the legislation, which under the complicated process being used by Republicans can pass with just a majority vote in the GOP-controlled Senate.

Trump called on the Senate to pass the legislation as quickly as possible, writing in a social media post that “(t)here is no time to waste” and that the bill is “arguably the most significant piece of Legislation that will ever be signed in the History of our Country!”

Speaker Mike Johnson said minutes before the vote that he expects lawmakers to give the measure final approval before the Fourth of July.

“Now, look, we’re accomplishing a big thing here today, but we know this isn’t the end of the road just yet,” Johnson, R-La., said. “We’ve been working closely with Leader (John) Thune and our Senate colleagues, the Senate Republicans, to get this done and delivered to the president’s desk by our Independence Day. That’s July 4. Today proves that we can do that, and we will do that.”

House Democratic Leader Hakeem Jeffries, D-N.Y., argued against the legislation, saying it “undermines reproductive freedom, undermines the progress that we have made in combating the climate crisis, undermines gun safety, undermines the rule of law and the independence of the federal judiciary. It even undermines the ability of hard-working and law-abiding immigrant families to provide remittances to their loved ones, who may just happen to live abroad.”

Jeffries raised concerns with how the proposals in the bill would impact the economy and the federal government’s financial stability.

“Costs aren’t going down. They’re going up. Inflation is out of control. Insurance rates remain stubbornly high,” Jeffries said. “Our Moody’s rating, our credit rating, has been downgraded, and you’ve got people losing confidence in this economy. Republicans are crashing this economy in real time and driving us toward a recession.”

Ohio’s Warren Davidson and Kentucky’s Thomas Massie were the only Republicans to vote against passing the bill, which members debated throughout the night prior to the vote just after daylight in the nation’s capital. All Democrats, who dubbed it “one big ugly bill,” were opposed. Maryland GOP Rep. Andy Harris, chairman of the Freedom Caucus, voted “present.”

Massie spoke against the bill overnight, calling it “a debt bomb ticking.”

“I’d love to stand here and tell the American people: We can cut your taxes and we can increase spending, and everything’s going to be just fine. But I can’t do that because I’m here to deliver a dose of reality,” Massie said. “This bill dramatically increases deficits in the near term, but promises our government will be fiscally responsible five years from now. Where have we heard that before? How do you bind a future Congress to these promises?”

White House press secretary Karoline Leavitt said during a briefing later in the day that Trump wants Davidson and Massie to face primary challenges next year during the midterm elections.

“I believe he does,” Leavitt said. “And I don’t think he likes to see grandstanders in Congress.” 

In the works for weeks

The 1,116-page package combines 11 bills that GOP lawmakers debated and reported out of committee during the last several weeks.

The legislation would:

• Extend the 2017 tax law, including tax cuts for businesses and individuals;
• Bolster spending on border security and defense by hundreds of billions of dollars;
• Rework energy permitting;
• Restructure higher education aid such as student loans and Pell Grants;
• Shift some of the cost of the Supplemental Nutrition Assistance Program food aid program for low-income Americans to state governments; and
• Overhaul Medicaid, the nation’s program for health care for low-income people and some people with disabilities.

The bill would make deep cuts to Medicaid spending, reducing the program by $625 billion over 10 years under the latest estimate by the Congressional Budget Office.

The budget measure would also raise the debt limit by $4 trillion.

A new Congressional Budget Office analysis released late Tuesday showed the package tilted toward the wealthy, projecting it would decrease resources for low-income families over the next decade while increasing resources for top earners.

Republicans hold especially thin majorities in the House and Senate, meaning that nearly every GOP lawmaker — ranging from centrists who barely won their general elections to far-right members who are more at risk of losing a primary challenge — needed to support the bill.

Balancing the demands of hundreds of lawmakers led to nearly constant talks during the last few days as Johnson struggled to secure the votes to pass the bill before his Memorial Day deadline.

Any deal Johnson made with far-right members of the party risked alienating centrist GOP lawmakers and vice versa.

An agreement finally came together Wednesday evening when GOP leaders released a 42-page amendment that made changes to various sections of the package, including the state and local tax deduction, or SALT, and Medicaid work requirements and nixed the potential sale of some public lands.

Tax cuts

House debate on the package fell largely along party lines, with Democrats contending it would benefit the wealthy at the expense of lower-income Americans, including millions who would lose access to Medicaid.

Republicans argued the legislation is necessary to avoid a tax hike at the end of the year, when the 2017 GOP law expires, and to curb government spending in the years ahead.

Ways and Means Chairman Jason Smith, R-Mo., said the tax section of the package would halt a tax increase for many that would have taken place after the vast majority of the provisions in that law expire at the end of this year.

“Working families, farmers and small businesses win with this bill,” Smith said. “We expand and make permanent the small business deduction and increase the child tax credit, the standard deduction and the death tax exemption.”

The legislation would increase the tax rate for colleges and universities with substantial endowments, which would match the corporate tax rate, he said.

Massachusetts Democratic Rep. Richard Neal, ranking member on that tax-writing committee, said the legislation would lead the United States to “borrow $4 trillion and with interest payments over the next 10 years, $5 trillion, to justify a tax cut for the billionaire class.”

Neal said that the wealthy would see a greater benefit from the GOP tax provisions than working-class Americans.

“If you made a million dollars last year, you’re going to get $81,000 of tax relief. If you made less than $50,000 Guess what? Not quite so lucky,” Neal said. “But you know what? $1 a day goes a long way, because that’s where the numbers land.”

Neal said Democrats would have worked with Republicans to extend the 2017 tax cuts if the GOP had capped them for those making less than $400,000 a year, with people making more than that going back to the higher rate. 

Child tax credit

The child tax credit will increase to $2,500, up from the $2,000 enacted under the 2017 tax law. The refundability portion of the credit, or the amount parents could receive in a refund check after paying their tax liability, will remain capped but will increase with inflation by $100 annually. As of now, the amount a parent could receive back per child stands at $1,700.

While Republicans hailed the increase as a win for families, critics say it continues to leave out the poorest families as the refund amount is dependent on how much a parent earns. The credit phases in at 15 cents per income dollar, one child at a time.

“The Republican bill will leave out 17 million American children who are in families that don’t earn enough to receive the full child tax credit,” Rep. Suzan DelBene of Washington said Wednesday in the House Committee on Rules. Her amendment to make the tax credit fully refundable was rejected.

On the House floor Thursday morning, DelBene criticized the bill as a “big, broken promise.”

SALT

Republicans from high-tax blue states declared victory on the increase in the SALT cap, or the amount of state and local taxes that can be deducted from federal taxable income. After long, drawn-out disagreement, Republicans representing districts in California, New Jersey and New York secured a bump to $40,000, up from the $10,000 cap enacted under Trump’s 2017 tax law.

However, the cap comes with an income limit of $500,000, after which it phases down. Both the $40,000 cap and the $500,000 income threshold will increase annually at 1% until hitting a ceiling of $44,000 and $552,000.

Rep. Mike Lawler of New York said during debate that he “would never support a tax bill that did not adequately lift the cap on SALT.”

“This bill does that. It increases the cap on SALT by 300%,” Lawler said. “And I would remind my Democratic colleagues, when they had full control in Washington, they lifted the cap on SALT by exactly $0, zilch, zip, nada.”

Medicaid work requirements 

Energy and Commerce Chairman Brett Guthrie, R-Ky., said his panel’s bill would ensure Medicaid coverage continued for low-income families, individuals who are disabled and seniors through new work requirements and other changes.

“This bill protects coverage for those individuals by ensuring ineligible recipients do not cut the line in front of our most vulnerable Americans,” Guthrie said. “The decision by left-leaning state governments to spend taxpayer dollars on people who are ineligible for the program is indefensible. Medicaid should not cover illegal immigrants, deceased or duplicative beneficiaries, or able-bodied adults without dependents who choose not to work.”

The policy change would require those who rely on the state-federal health program, and who are between the ages of 19 and 65, to work, participate in community service, or attend an educational program at least 80 hours a month.

The language has numerous exceptions, including for pregnant people, parents of dependent children, people who have complex medical conditions, tribal community members, those in the foster care system, people who were in foster care who are below the age of 26 and individuals released from incarceration in the last 90 days, among others.

New Jersey Democratic Rep. Frank Pallone, ranking member on the committee that oversees major health care programs, said the Republican bill would not only cut funding for Medicaid, but also for Medicare, the program relied on by seniors and some younger people with disabilities.

“Republicans are stripping health care away from people by putting all sorts of burdensome and time-consuming road blocks in the way of people just trying to get by,” Pallone said. “The vast majority of people on Medicaid are already working. This is not about work. It’s about burying people in so much paperwork that they fall behind and lose their health coverage, and if someone loses their health coverage through Medicaid, this GOP tax scam also bans them from getting coverage through the ACA marketplace.”

While the GOP bill doesn’t directly address Medicare, he said, a federal budget law, known as the Pay-As-You-Go Act, would force spending cuts called sequestration to that health program.

“The Medicare cuts will lead to reduced access to care for seniors, longer wait times for appointments, and increased costs,” Pallone said.

States to share in food aid costs

House Agriculture Committee Chairman Glenn “GT” Thompson, R-Pa., pressed for support for his piece of the legislation, saying changes to the Supplemental Nutrition Assistance Program, or SNAP, are needed.

“SNAP is the only state-administered welfare program that does not have a cost-share component, and while the federal government funds 100% of the benefit, states are tasked with operating it,” Thompson said. “The only problem: They aren’t operating it well.”

He also cheered several of the package’s tax provisions, saying they would benefit farmers.

“The one big, beautiful bill makes permanent and expands the Trump tax cuts. It also prevents the death tax from hitting over 2 million family farms,” Thompson said. “It locks in the small business deduction, helping 98% of American farms stay afloat.”

Minnesota Democratic Rep. Angie Craig, ranking member on the panel, wrote in a statement that the proposed changes would “make America hungrier, poorer and sicker.”

“At a time when grocery prices are going up and retirement accounts are going down, we must protect the basic needs programs that help people afford food and health care,” Craig wrote. “As a mother and someone who needed food assistance at periods in my own childhood, I condemn this attempt to snatch food off our children’s plates to fund tax breaks for large corporations.”

Border security, air traffic control, EV fees

House Transportation and Infrastructure Chairman Sam Graves, R-Mo., said his piece of the package would combine “critical investments in border security, national defense and modernization of America’s air traffic control system, while eliminating wasteful spending and other deficit reduction measures.”

“Specifically, this bill addresses long overdue needs in the United States Coast Guard, which for over two decades has received less than half of the capital investment necessary to effectively carry out its critical missions,” Graves said.

The transportation section of the package, he said, includes $21 billion for the Coast Guard and $12.5 billion to modernize the air traffic control systems while establishing a $250 annual fee for electric vehicles and a $100 annual fee for hybrid vehicles that would go toward the Highway Trust Fund. That account has traditionally been funded through a gas tax. 

Washington Democratic Rep. Rick Larsen, ranking member on the transportation panel, said he wanted “to continue historic funding for transportation, infrastructure, and stronger and healthier communities.”

“Unfortunately, this reconciliation package leaves very little room for those investments,”  Larsen said.

“This bill causes immediate harm by yanking money from locally selected projects that our constituents in Republican and Democratic districts alike are counting on,” he added. “And for what? To help pay for the tax cuts for the richest Americans and largest and largest corporations.”

Student loan overhaul, medical research

House Education and Workforce Committee ranking member Bobby Scott, D-Va., urged opposition to what he called the “big, bad billionaires bill,” saying it would lead to a massive reshaping of higher education aid.

“The bill not only can increase the deficit, it has 4 million students who will lose their Pell Grants, 18 million children could potentially lose their free school lunch, 13.7 million people are set to lose their health care and everybody loses when the National Institutes of Health research is cut,” Scott said.

Natural Resources Committee Chairman Bruce Westerman, R-Ark., said his portion of the legislation would “generate over $20 billion in savings and new revenue for the federal government, primarily by direct royalty and lease fees from the sale of oil, gas, timber and mine resources, while curbing wasteful spending.”

“Our title reinstates onshore and offshore oil and gas lease sales, holds annual geothermal lease sales and ensures a fair process for critical mineral development nationwide,” Westerman said. “We’ve also directed the Forest Service and the Bureau of Land Management to utilize long-term timber sale contracts.”

The Trump administration released a Statement of Administration Policy on Wednesday urging GOP lawmakers to approve the legislation, when it still appeared several members of the party might delay or even block the bill in the House. 

“The One Big Beautiful Bill Act reflects the shared priorities of both Congress and the Administration,” the SAP states. “Therefore, the House of Representatives should immediately pass this bill to show the American people that they are serious about ‘promises made, promises kept.’

“President Trump is committed to keeping his promises, and failure to pass this bill would be the ultimate betrayal.”

U.S. House Freedom Caucus Chair Andy Harris, R-Md., center, speaks to reporters on Wednesday, May 21, 2025 at the U.S. Capitol. From left are Republicans Keith Self of Texas, Scott Perry of Pennsylvania and Chip Roy of Texas. (Photo by Jennifer Shutt/States Newsroom)

This report has been updated.

WASHINGTON — U.S. House Republican leaders released changes to their “one big beautiful bill” late Wednesday after marathon negotiations with conservatives demanding deeper cuts to safety net programs, teeing up debate and a final vote likely sometime Thursday.

The alterations, which will have to be adopted later, moved up implementation of work requirements for Medicaid by at least a couple of years and tossed out plans to sell some public lands. The new language also tightened the timeline for clean energy tax breaks and raised the ceiling for taxpayers who deduct state and local taxes.

The package of adjustments — the manager’s amendment — was incorporated into the larger reconciliation bill, which was approved by the House Rules Committee just before 11 p.m. Eastern on an 8-4 party-line vote. Far-right holdout Rep. Chip Roy of Texas was absent.

Next, the package must pass a procedural vote on the House floor before lawmakers can debate and take a final vote.

With a razor-thin margin, House Speaker Mike Johnson can only lose a handful of members on each vote. Democrats are expected to uniformly vote “no” in the procedural and final votes.

Medicaid

Republicans moved up implementation of work requirements for Medicaid enrollees from taking effect after January 1, 2029 to no later than December 31, 2026. That could mean some states will make the changes before next year’s midterm elections.

The provision would require those who rely on the state-federal health program for lower-income Americans and some people with disabilities, who are between the ages of 19 and 65, to work, participate in community service, or attend an educational program at least 80 hours a month.

The language has numerous exceptions, including for pregnant people, parents of dependent children, people who have complex medical conditions, tribal community members, people in the foster system, people who were in the foster system who are below the age of 26 and people released from incarceration in the last 90 days, among others.

The GOP changes also would bar Medicaid from covering gender transition procedures for anyone in the program. The bill previously barred that type of treatment for anyone below the age of 18.

Clean energy tax credits

Republicans also tightened the timeline on the termination of clean energy tax credits enacted under President Joe Biden. Hardliners focused on reducing the deficit had demanded a quicker phase-out for the credits.

The new language would accelerate phase-outs for clean energy investment tax credits to 2028, up from 2031, with special carve-outs for nuclear facilities. Companies that break ground on new facilities 60 days after the bill is enacted, if passed, will not qualify for the tax credits. The same applies to any facility placed into service after 2028.

State and local taxes

A separate contingent of Republican holdouts reached a deal with Johnson to raise the SALT cap to $40,000, up from the $10,000 lid enacted under the 2017 tax law. The SALT cap  — the amount of state and local taxes constituents can deduct from federal taxable income — is a top issue for Republicans who represent districts in high-tax blue states, including California, New Jersey and New York.

The amount of SALT taxpayers can deduct decreases for those making more than $500,000 annually. The SALT cap and the income cut-off will increase by 1% each year from 2027 until 2033.

Public lands sale

The amendment removed language that would have allowed the sale of public lands in Nevada and Utah.

The National Wildlife Federation credited Montana Republican Rep. Ryan Zinke with removing the provision.

“Thank you to Rep. Ryan Zinke and his colleagues who listened to their constituents and worked with House leaders to eliminate the provision from the budget reconciliation bill,” NWF Associate Vice President for Public Lands David Wilms said in a statement. “We urge all members of Congress to refrain from similar attacks on America’s public lands.”

Jessica Turner, president of the Outdoor Recreation Roundtable, wrote in a statement that “Congress avoided setting a dangerous precedent that lands can be sold anytime the U.S. Treasury needs a budget ‘pay-for’ and threatening outdoor recreation businesses and rural communities alike that need certainty, access, and long-term infrastructure.”

The Center for Biological Diversity’s Great Basin Director Patrick Donnelly wrote in a separate statement that it was “appalling that GOP leaders tried to get away with auctioning off some of our country’s most beautiful landscapes to fund tax cuts for billionaires and make developers richer. This is Gilded Age-level stuff, and I hope people remember it the next time Republicans try to pretend they care about public lands.”

A separate provision in the amendment appeared to narrow the federal authorizations energy projects could bypass by paying a $10 million fee. The section had been attacked by environmental groups as a “pay-to-play” for energy companies.

White House meeting

The changes come after Johnson, a Louisiana Republican, and far-right holdouts huddled with President Donald Trump at the White House Wednesday afternoon.

Johnson, speaking to reporters at the Capitol following the meeting, said that lawmakers had “a good discussion” and that he believes the GOP is “in a very good place.”

“I think that all of our colleagues here will really like this final product, and I think we’re going to move forward,” Johnson said.

Johnson said members of the Freedom Caucus, who previously argued the legislation doesn’t go far enough to restructure Medicaid and reduce federal spending, may end up supporting the bill, in part because Trump plans to address their other concerns through unilateral actions.

“You will see how all this is resolved. But I think we can resolve their concerns and it’ll be probably some combination of work by the president in these areas as well as here in Congress,” Johnson said. “So there may be executive orders related to some of these issues in the near future.

“And, you know, this is a commitment the president has made. He wants to go after fraud, waste and abuse.”

White House press secretary Karoline Leavitt released a written statement saying the “meeting was productive and moved the ball in the right direction.

“The President reiterated how critical it is for the country to pass the One Big Beautiful Bill as quickly as possible.”

Complex process

Republicans are using the complex reconciliation process to move the package through Congress with simple majority votes in each chamber, avoiding the Senate’s 60-vote legislative filibuster, which would otherwise require bipartisanship.

Reconciliation measures must address federal revenue, spending, or the debt limit in a way not deemed “merely incidental” by the Senate parliamentarian. That means the GOP proposals must carry some sort of price tag and cannot focus simply on changing federal policy.

Republicans are using the package to extend the 2017 tax law, increase spending on border security and defense by hundreds of billions of dollars, overhaul American energy production, restructure higher education aid and cut spending on Medicaid.

A new Congressional Budget Office analysis released late Tuesday projected the massive reconciliation package would decrease resources for low-income families over the next decade while increasing resources for top earners.

Freedom Caucus

Earlier Wednesday, members of the Freedom Caucus told reporters following a different meeting with Johnson that they believed negotiations were moving in the right direction, but were skeptical of trying to approve the entire package this week.

Maryland Republican Rep. Andy Harris, chairman of the group, said they wanted the legislation to go further in terms of addressing “waste, fraud and abuse” within Medicaid, though he declined to elaborate.

The Medicaid proposals in the version of the bill prior to the negotiated changes would cut $625 billion in federal spending during the next decade, under a CBO analysis. Democrats have warned the result would be millions of vulnerable people losing access to the health program for lower income people and some people with disabilities.

Texas Republican Rep. Chip Roy said during that same impromptu press conference that leadership and members of the Freedom Caucus had made “significant progress” toward a final agreement.

“We’re trying to deliver so that the people who are actually out there working hard can actually get the health care that they want to get, that they can get, and get it the best way possible,” Roy said. “That’s what this is all about; changing a broken system, making sure we’re saving taxpayer dollars and being able to provide a better environment for people to be able to thrive.”

Pennsylvania Republican Rep. Scott Perry, who used to chair the Freedom Caucus, said that holding a House vote before Memorial Day was a made-up timeline and that if negotiations needed to last longer, they should.

“This is a completely arbitrary deadline set by people here to force people into a corner to make bad decisions,” Perry said. “It’s more important to get this right, to get it correct, than to get it fast. We are sitting at the table to do that.”

Jacob Fischler contributed to this report.

The U.S. Capitol building in Washington, D.C., on May 7, 2025. (Photo by Jennifer Shutt/States Newsroom)

WASHINGTON — As House Republicans continue to wrangle over the “one big beautiful bill,” a new analysis released late Tuesday projects the massive reconciliation package would decrease resources for low-income families over the next decade while increasing resources for top earners.

The nonpartisan Congressional Budget Office estimates that the lowest-earning households in the United States would see incomes decrease 2% in 2027, moving to a 4% loss in 2033, as a result of spending cuts to nutrition assistance and Medicaid, the health insurance program for low-income individuals and those with disabilities.

The CBO projects resources would meanwhile increase by 4% for the highest-earning Americans in 2027, moving down to a 2% increase by 2033, according to the latest analysis.

The CBO score could change as hardline conservatives press Republican leadership for increased spending cuts to federal safety net programs as a way to pay for, at least in part, the extension and expansion of 2017 tax cuts that come with a price tag of $3.8 trillion.

Rep. Brendan Boyle, ranking member on the House Committee on the Budget, said in a statement late Tuesday that “Donald Trump and House Republicans are selling out the middle class to make the ultra-rich even richer.”

“This is what Republicans are fighting for—lining the pockets of their billionaire donors while children go hungry and families get kicked off their health care,” said the Pennsylvania Democrat.

The bill as written now would slash roughly $800 billion from Medicaid and Affordable Care Act provisions, and $300 billion from the Supplemental Nutrition Assistance Program, or SNAP, according to the left-leaning Center on Budget and Policy Priorities.

Lawmakers on the House Committee on Rules — the final stop for the 1,116-page package bill before it reaches a House floor vote — have been debating the measure since 1 a.m. Eastern Wednesday, while House Speaker Mike Johnson huddled separately with far-right deficit hawks.

Far-right members of the House Freedom Caucus remained skeptical the bill could reach the House floor by Johnson’s goal of Wednesday.

The Louisiana Republican leader also faces opposition from GOP lawmakers who represent high-tax blue states who want an even higher ceiling for the amount of state and local taxes, or SALT, their constituents can deduct from federal taxable income.

Lifting the ceiling, which lawmakers already proposed boosting from $10,000 to $30,000 for married couples filing jointly, will increase the cost of the bill.

Johnson needs nearly every GOP lawmaker to support the bill once it hits the floor as House Republicans have an extremely thin 220-213 majority.

President Donald Trump arrives with Speaker of the House Mike Johnson, R-La., for a House Republican meeting at the U.S. Capitol on May 20, 2025 in Washington, D.C. (Photo by Kevin Dietsch/Getty Images)

WASHINGTON — The U.S. House Republicans who have yet to rally behind the party’s “big, beautiful bill” huddled in the speaker’s office Tuesday as different factions tried to hash out agreement on taxes, Medicaid and a few other outstanding issues.

Speaker Mike Johnson, R-La., told reporters before those meetings began there were “a number of loose ends to tie up” with deficit hawks and members from high-tax states, who are pressing to raise the state and local tax deduction, also known as SALT.

“We got some hours ahead of us to work this out, and I’m very confident we will,” Johnson said. “I’m going to have a series of meetings that will begin right now in my office to try to tie up the final loose ends. This is a 1,100-page piece of legislation. We’re down to a few provisions so we are very confident, very optimistic we can get this done and stay on our timetable.”

Johnson hopes to pass the legislation this week, though he didn’t appear to have the votes as of Tuesday afternoon.

Trump pays a House call

The smaller meetings followed a closed-door huddle between all the chamber’s GOP lawmakers and President Donald Trump earlier in the day that didn’t quite have the intended effect of immediately convincing holdouts to vote for the bill.

Trump, however, appeared to declare victory before leaving the Capitol.

“I think we have unbelievable unity. I think we’re going to get everything we want,” Trump said after the morning meeting. “And I think we’re going to have a great victory.”

House Republicans have an extremely thin 220-213 majority, requiring nearly every GOP lawmaker to support the 1,116-page package in order for it to reach the Senate.

Getting SALT-y

The reconciliation bill currently proposes lifting the SALT cap from $10,000 to $30,000 for married couples filing jointly, with a phase-down for those earning $400,000 or more, but that’s not enough for Republicans from states most impacted by the aspect of tax law.

New York Republican Rep. Nick LaLota told reporters in the early afternoon that he would likely lose reelection if he can’t secure a better SALT agreement than what was on the table.

“If I do a bad deal, I would expect my constituents to throw me out,” LaLota said. “If I did a deal at $30,000, my own mother wouldn’t vote for me.”

LaLota said Republicans leaders should prioritize a deal that benefits swing voters to avoid the party losing centrist members and possibly the House majority in the 2026 midterms.

“If we win that one issue, they’ll have a much easier November of 2026. And thus we’ll be able to keep the House and do other fiscally responsible things for the next couple of cycles here, if we get this one issue right,” LaLota said. “Conversely, you get this issue wrong — you vote for a bad bill and you keep the cap low — those folks are getting thrown out of office, we lose the majority, and then we have an open border, then we have an impeached president, and then we have all the other things that America voted against.”

LaLota said later Tuesday, after GOP leaders proposed different SALT cap numbers, that there was still “no accepted deal, yet the parties are talking a little more with an understanding of each other’s position.”

“Leadership understands better what our pain threshold is,” LaLota said. “We clearly rejected the $30,000 number that’s in the Ways and Means bill.” 

He declined to say if the SALT Caucus was prepping a counteroffer for leadership, but said that staff were conducting “some research on some of the mixes of income caps and what SALT cap there would be and how much that would be valued at relative to the entire $4 trillion package.”

‘Bad faith negotiation’

Rep. Mike Lawler, a staunch supporter of raising the SALT cap for his constituents north of New York City, would not comment to reporters outside the speaker’s office about a specific dollar amount but said there’s an “improved offer” on the table.

“We’re waiting on more details. We’ll have more to say later,” Lawler said.

Speaking to Fox News in the hallway, he said, “I’m not going to sacrifice my constituents and throw them under the bus in a bad faith negotiation, which is what this has been by leadership and Jason Smith,” he said referring to the chair of the House Committee on Ways and Means.

“We need to come to an agreement. We need to provide real and lasting tax relief, and that’s what I’m fighting for, for my constituents. I respect the president … but I’ll respectfully disagree,” Lawler said.

Trump urged House Republicans Tuesday morning that raising the SALT cap benefits Democratic governors.

Conservatives still unhappy

Complicating negotiations, some far-right House Republicans remain opposed to the bill, saying it does not go far enough.

Rep. Chip Roy of Texas, who did not support the bill during a committee vote Sunday night, told States Newsroom Tuesday afternoon that his “concerns and problems still exist.”

Roy argues the massive reconciliation deal does not reduce deficit spending enough, particularly with respect to Medicaid and clean energy tax credits.

When asked whether lawmakers were approaching an agreement, Roy said “Not sure. We’re still talking. We’ve had literally like five meetings today already.”

Thune predictions

The House passing the package this week would only be one of many steps in the long, winding process.

Senate Majority Leader John Thune, R-S.D., said during a press conference Tuesday afternoon, just after Johnson spoke during a closed-door lunch, that changes to the package are expected in the upper chamber.

Thune said one of the major questions for GOP senators is whether the legislation holds “sufficient spending reforms to get us on a more sustainable fiscal path.”

“I think most of our members are in favor of a lot of the tax policy and particularly those portions of the tax policy that are stimulative, that are pro-growth, that will create greater growth in the economy,” Thune said. “But when it comes to the spending side of the equation: This is a unique moment in time and in history where we have the House and the Senate and the White House, and an opportunity to do something meaningful about government spending.”

Thune said that GOP senators would likely make “tweaks” to the tax provisions once the House sends over a package, especially around how long certain tax policy lasts.

“They have cliffs and some shorter-term timeframes when it comes to some of the tax policies,” Thune said. “We believe that permanence is the way to create economic certainty and thereby attract and incentive capital investment in this country that creates those good-paying jobs, and gets our economy growing and expanding, and generates more government revenue.”

Former U.S. Rep. Billy Long, nominee for Internal Revenue Service commissioner, testifies before the Senate Finance Committee at his confirmation hearing on Tuesday, May 20, 2025. (Screenshot from committee webcast)

WASHINGTON — Senators tasked with tax writing split along party lines Tuesday praising and grilling former Republican U.S. Rep. Billy Long of Missouri, President Donald Trump’s nominee to lead the Internal Revenue Service, the agency tasked with enforcing the largest source of U.S. revenue as the country faces record debt and interest costs.

Long, who served in Congress from 2011 to 2023 and previously spent multiple years as a talk radio host, testified to the Senate Finance Committee that he plans to get rid of “stinking thinking” at the IRS and implement a “comprehensive plan” to modernize the agency and “invest in retaining skilled members of the team.”

“This does not mean a bloated agency, but an efficient one where employees have the tools they need to succeed,” Long said.

The agency has lost more than 11,000 employees, or 11% of its workforce, either through deferred resignations or mass firing of probationary workers since Trump began his second term, according to a May 2 report from the agency’s inspector general. Trump said in December he intended to nominate Long for the IRS post.

‘Top-down culture change’

Committee Chair Mike Crapo of Idaho opened the confirmation hearing expressing his confidence in Long, saying he will direct a “sea change” at the agency that will benefit taxpayers.

“President Trump called Congressman Long the ‘consummate people person.’ Congressman Long is very clear that he will make himself available to all IRS employees, no matter their seniority. Moreover, he wants to implement a top-down culture change at the agency,” Crapo said.

The confirmation hearing comes as lawmakers struggle to agree on a budget reconciliation package, which will extend and expand Trump’s 2017 tax law and in turn widen IRS responsibilities.

Sen. James Lankford, an Oklahoma Republican, said he trusted Long’s work ethic and told him, “We’re going to do a tax bill here in the next couple of months. To be able to get that done, as we did it in 2017, there’ll be a lot of work the IRS has to do to be able to put guidance documents out, to be able to get clear instructions of what that means.”

Nonexistent tribal tax credits

Democrats approached the hearing with skepticism.

The nearly two-hour back-and-forth with Long followed recent revelations that he accepted donations to his defunct Senate campaign shortly after Trump nominated him as the IRS commissioner. Democratic senators on the panel have also called for an investigation into Long’s work with a company that peddled nonexistent tribal tax credits.

“Bottom line, the American people have the right to know whether the future IRS commissioner is a crook,” said Sen. Ron Wyden of Oregon, the panel’s top Democrat.

Long denies any wrongdoing.

Sen. Catherine Cortez Masto, a Nevada Democrat, pressed Long about $65,000 he allegedly received for his involvement promoting the fake tax credits for the companies Capital Edge Strategies and White River.

“Knowing that (the credits) are illegal, the IRS has said they’re illegal, how do you stand here before this committee and tell the chairman just a few minutes ago that you have no conflict of interest?” Cortez Masto asked.

Long replied that he’s in compliance with the Office of Government Ethics regarding his nomination and that he “did not have any perception whatsoever that these (credits) did not exist.”

Other Democrats on the panel questioned Long on Trump’s recent statements that he would pull Harvard University’s tax-exempt status over its refusal to comply with demands from the administration.

Wyden characterized Long as a “MAGA devotee” and said that Trump wants to use the IRS “as a cudgel to beat his adversaries into submission.”

14-page letter

Sen. Elizabeth Warren, who sent Long a 14-page letter questioning his past, repeatedly asked Long about a statute prohibiting the president from ordering tax audits on specific people or businesses.

“Is it illegal for the President to instruct the IRS to remove nonprofit status from taxpayers?” Warren asked several times.

“I’m not going to have the answer that you need, I apologize,” Long said.

Senate Republicans on the panel questioned Long on how he can improve customer service for taxpayers — despite the party successfully fighting in 2023 to cut new IRS funding under President Joe Biden in 2022.

Sen. Todd Young of Indiana said the agency is “behind the curve” on technology and that its customer service issues are “out of hand.”

“If confirmed, will you commit to developing a comprehensive IRS modernization plan that prioritizes customer service, identifies critical technology infrastructure needs and ensures greater transparency and audit practices? Yes or no?” Young asked.

“Yes,” Long replied.

“Excellent,” Young said. 

The U.S. Capitol is pictured on Feb. 25, 2025. (Photo by Jennifer Shutt/States Newsroom) 

WASHINGTON — U.S. House Republicans on the Budget Committee moved the “one big, beautiful” reconciliation bill a step closer to the chamber floor in a rare Sunday night vote after a handful of conservatives blocked the bill Friday. 

The massive deal squeaked through on a 17-16 vote, with four far-right panel members voting “present.” They were Reps. Josh Brecheen of Oklahoma, Andrew Clyde of Georgia, Ralph Norman of South Carolina and Chip Roy of Texas. All four voted no on the bill Friday.

Rep. Lloyd Smucker of Pennsylvania flipped his Friday vote of “no” to support the massive budget reconciliation deal that cuts safety net programs to pay for extending, and expanding, President Donald Trump’s 2017 tax law — at a cost of $3.8 trillion over the next decade.

Smucker, the panel’s vice chair, switched his vote Friday because of committee procedural rules that allowed him to propose reconsideration of the measure.

Brecheen, Clyde, Norman and Roy voted “no” on Friday after demanding work requirements for some Medicaid recipients begin prior to the bill’s stated date of 2029, and that clean energy tax credits phase out at a faster pace.

Roy wrote on social media Sunday night that he changed his vote “out of respect for the Republican Conference and the President to move the bill forward” but that the bill “does not yet meet the moment.”

Other details on why the members changed their votes to “present” were unclear. 

When asked by Democrats on the panel whether anything had changed in the bill, Budget Committee Chair Jody Arrington said negotiations were “fluid.”

“Deliberations continue at this very moment. They will continue on into the week, and I suspect right up until the time we put this big, beautiful bill on the floor of the House,” said Arrington of Texas.

Ranking Member Brendan Boyle of Pennsylvania said his side of the aisle wanted “transparency.”

“If the bill has changed and there’s been some side agreement reached, I think it’s important that all the members have the full details on that in advance of any vote,” Boyle said.

Massive bill

The committee’s tense Sunday night meeting began nearly 30 minutes late.

House Speaker Mike Johnson of Louisiana told reporters on Capitol Hill shortly beforehand that talks were going “great” and that “minor modifications” had been made over the weekend.

The 1,116-page bill package that includes bills from 11 separate committees will now need to clear the House Committee on Rules to advance to a full House vote. House members are set to leave for Memorial Day recess on Thursday.

As written, the bill cuts more than $600 billion over the next decade from Medicaid, the government health program for low-income individuals as well as those with disabilities.

Credit downgrade

Sunday night’s vote came just two days after Moody’s Ratings downgraded the U.S. government’s credit rating, citing a gloomy outlook for U.S. debt and interest burdens.

“Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” a Friday statement from the investment rating service read. “We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration.”

The reconciliation package could add up to $3.3 trillion to the national debt through 2034, reaching $5.2 trillion if temporary provisions are made permanent, according to analysis by the Committee for a Responsible Federal Budget. The Congressional Budget Office has not yet released scores for all parts of the megabill.

The far-right House Freedom Caucus board released a statement shortly after Sunday night’s vote, saying the bill continues to increase deficits “with possible savings years down the road that may never materialize.”

“Thanks to discussions over the weekend, the bill will be closer to the budget resolution framework we agreed upon in the House in April, but it fails to actually honor our promise to significantly correct the spending trajectory of the federal government and lead our nation towards a balanced budget,” according to the statement posted on social media.

Members of the caucus who do not serve on the Budget Committee made similar public statements.

“America faces the reality of financial insolvency and looming bankruptcy. For 9 years, I have remained faithful to principles that include an end to the continuous growth of FedGov deficit spending. I will not support a federal budget that increases federal deficit spending,” GOP Rep. Clay Higgins of Louisiana wrote on his X profile Sunday.

Republican Rep. Mark Green of Tennessee wrote on the social media site, “The Moody’s downgrade is yet another wake up call. We need to decrease spending immediately!”

Thin margins

As expected, and following Friday’s same result, Democrats on the panel voted unanimously against the package.

Republicans hold a slim 220-213 margin in the House, meaning that if more than three Republicans vote with Democrats — who are all expected to vote against the package — the bill would fail on the floor.

Republicans swiftly voted down several last-ditch efforts by Democrats on the panel to protect low-income health care and food assistance programs, as well as clean energy and manufacturing tax credits.

Johnson must also contend with a parallel — and expensive — fight among his conference on the state and local taxes, or SALT, deduction. Republicans who represent high-income, high-tax blue states like California and New York, are demanding a more generous cap on the amount they can deduct. 

The U.S. House Budget Committee votes on Friday, May 16, 2025 on a massive reconciliation package. The vote failed, 16-21. (Screenshot from House webcast)

WASHINGTON — Republicans suffered a major setback to their “big, beautiful bill” on Friday, when amid conservative objections the U.S. House Budget Committee failed to approve the measure, a crucial step in the process.

In a 16-21 vote, Reps. Andrew Clyde of Georgia, Josh Brecheen of Oklahoma, Ralph Norman of South Carolina, Chip Roy of Texas and Lloyd Smucker of Pennsylvania broke from their GOP colleagues to block the bill from moving toward the floor, demanding changes to several provisions.

The breakdown over the 1,116-page bill marks an escalation in the long-running feud between centrist Republicans, who have been cautious about hundreds of billions in spending cuts to safety net programs, and far-right members of the party, who argue the changes are not enough.

The committee is scheduled to reconvene Sunday at 10 p.m. Eastern. House Speaker Mike Johnson of Louisiana has said he wants the package on the floor prior to the Memorial Day recess.

Speedier work requirements

Norman said he remains a “hard no” until new work requirements for Medicaid recipients phase in more quickly. As the bill is written, the requirements won’t begin until 2029.

“To phase this in for four years — We’re telling a healthy-bodied, a healthy American that you got four years to get a job. No, your payment stops now,” Norman said.

Brecheen criticized the bill for not going far enough to repeal wind and solar energy tax credits, which he contends are “undermining natural gas jobs.”

“We have to fix this,” he said.

Clyde denounced the measure for not adhering to President Donald Trump’s promise of “right-sizing government,” as Clyde described it. The Georgia Republican also pleaded for lower taxes on firearms and stronger cuts that would put Medicaid on a “sustainable path.”

“Unfortunately, the current version falls short of these goals and fails to deliver the transformative change that Americans were promised,” Clyde said.

Smucker initially voted ‘yes,’ but then joined his four colleagues to oppose the measure.

Trump wrote on his social media platform shortly before the committee voted that “Republicans MUST UNITE behind, ‘THE ONE, BIG BEAUTIFUL BILL!’”

“We don’t need ‘GRANDSTANDERS’ in the Republican Party. STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!”

‘A wrecking ball to Medicaid’

Democrats, who as expected unified in voting no against the bill, slammed it as “ugly,” “cruel” and a “betrayal.”

“This bill takes a wrecking ball to Medicaid, on which 1 in 5 Americans and 3 million Ohioans depend for medical care — children, seniors in nursing homes,” said Rep. Marcy Kaptur, who represents northern Ohio. “Please come with me to visit the nursing homes. … Perhaps too many on the other side of the aisle have not had to endure a life that has major challenges.”

Rep. Ilhan Omar of Minnesota said the proposed cuts to safety net programs would be “devastating.”

“Their changes will kick millions of Americans off their health care and nutrition assistance. That means more untreated illnesses, more hungry children, more preventable deaths,” she said.

Republican-only bill

Republicans are using the complex reconciliation process to move the package through Congress with simple majority votes in each chamber, avoiding the Senate’s 60-vote legislative filibuster, which would otherwise require bipartisanship. 

Reconciliation measures must address federal revenue, spending, or the debt limit in a way not deemed “merely incidental” by the Senate parliamentarian. That means the GOP proposals must carry some sort of price tag and cannot focus simply on changing federal policy.

Republicans are using the package to extend the 2017 tax law, increase spending on border security and defense by hundreds of billions of dollars, overhaul American energy production, restructure higher education aid and cut spending.

The 11 House committees tasked with drafting pieces of the legislation have all debated and approved their measures along party lines.

The Agriculture Committee, Energy and Commerce Committee and Ways and Means Committee all completed their work earlier this week, amid strong objections from Democrats.

Proposed changes to the Supplemental Nutrition Assistance Program, or SNAP, could shift considerable cost-sharing onto states for the first time, presenting challenges for red-state lawmakers who need to explain the bill back home.

More than $600 billion in federal spending cuts to Medicaid during the next decade could also cause some difficulties for moderate Republicans, some of whose constituents are likely to be among the millions of Americans expected to lose their health insurance.

Republicans also have yet to reach an agreement on the state and local tax deduction or SALT, a priority for GOP lawmakers from blue states like California, New Jersey and New York.

The Budget Committee’s role in the process was to package together all of the bills and then send the one massive bill to the Rules Committee, the last stop before floor debate for major legislation.

That won’t be able to happen until after GOP leaders get nearly all the Republican lawmakers on the panel to support the package. 

A measure passed by the U.S. House Ways and Means Committee allows individual taxpayers such as waiters and waitresses to deduct qualifying tips earned throughout the year, a tax break that would end in 2028. (Getty Photos)

WASHINGTON — House Republicans advanced the tax portion of the “one big, beautiful” reconciliation package early Wednesday, a step forward in permanently extending, and in some cases expanding, the 2017 tax law and temporarily handing President Donald Trump a win on campaign promises like no tax on tips.

The House Committee on Ways and Means voted along party lines to pass the measure, 26-19, after nearly 18 hours of debate that went through the night. Republicans rejected numerous amendments offered by Democrats, including protecting tax credits meant to combat climate change enacted under Democrats’ own 2022 budget reconciliation law, the Inflation Reduction Act.

The marathon debate occurred as the House Committee on Energy and Commerce debated overnight and into Wednesday afternoon over deep budget cuts, including some to Medicaid assistance for low-income individuals, to pay for the cost of tax provisions.

As of now, the massive tax package is estimated to add $3.8 trillion to the budget deficit over 10 years, according to the nonpartisan Committee for a Responsible Federal Budget.

If any temporary expansions in the bill are eventually made permanent, it would add roughly $5.3 trillion to the deficit over the next decade, according to the CRFB. The official congressional budget score has not yet been released.

Overall the bill is “a very, very big tax cut,” said Howard Gleckman, senior fellow at the Tax Policy Center, part of the left-leaning Brookings Institution and Urban Institute. “Much of the benefit will go to higher income people.”

Tax brackets, business breaks would continue

The bill permanently extends the underlying tax provisions passed in 2017 under the GOP-backed bill titled the Tax Cuts and Jobs Act, which is set to expire in 2025.

This means:

• Individual taxpayers would remain in the same tax brackets that were lowered in 2017, and they would continue to see the doubled standard deduction — two of the most costly measures. Additionally, taxpayers will receive a boost up to $2,000 on the standard deduction through 2028.
• Individual brackets would remain at 10%, 12%, 22%, 24%, 32%, 35% and 37%, though the proposal would change how inflation adjustments are calculated, meaning income would be taxed less over time, except for those in the 37% bracket.
• The $2,000 child tax credit, per child, would remain permanent but temporarily increase to $2,500 through 2028. The refundable portion of the credit — meaning how much money taxpayers can get back — would be increased to $1,400, but the amount remains subject to income thresholds, meaning lower income households would receive less of a refund.
• The child tax credit would now only be accessible if the parent submits a Social Security number, as well as a spouse’s if legally married, in addition to the already required Social Security number of each qualifying child.
• On the business side, the corporate tax rate would stay at 21%.
• Business owners who run sole proprietorships, partnerships and S-corporations would see an increase, to 23% up from 20%, in the amount of business income they can deduct from their federal returns, otherwise referred to as the pass-through income deduction.
• Expensing for research and development would be restored through 2029, as well as deductions available to businesses for certain investments, including equipment purchases.

No tax on tips, but only for a few years

Trump promised on the campaign trail to eliminate taxes on tips, Social Security and car loan interest. House Republicans handed him a win in their bill, but only a limited one.

The bill allows individual taxpayers to deduct qualifying tips earned throughout the year, a tax break that would end in 2028. And like the new child tax credit requirement, taxpayers could only take advantage of the deduction by including a Social Security number on their federal tax return as well as their spouse’s SSN, if married.

No taxes on car loan interest would also go into effect through 2028, though taxpayers could only claim it for automobiles that received final assembly in the United States.

Senior citizens with incomes of $75,000 or less, or $150,000 for a married couple, would receive an extra $4,000 discount on taxable income, with the amount decreasing as incomes increase. The tax break would also expire in 2028. The bill does not specify an age for “seniors.”

Highly taxed states still unhappy 

House Republicans raised the cap on the amount of state and local taxes, or SALT, that can be deducted, but not enough to please both GOP and Democratic lawmakers who represent highly taxed states like New York and California.

Under the bill the committee advanced Wednesday morning, taxpayers could deduct up to $30,000 — three times the $10,000 ceiling in the 2017 law — from their federal taxable income. The full cap would apply to those making $400,000 or less in annual income but phases down for higher earners.

Raising the cap is costly and unpopular with lawmakers representing lower tax states.

Republican Reps. Mike Lawler and Nick LaLota of New York, and Rep. Young Kim of California, are threatening to vote no on the House floor if the cap isn’t raised. The House GOP cannot lose more than a handful of votes if all Republicans are present.

House Speaker Mike Johnson of Louisiana told reporters Wednesday he didn’t want to “handicap” negotiations by sharing details publicly and that he was talking to the SALT caucus until 1:30 a.m.

“But I will tell you I’m absolutely confident we’re going to be able to work out a compromise that everybody can live with,” he said.

A ‘tragic indifference’ for poor families

The committee’s party-line approval of the bill drew praise and criticism across organizations representing varying interests of Americans.

Kris Cox, director of federal tax policy for the left-leaning Center on Budget and Policy Priorities, wrote on social media that the temporary child tax credit bump does “zilch” for the roughly 17 million children whose parents do not earn enough money to receive a refund check from the credit.

“But it delivers an additional $500-per-kid to higher-income families,” Cox wrote.

The organization also slammed the bill for going “out of its way to take eligibility from 4.5 million US citizen kids who have at least one parent without an SSN.”

Kristen Crowell, executive director of the advocacy group Fair Share America, said in a statement Wednesday that the bill “shows a tragic indifference to the very real struggles of normal, working people.

“In order to save face in front of their constituents, Republicans are hiding behind misleading claims that everyone will see reductions in their taxes,” Crowell said.

The Natural Resources Defense Council, an environmental protection advocacy organization, estimates that phasing out and altogether eliminating clean energy tax credits would result in higher electricity bills in several states, including Ohio and Pennsylvania, according to an emailed statement.

‘Unshackle the economy’ for businesses

Groups representing businesses across the U.S. praised the House bill as a way to bolster investment and growth opportunities.

Former Republican Ways and Means Chair Kevin Brady of Texas released a statement Wednesday on behalf of the Alliance for Competitive Taxation praising the bill as a path to “unshackle the economy from burdensome taxes and unlock new growth.”

“The bill reported out by the House Ways and Means Committee is an encouraging step in that direction and, if implemented with its major pro-growth proposals intact, will help American businesses and workers compete at home and abroad,” Brady said.

The alliance hailed the extension of the 21% corporate tax rate and urged lawmakers to make permanent the research and development expensing, and capital investment deductions.

Kristen Silverberg, president and chief operating officer of the Business Roundtable, said her organization “applauds Chairman Smith and members of the House Ways and Means Committee for advancing a comprehensive, pro-growth tax bill,” referring to GOP Rep. Jason Smith of Missouri.

“Today’s vote is a critical step forward in securing a more competitive tax system for American businesses and workers,” said Silverberg, whose organization represents 200 CEOs of U.S.-based companies.

Treasury Secretary Scott Bessent prepares to testify before the Senate Finance Committee during his confirmation hearing in the Dirksen Senate Office Building on Capitol Hill on Jan. 16, 2025 in Washington, D.C.  (Photo by Chip Somodevilla/Getty Images)

The United States and China agreed Monday to lower steep tit-for-tat tariffs for 90 days, temporarily cooling a trade war but still leaving a cloud of uncertainty over businesses in the world’s two largest economies.

American and Chinese officials announced the pause will go into effect Wednesday, following talks in Geneva, Switzerland, as negotiations on a final deal continue. U.S. markets rallied following the announcement.

U.S. tariffs on Chinese goods will drop to a universal 10% baseline, down from the 145% President Donald Trump imposed last month. Trump’s previous 20% emergency tariffs announced in February on all products because of illicit fentanyl chemicals from China will remain in place, as will protective tariffs on goods still in place from the president’s first term. New duties on small packages sent to the U.S. from China, valued at less than $800, will also remain.

Fentanyl discussion

Treasury Secretary Scott Bessent said Monday that he and Chinese counterparts “had a very robust and highly detailed discussion” on preventing fentanyl and the chemicals to make the synthetic opioid from entering the U.S.

“The upside surprise for me from this weekend was the level of Chinese engagement on the fentanyl crisis in the United States. They brought the deputy minister for public safety,” Bessent said.

Bessent told reporters that overall negotiations were “always respectful.”

“We had the two largest economies in the world. We were firm — and we moved forward … We came with a list of problems that we were trying to solve and I think we did a good job on that,” Bessent said.

The White House touted the 90-day pause as a “landmark deal” in a Monday press release.

China has agreed to lower its tariffs on U.S. goods to 10%, down from 125%, according to a joint statement.

Tariffs are taxes on goods coming across the border. Companies and small businesses that import items from China must pay them to the U.S. government to receive their purchases.

Business reaction unclear

“I see the president’s approach to this as him putting a knife in your back and then pulling it out an inch and calling it a win,” said Alex Duarte, senior economist at the Tax Foundation, a think tank that advocates for lower taxation.

“Depending on the good, the rate could be close to 55%, so the tariffs on China are still pretty high. It’s hard to say how businesses are supposed to react to this because there’s so much uncertainty and the president behaves very erratically,” Duarte told States Newsroom Monday.

States Newsroom spoke to several business owners who were extremely nervous ahead of Trump’s April 2 “liberation day” tariffs. That announcement sent markets plummeting.

Marcus Noland, executive vice president and director of studies at the Peterson Institute for International Economics, said in an interview Monday the situation has “gone from OK to apocalyptic to bad.”

“It’s clearly preferable to a tariff that would have essentially ended trade between the two countries, but it’s still significantly more restrictive than where we started the year,” Noland said.

The White House released a statement Monday saying the administration will continue “working toward a rebalancing” of a trade deficit with China. In 2024, the U.S. purchased $295.4 billion more in goods from China than China purchased from the U.S.

“Today’s agreement works toward addressing these imbalances to deliver real, lasting benefits to American workers, farmers, and businesses,” according to the White House press release.

Phil Tritz, Jeff Schwartz and Matt Swan, left to right, all AmeriCorps volunteers from New Orleans, work with Habitat for Humanity building homes for Hurricane Katrina victims in Rockefeller Plaza on Sept. 23, 2005, in New York City. Habitat for Humanity, along with the NBC News "Today" show and the Warner Music Group, planned to build around 20 homes with thousands of volunteers working 24 hours a day for five days, starting on Sept. 26. (Photo by Michael Nagle/Getty Images)

WASHINGTON — Hillary Kane learned on a Saturday morning in April that within days, she would lose AmeriCorps funding for two programs that match mentors with West Philadelphia high schoolers and first-generation college students — both vulnerable groups at risk of not completing diplomas and degrees.

Kane, director of the Philadelphia Higher Education Network for Neighborhood Development, dreaded calling her AmeriCorps members to say the federal government had just terminated their positions in the nationwide service program. It embeds nearly 200,000 Americans each year in community nonprofits, schools and other organizations.

“My first thought was just a string of expletives, just that sinking feeling in the pit of your stomach,” she said, recalling the April 26 morning.

The federal agency dedicated to community service and volunteerism, which works in close partnership with states, is the latest target since President Donald Trump began his second term with an aggressive campaign to dismantle programs and slash the federal workforce.

The agency abruptly cut $400 million, or 41% of its budget, and placed 85% of its staff on administrative leave last month, according to court records.

AmeriCorps had provided $960 million to fund 3,100 projects across the United States each year, according to general undated figures available on the agency’s website.

Two of Kane’s grants were abruptly canceled as part of the cuts, and as of May 20, she’ll lose nearly 30 AmeriCorps members.

“They’re literally just left stranded,” she said. “You know, I have members who are single moms with kids and suddenly don’t have insurance, or at least by the end of the month they won’t.”

Five of Kane’s members were placed in three high schools in West Philadelphia helping students with career exploration, resumes and college applications. They also provided recreation activities after school.

“We’re in under-resourced schools,” Kane said. “We’ve got schools that have one counselor for 300 students, and they’re not even primarily a college counselor, right? They’re guidance counselors who are dealing with all kinds of other issues.”

Even more short-staffing

The cuts have produced upheaval for many nonprofits.

AmeriCorps members serve various roles in organizations that support environmental conservation projects, rebuild after natural disasters, prepare adults for the GED exam, tutor children and more.

Rick Cohen, of the National Council of Nonprofits, said the announcement was a blow to community organizations that are already stretched thin.

“Groups that were already short-staffed and facing all these other headwinds are now even further short-staffed and trying to figure out how to keep things going and how to keep helping people,” said Cohen, the chief communications officer and chief operating officer for the advocacy organization.

“It’s a very difficult time for a lot of people in the nonprofit sector because you never want to have to tell somebody that’s coming to you for help that you can’t help them, and that there’s not somewhere else for them to turn,” Cohen said.

Aaron Gray, who helped run an AmeriCorps program serving at-risk youth in Pennsylvania’s Allegheny County from 1997 to 2017, said “it’s a shame.”

Over the years as an assistant director, Gray placed thousands of service members with community organizations, faith-based programs and schools.

“I think this is gonna be detrimental. AmeriCorps has been around since the 90s, and it took a long time to build up to this, and it’s just being eviscerated overnight. If it survives, or if it’s brought back at some later point, it’s going to take a generation to rebuild.”

Clinton administration

Congress created AmeriCorps in 1993 when President Bill Clinton was in office. Then titled the Corporation for National and Community Service, the agency absorbed other government service programs including Volunteers in Service of America, or VISTA, created in 1964 to combat poverty, and the National Civilian Community Corps, referred to as NCCC, created in 1992 to assist natural disaster recovery.

The agency grew to include FEMA Corps in 2012 and Public Health AmeriCorps in 2022, among other specialized programs.

Service members, who are not federal employees, are provided a meager stipend of a few hundred dollars a week and receive an education award to pay for college or student loans upon completion of service, which typically lasts just under a year. As of 2024, the award was roughly $7,300.

Members, who range in age from young adults to senior citizens, can also receive health insurance while serving. While participants are not allowed to apply for unemployment, some can seek food assistance.

The administration terminated all NCCC programs in mid-April. Then, late on Friday, April 25, more than 1,000 grantees were told to pull their members from service immediately, according to court filings.

AmeriCorps did not respond to questions about the cuts.

Lawsuits filed

Two lawsuits challenging the cuts are working their way through the federal courts. Fourteen organizations, the union representing AmeriCorps staffers and three individual plaintiffs who were AmeriCorps members filed suit in U.S. District Court for the District of Maryland on May 5.

The nonprofits bringing the lawsuit are based in California, the District of Columbia, Illinois, Iowa, Maine, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, South Dakota and Virginia.

Plaintiffs say the immediate termination of grants has caused irreparable harm to nonprofits and AmeriCorps members who have now lost income, health insurance and large portions of their education awards, according to the complaint.

Plaintiff J. Doe 3 relocated to Fayetteville, North Carolina, for a second year of service, embedded with the Kingdom Community Corporation, a nonprofit that helps first-time homebuyers learn how to avoid foreclosure and that provides counseling certified by the Department of Housing and Urban Development.

According to the 55-page complaint, Doe 3 began service in February and was engaging with community members on a daily basis, answering anywhere from 25 to 75 calls. Doe 3 planned to use the education award to continue higher education.

“The sudden cancellation of Doe 3’s AmeriCorps position has left them in a new city, without a job, lacking the experience, skill building, and community they signed up for,” according to the complaint.

States left reeling

States are also affected by the cuts.

AmeriCorps’ structure puts the agency in close connection with states. Each state government establishes its own commission to determine which priorities and organizations receive the annual federal dollars.

For example, in Kane’s state of Pennsylvania, more than 8,500 members were placed in various roles at 1,000 nonprofits in 2024. The state’s commission received $38.8 million in federal dollars, while local dollars supplemented the rest, reaching $54.8 million in total funding for the year, according to the latest AmeriCorps annual state-by-state reports.

On April 29, state attorneys general from nearly two dozen states and the District of Columbia sued the administration, alleging the cuts were illegal.

The 123-page complaint details how U.S. DOGE Service officials arrived at AmeriCorps offices in D.C. on April 8 and began working with the interim agency head, Jennifer Bastress Tahmasebi, to plot program cuts.

“This case presents only the latest chapter in an ongoing saga, as the Administration attempts to dismantle federal agencies without Congressional approval,” according to the court filing.

States that brought the legal challenge include Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington and Wisconsin.

White House response

In a statement provided to States Newsroom Thursday, the White House defended the cuts.

“AmeriCorps has failed eight consecutive audits and identified over $45 million in unaccounted for payments in 2024 alone. President Trump is restoring accountability to the entire Executive Branch,” said spokesperson Anna Kelly.

Editor’s note: D.C. Bureau Senior Reporter Ashley Murray served in AmeriCorps in 2011.