US Republicans face internal disagreements over Trump tax cut package

By Bo Erickson, David Morgan and Richard Cowan

WASHINGTON, May 13 (Reuters) - Republicans who control the U.S. House of Representatives kicked off public debate on major pillars of President Donald Trump's budget legislation on Tuesday, weighing choices about tax policies and spending on popular social safety-net programs that may strain their narrow majority.

The plan, which would extend tax cuts passed during Trump's first term, could add to the nation's $36.2 trillion in debt over the next decade. Congress' bipartisan Joint Tax Committee estimates the tax cuts would cost $3.72 trillion.

"Together with a one big, beautiful bill, we can ignite a second Trump economic boom and improve the lives of millions of our neighbors back home," House Ways and Means Committee Chairman Jason Smith of Missouri said at the outset of a marathon debate over the proposed tax package.

The committee's top Democrat, Representative Richard Neal of Massachusetts, shot back that the Trump tax agenda amounted to "one big, beautiful tax cut for billionaires."

Lawmakers aim to partly offset the lost revenue by canceling many green energy initiatives and tightening eligibility for food and health safety-net programs that serve tens of millions of low-income Americans.

Some Republicans caution that program cuts could erode support among voters that elected Trump in November and handed the party control of Congress.

Republicans hold a narrow 220-213 House majority, and will need to stay united to pass a measure that Democrats are criticizing as hurting social programs.

Some Republicans from Democratic-led states including New York and California have threatened to oppose the legislation unless the so-called SALT cap on federal deductions for state and local taxes is increased.

"I will not support any bill that does not adequately lift the cap on SALT," New York Representative Mike Lawler said in a statement. "This bill, as written, fails to deliver and will not have my support."

Success in the House would be just a first step, as lawmakers would next need to pass the bill in the Senate, where Republicans hold a 53-47 majority and are planning to use a legislative maneuver to bypass the chamber's 60-vote filibuster threshold for most legislation.

The Republican plan would extend the tax cuts passed during Trump's first term and includes several of his campaign promises, including temporary tax breaks for tipped income, overtime and interest paid on some car loans and an additional tax break for seniors.

Fiscal hawks within the party argue the bill does not include sufficient spending cuts, while some Republican representatives from high-tax coastal states are pushing to raise a $30,000 deduction limit for state and local taxes.

PROTESTERS IN WHEELCHAIRS

The Republican proposal would increase taxes on university endowments, end incentives for electric vehicles, wind power and other green energy, and exclude many immigrants from tax incentives and health programs.

Democrats are rallying to defend Medicaid, as Republicans in a separate committee hearing on Tuesday are set to argue that the health program that serves 71 million people would not suffer from their plan to tighten eligibility and require some recipients to work. That would reduce spending by $715 billion and kick 7.7 million people off the program, according to the nonpartisan Congressional Budget Office.

Republicans on the House Energy and Commerce Committee, which oversees Medicaid, faced questioning from Democrats who object to new limits on funding for groups like Planned Parenthood that facilitate abortion services.

Medicaid supporters lined up outside the hearing to protest the planned cuts.

"We're here to save our Medicaid," said Kevin McPhan, 52, a Chicago resident who said he was diagnosed with cancer two-and-a-half years ago. He had been working as a general contractor before he got sick.

"I'm just fighting this cancer and we've got to fight for our civil rights for Medicaid," McPhan said.

As the hearing got underway, police escorted out at least five protesters, including three who were in wheelchairs.

Republicans also plan to increase work requirements for those who receive SNAP food benefits and shift some costs to states. That would save $230 billion but likely reduce enrollment in the program, which serves 41 million people.

House Speaker Mike Johnson is pushing his party to pass the package out of the House by Memorial Day on May 26, less than two weeks away.

The country's looming debt ceiling deadline this summer is also pushing Republicans to work fast. The package would raise the debt limit by $4 trillion and Treasury Secretary Scott Bessent has urged lawmakers to act by mid-July to avoid a default that would upend the global economy.