Key Points:
- Speaker Mike Johnson and GOP leadership are pushing to pass a sweeping tax and spending bill, dubbed the 'megabill,' before President Donald Trump's July 4 deadline.
- The ultraconservative House Freedom Caucus is threatening to block the bill, citing concerns over increased deficits, insufficient spending cuts, and policy changes.
- The Senate-passed version of the bill would add an estimated $600 billion to $761 billion to the deficit, with some analyses projecting up to $3.4 trillion over a decade.
- Freedom Caucus members object to provisions on immigration, Medicaid cuts, and the rollback of clean energy tax credits.
- GOP moderates, particularly from swing states, are also concerned about Medicaid cuts and their impact on state budgets.
- House leadership is relying on President Trump and the White House to persuade hardline conservatives to support the bill.
- A procedural vote in the House has stalled, with several Republicans voting 'no' or withholding their votes, leaving the bill in limbo.
- Protesters have gathered outside the Capitol, voicing opposition to cuts in Medicaid and nutrition programs.
- The bill includes major tax cuts favoring higher incomes, permanent business tax breaks, Medicaid work requirements, and increased border security funding.
- The outcome remains uncertain as GOP leaders race against time and internal divisions to deliver the bill to Trump's desk.
As reported by Sarah Ferris of Politico, Speaker Mike Johnson and his Republican leadership team are racing to pass a massive tax and spending package—referred to as the 'megabill'—before President Donald Trump's self-imposed July 4 deadline. However, their efforts are being hampered by fierce resistance from the House Freedom Caucus, whose members argue the Senate-passed version would add more than $600 billion to the deficit, violating prior budget agreements.
What Are the Main Objections from the House Freedom Caucus?
According to Ronny Reyes of the New York Post, the 32-member Freedom Caucus has publicly declared it will not support the Senate's version of the bill, insisting that it fails to deliver adequate spending cuts and instead increases the national debt by $651 billion—excluding interest, which could nearly double that amount. The group stated on X, "That’s not fiscal responsibility. It’s not what we agreed upon," and demanded significant changes to align the bill with the House's original budget framework.
A memo circulated by the Freedom Caucus, as reported by Politico and The Hill, details more than a dozen Senate changes, including deeper Medicaid cuts, higher deficit projections, and less stringent clean energy tax credit repeals than anticipated. The memo criticizes the bill for breaking the House's promise of matching every dollar in tax cuts with a dollar in spending cuts, stating, "This was not what [Senate Majority] Leader [John] Thune and Speaker [Mike] Johnson promised".
The Freedom Caucus also objects to:
- The bill's continued allowance of taxpayer-funded transgender surgeries for adults and minors.
- Failure to fully remove undocumented immigrants from Medicaid rolls.
- The possibility for undocumented parents to open new 'Trump Accounts.'
- Weakening of the repeal of clean energy tax credits.
- Hundreds of billions added to the deficit.
Freedom Caucus Chair Andy Harris (R-Md.) told Newsmax, "There’s a little work left to be done, but if the president calls the Senate back in town, we should be able to do it," indicating ongoing negotiations and a call for more Senate involvement.
How Are GOP Moderates Responding to the Megabill?
As reported by Politico, a separate bloc of GOP moderates from states like Pennsylvania, New York, and North Carolina are alarmed by the bill's stringent cuts to state provider taxes that fund Medicaid. These moderates, including Reps. Jen Kiggans (R-Va.) and Rob Bresnahan (R-Pa.), have written to Speaker Johnson and Senate Majority Leader John Thune, expressing their concerns about the impact on Medicaid and state budgets.
President Trump has scheduled meetings with both moderates and fiscal hawks at the White House, attempting to bridge the gap between the party's factions and secure enough votes for passage.
What Is the Status of the House Vote and What Are the Stakes?
According to reporting by the News From the States team, the House has been at a standstill, with a crucial procedural vote left open for hours as GOP leaders try to persuade four Republicans who voted 'no' and nine others who withheld their votes. Key holdouts include Reps. Andrew Clyde (R-Ga.), Brian Fitzpatrick (R-Pa.), Keith Self (R-Texas), and Victoria Spartz (R-Ind.), while Freedom Caucus Chair Andy Harris has also withheld his vote.
Rep. Chip Roy (R-Texas) told Yahoo News that a large group of fiscal conservatives is closely examining the Senate amendments and potential executive actions, weighing whether changes could be sent back to the Senate for further negotiation.
Speaker Johnson, quoted by Politico, admitted, "I’m not happy" with the Senate's changes but remains "optimistic we’re going to land it at this point," as he continues to negotiate with both hardliners and moderates.
What Does the Megabill Contain and Who Benefits?
As detailed by News From the States, the bill would:
- Extend and expand the 2017 GOP tax law, with tax cuts disproportionately benefiting higher-income earners—the top 1% would receive cuts three times larger than those in the bottom 60% of after-tax income.
- Make permanent certain business tax breaks for investments and research and development.
- Overhaul Medicaid by requiring some recipients to work, participate in community service, or attend educational programs for at least 80 hours a month.
- Block Medicaid funding to Planned Parenthood for one year, forcing enrollees to seek alternative providers for routine healthcare.
- Require states to partially fund the Supplemental Nutrition Assistance Program (SNAP) if they cannot reduce error rates, impacting roughly 42 million low-income Americans.
- Increase spending on border security and defense, including funding for the "golden dome" missile defense system and additional southern border barriers.
- Boost funding for federal immigration enforcement to support mass deportations, a key Trump campaign promise.
- Raise the debt ceiling by $5 trillion, aiming to avoid another debt crisis before the next midterm elections.
What Are the Deficit and Debt Concerns?
The nonpartisan Congressional Budget Office estimates the Senate-passed bill would increase deficits by $3.4 trillion over the next decade compared to current law. The Freedom Caucus and other deficit hawks argue that the Senate version adds $761 billion to the deficit without interest, and over $1.3 trillion with interest, compared to the House version passed in May.
According to The Hill, the Freedom Caucus memo labels the Senate bill a "fail," criticizing both Majority Leader Thune and Speaker Johnson for deviating from the House's commitment to fiscal discipline.
How Is the White House Involved in the Negotiations?
Politico reports that House GOP leadership is relying on President Trump and the White House to take the lead in persuading the Freedom Caucus and other holdouts. "The sense is the White House needs to deliver the Freedom Caucus — that's the project of the day," said an anonymous source close to House leadership. Trump has been "working the phones pretty consistently over the last several days," according to a White House official, and is expected to meet with both moderates and fiscal hawks to address their concerns.
What Is the Public Reaction?
As reported by News From the States, protesters have gathered outside the Capitol, carrying signs and voicing opposition to the bill's Medicaid and SNAP cuts, as well as the rollback of clean energy tax credits. The public debate reflects deep divisions not only within the GOP but across the broader electorate.
What Happens Next?
The outcome remains uncertain. Speaker Johnson has 24 to 48 hours to win over enough Republicans to pass the bill intact, as any changes would require another Senate vote and further delay. Severe thunderstorms in Washington are also threatening full attendance, adding another layer of unpredictability to the proceedings.
As of late Wednesday night, the House vote remained open, with several GOP members still undecided and the leadership working overtime to avoid a legislative defeat that could derail President Trump's legislative agenda ahead of Independence Day.