The GOP Holdouts on Donald Trump’s ‘Big Beautiful Bill’
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The GOP's one big, beautiful reconciliation bill gets voted down by the House Budget Committee amid a revolt by fiscal conservatives who say it doesn't go far enough. What does Speaker Mike Johnson do next since he's been trying to meet a Memorial Day deadline to get the GOP's agenda through?

Welcome, I'm Kyle Peterson with The Wall Street Journal. We're joined today by my colleagues, columnist Kim Strassel and editorial board member Mene Ukweberua.

The House Budget Committee's task on Friday morning was to stitch together the separate bills for the big, beautiful reconciliation package that the individual committees have worked up, including the tax section that had gone through the Ways and Means Committee, the Medicaid section that went through the Energy and Commerce Committee, and the

But the surprise on Friday was a revolt by Republicans blocking the bill. The vote on the House Budget Committee was 16 and 21 against. The no's, including Republicans Chip Roy of Texas, Ralph Norman of South Carolina, and Andrew Clyde of Georgia. Let's listen to a clip of one of those dissenters. This is Congressman Chip Roy. We are making promises that we cannot keep.

We do need to reform it. We need to stop giving seven times as much money to the able-bodied over the vulnerable. Why are we sticking it to the vulnerable population, the disabled and the sick, to give money to single able-bodied male adults? We shouldn't do that. We should reform it. But guess what? That message needs to be delivered to my colleagues on this side of the aisle, too.

We are writing checks we cannot cash, and our children are going to pay the price. So I am a no on this bill unless serious reforms are made today, tomorrow, Sunday. We're having conversations as we speak, but something needs to change or you're not going to get my support. I yield back. One of Congressman Roy's complaints is that the work requirements being added to Medicaid for able-bodied adults are not starting until 2029. He said the fact

of the matter is this bill has backloaded savings and has frontloaded spending. The House Budget Committee then adjourned. The chairman said there would be no more action until next week, wishing his members godspeed and safe travels.

Kim, let's start with the merits of what has been written up for this big, beautiful reconciliation package. We talked about some of the details on podcasts earlier this week, the permanence of some of those rate cuts, tax rate changes from the 2017 reform, some of the giveaways, the SALT deduction and the new MAGA accounts, for example, for baby bonds, essentially a baby bonds program. But what's your view of how the overall package has shaped up? Yeah, I want

call this, Kyle, a tepid tax and reform of entitlements and that it's disappointing, I think, for some people like me that looked at this trifecta of Republicans that came in and saw some of the boldness coming out of the Trump administration and thought, OK, well, this is the opportunity for big things to happen.

What you had is political reality instead intervene. And you've got a tax reform that does at least make permanent some of the better parts of the 2017 reform and locks in rates. So no one will see a tax hike. You've had some incremental changes as well in taxes. You've also had some bad tax provisions in my mind as

that don't really do anything for economic growth. That would be like no taxes on tips, no taxes on social security, no taxes on overtime. These are all campaign promises that Trump made that are meant to kind of buy certain constituencies, but they don't really help the economy.

On the reform side, I think one of the best parts of the bill is a pretty good food aid reform, which has to do with what we call food stamps that have some new requirements that states pitch in a little bit more. Also, that there be some more work requirements in there. I think the biggest disappointment has been the Medicaid reform where there's a lot of waste, fraud and abuse and fraud.

as where you heard Chip Roy there saying, we've had a program that's really been hijacked over the years, in particular, starting with the Obama years. We're now just sort of using it as basically a first step in a Medicare for all, where we were starting to be giving it to a lot of people that the

program was never intended to serve. It was supposed to serve the truly poor, pregnant women, disabled people, and instead we're handing it out to a lot of able-bodied adult men who are capable of working. They've got a few new requirements in there, but again, they are backloaded, meaning a lot of the reform provisions in this bill, including those work requirements for Medicaid, also including these really good, because we want to finally see this happen, if

phase-outs of clean energy tax credits, which are very distortionary. That's all in the bill, but none of it starts until 2029 after the midterm election. And in fact, potentially after Donald Trump is out of office and maybe a Democratic president is in office. So it's like Republicans wanted to get the credit for

for doing this, but hold off the day of reckoning and maybe even use some future bill to sort of silently walk away from some of that. And conservatives are not happy about it in the House, as you heard. Mene, one of the things that is notable about this debate to me is the objections you're hearing from Republicans. There's the SALT caucus, of course, in the Northeast, New York, New Jersey, that wants a increase in the state and local tax deduction. It's currently $10,000.

What's on offer is $30,000 and they say we'd like something more like $80,000 please. You have the fiscal hawks who say the size and the scope of government spending exploded during the pandemic, during COVID, and we ought to be able now to roll some of that back.

We have unified Republican control of Washington. You have the moderates in districts who are afraid of upsetting any of the voters if they are in a district that was narrowly won by President Trump or maybe even won by President Biden. But they are Republicans in those areas.

And by the way, that's only speaking of half of Congress. We also have the Senate where there are separate concerns being raised. So, for example, Lisa Murkowski, Republican in Alaska, is complaining that there has been investment made on the basis of these clean energy tax credits that have been provided.

put into law. And so Republicans should not change those too quickly. So you don't strand those investments. You have Josh Hawley of Missouri, who has objected to any changes to the Medicaid program. It seems like they have not

come close to solving the actual substantive debates that are going to have to be bridged in order to get this over the finish line. Yeah, I mean, there's a whole lot to sort through there because there is a whole lot being discussed and debated in both chambers of Congress with regard to this reconciliation tax bill. But I do think that you have to begin by trying to put some of those complaints in different buckets.

So at the surface level, from someone watching from the outside looking in, you could say the GOP has a million different factions. Everyone has their own parochial interest, and that's why they can't all get on board to support this bill and keep it moving forward. But if you look at what is the purpose of this bill supposed to be, what does the Republican Party traditionally stand for? It's fiscal responsibility and also economic growth.

And so I think that there are some of the demands that cut against that priority. And you could put the reforms to Medicaid matching, like Kim mentioned, and also the demand to increase the cap on the salt deduction in that bucket, the kinds of requests that would actually diminish the ultimate purpose of the bill, which is to get the economy growing again, which is what Americans elected Donald Trump to do.

Then there are demands like the ones that Chip Roy is making right now in the budget committee that basically would move in the direction of moving the bill toward its ultimate purpose by having some of these spending cuts come earlier and not exploding deficits in that way. And so as leadership is trying to balance between these factions,

They can't see their goal as just trying to get everyone to a position where they can get on board and agree. They need to make sure to actually preserve the purpose of the bill, which is economic growth and fiscal responsibility. So I do think that Republicans are going to have to stand for the courage of their convictions on some of these choices. Things like reforming Medicaid to decrease the federal match that's going to some of these states. That's something that a talented member of Congress should be able to run on and defend.

yes, some people are going to lose potential. ADP imagines a world of work where smart machines become too smart. Copier, I need 15 copies of this. Printing. By the way, irregardless, not a word, Janet. Yeah, I know. Page six should be regardless of or irrespective of. Just print them, please. If it were a word, Janet, it would mean without irregard, which is... Copier! Switch to silent mode. Let's put a pin in it.

Anything can change the world of work. From HR to payroll, ADP helps businesses take on the next anything. Actually, some of the benefit that they might be able to get if Republicans make this change, but they should be able to say, we are passing this bill to get the economy growing again. And that means that your young 28-year-old son who's

staying at home is going to be able to get a better job and isn't going to need to depend on federal largesse. And also, regardless of whether those reforms to Medicaid come in 2026 or in 2029, Democrats are going to run campaign ads saying Republicans cut Medicaid regardless. It's not going to make a difference when the cuts actually kick in. They're still going to attack Republicans for doing it. So if Republicans think this is worth doing, they should say that it's worth doing up front.

and actually get on the campaign trail and defend their message. So I think that that's what Donald Trump needs to be thinking about. That's what the Republican leadership needs to be thinking about. Let's do the reforms that we actually need to make this bill effective and then focus on how we can sell that to the American people and convince them that this is going to be in their interest. Hang tight. We'll be right back in a moment.

Welcome back.

What is the argument that you're making? And I mean, do you think that President Trump could bring order to this chaos and at the very least make clear to some of these dissenting members on some of these issues? Maybe part of the difficulty is he would have to choose which of them to say, this is what I want. This is what the Republican Party is going to stand for. Maybe it's the salt deduction and we're going to do 20 and that's that.

That's where we're going to come down and that's where we should draw the line. I mean, do you think that he is a strong enough figure to get everybody in the party on the same page here, at least with respect to what should go in this big, beautiful bill, as he coined that phrase? Well, if you're going to talk about Donald Trump bridging divides, I think first you have to define divides here. And they become a little bit more muddy, although they still basically fall into two camps.

I mean, you've always had a divide between more traditional fiscal conservative Republicans. These are the chiproys of the world. And then what we broadly call the kind of moderates, I like to call them the spenders. What's changed in recent years is that you now have this kind of populist instinct in the party and their kind of views about this that are

We need to do more for the working class and we need to look into industrial policy and we need to be rewarding families with tax credits to have children. And some of these kind of, in my mind, I call them democratic vote, getting exercises where you target constituent ranges and then you tailor your policy to try to get their vote up.

That's always been the way Democrats have gone about politics. By the way, look at how that has turned out for them. But we now have a contingency of people in the Republican Party that follow along there. Their interests ally with the spenders and with the moderates. And so to the extent that Donald Trump in his cabinet has kind of conservatives on one side and populists on the other, he's hearing both of them whisper in his ear.

And it's left him in this particular regard, I think both on matters of principle and his philosophy divided, but also strategically divided. He made a decision early on that he was not going to engage in any of these discussions that are going on in the House. Let it work its will. They're kind of talking behind the scenes and giving guidance and making their preferences known, but he has not weighed in now.

My argument in my column is that we are coming to a moment where he's probably going to have to do that because the divides between these two camps have simply grown. I think they might actually get a house product here because the things that Chip Roy and folks are asking for.

are simply, they're not demanding for yet bigger cuts. They agreed to this $1.5 trillion in deficit reduction over 10 years at the beginning of the reconciliation process. They're not now backtracking on that deal. But what they are demanding is that there's not as many budget gimmicks in here.

that the cuts need to happen a lot sooner than they are. They at least need to be equalized with the spending. You can't have all this spending going out the door immediately and then just wait to take your medicine in 2029. So they want it to happen more like 2027. I think they probably get there at the end of the day, maybe arguably without Donald Trump's help.

But they are also, the conservative, are expecting that when this lands in the Senate, there is going to be another huge fight here. There are a lot of Senate conservatives that are not happy with what's in this bill. They do not think it's gone nearly far enough. Ron Johnson from Wisconsin is so angry about the bill. He's like, let's blow it up. We need to start over. We need to do this in pieces. This big, one beautiful bill is one big, beautiful mess.

And he's not alone in that sentiment. And everybody always looks at the House 217, 217, and Johnson can only lose two votes. Well, you know, you can't lose that many votes in the Senate either. And if you've got six Republicans that are unhappy with this, and that's before you look at the Murkowskis and the Susan Collinses and some of the moderates in the Senate that might be uneasy with some of the things that are in this bill.

there's going to be a moment at which Donald Trump is going to have to understand the courage of his convictions and decide, does he want a pro-growth bill that, by the way, locks in so many of the things that he's already tried to do with Doge, et cetera? Or is he just going to side with the spenders and the populace who are always on board for more money, less reform, because they think it helps them in their elections? Which I don't even think is even true. But

Speaking of the hands-off approach that so far President Trump has been taking, this is what he put on Truth Social this morning at about 10 a.m. shortly after the House Budget Committee was meeting. It says Republicans must unite behind the one big, beautiful bill. He goes on to say that the country will suffer greatly without this legislation, the taxes going up 65%.

He says, 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. And, Manay, obviously, that does not specify which of these people are the grandstanders, who is right and who is wrong, open the objections to the bill, how the bill should actually be written. And obviously, that did not get the job done this morning in the House Budget Committee.

Well, I have slight sympathy for the way Donald Trump went about communicating that message in that that's what he was saying to the public. He's basically saying, this is the core of my agenda. I need everyone to resolve their differences and get it done. There are all these factions, but ultimately people are going to need to come to an agreement. That's a wonderful message to tell the voters about how Donald Trump is going about this process.

But behind closed doors, he should be much more specific in the way that you're describing. He needs to be able to decide for himself, okay, I have all these factions here. They have irreconcilable demands. Some people want to spend more. Some people want to spend less. Some people want cuts to come up front. Some people want to delay the cuts.

He has to decide what he wants. It makes perfect sense that from the beginning, he said, I'm going to respect Congress and allow them to take the lead on hammering out some of the details here. I know that all these people have constituents who they're representing who have different interests. And so I'll leave the floor open for some of these disagreements to come out. But ultimately, he's going to own what comes out of this. He's certainly going to own it if nothing comes out of this and people fail to get the bill passed.

And he has veto power over the ultimate product that comes out of Congress. And so it's exactly an appropriate time now for the president to say, well, I promised on the campaign trail that you were going to get salt back. But now looking at it, it just seems like we're not going to be able to pay for some of the real pro-growth components that we need if we lift the cap up to anything above $30,000. And so I'm going to tell some of these members from New York and New Jersey and California, we're not going to go above that.

And that would stop them from being able to use Donald Trump's ambiguity on the issue as leverage when they're negotiating within Congress. So the responsibility to get it done in the way that President Trump seems to really insist that it get done now lies ultimately with him. And he is the person who really would be able to resolve some of these disputes and keep it moving forward. Hang tight. We'll be right back in a moment.

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Don't forget, you can reach the latest episode of Potomac Watch anytime. Just ask your smart speaker. Play the Opinion Potomac Watch podcast. From the opinion pages of The Wall Street Journal, this is Potomac Watch. Welcome back. Kim, this challenge that Republicans are having right now of bridging all of the divides, solving all of the GOP debates at once on all of the issues was always going to be the difficulty of the one big, beautiful approach.

And remember, months ago, this was the debate in the Republican Party. The GOP has two shots at reconciliation because it can do budget reconciliation for this fiscal year and then later budget reconciliation for next fiscal year.

And ultimately, with Trump weighing in and naming it the one big, beautiful bill, that was the decision that was made. And it's interesting now, Ron Johnson, Senator from Wisconsin, is outright making a pitch and saying that was a mistake. He's saying we should go back to the drawing board. We should start with things that Republicans agree on, and then we should go to the tax provisions. This is an interesting quote from Senator Johnson. He says...

I keep being told, well, that ship has sailed. My response is, well, call it back to port. I think the other ship might be like the Titanic and might be going down, unquote. And Kim, I mean, what do you make of that? We are pretty far down the road in the Republican Party already. So it is not so easy to get everybody to suddenly start talking about two big, beautiful bills and there'd be something lost immediately.

in trying to switch tactics like that. But what do you make of Ron Johnson's suggestion there? One point I would make here is that people should remember that actually these reconciliation bills are always hard for any party that does them. You know, when Joe Biden went to do his Inflation Reduction Act, it took him 10 months to get that product over the line because you end up having Joe Manchin and Kyrsten Sinema and a lot of inter-party disputes about how that was going to play out.

For a while, it looked as though the entire project might be dead.

So they've got the rest of this year. I know that people are eager to get it done. And one of the arguments against Ron Johnson's approach is that, especially in light of Donald Trump's tariffs and the massive amount of uncertainty out in the economy, that there is a merit to locking in the current tax situation and getting the rules of the road set so that businesses at least have that certainty under their belt as a counterbalance to some of the tariff uncertainty.

But Ron Johnson's right. It would not be inconceivable and nobody should view it as the world's largest calamity if this bill ultimately collapsed. I think what he was saying there and that Titanic reference was actually a little bit of a shot across the bow as in I'm the iceberg. And so you might just bear in mind that, you know, you need like all of us to support it in the Senate. And it would only take three of us or three of us to derail this. So we're the big white icebergs and you should take heed.

Look, the thing that he suggests, too, is also not the wildest idea. There aren't a lot of things that Republicans do all agree on at the moment, including defense spending, border spending, some obvious cuts and rollbacks that they want to do that have been identified by Doge, a lot of which have to do with Biden's climate agenda. That would be an easy thing to cobble together into a package.

and give them more time to actually sit down and think through these tax provisions, which have been done in a bit of a rush. House Ways and Means Committee, Jason Smith would say, no, it's not been in a rush, at least not on our side, because we've held the gavel for two years. We did field hearings on all of these pieces of the tax bill. We knew what we wanted.

Yeah, to a certain degree. But then you look at the salt throwdown that's going on, and clearly there are still a lot of divisions out there. And the Senate hasn't done nearly this much work. So I think that there could be some real wisdom to doing this. Mostly, I think what Ron Johnson and senators want

would like those that are fiscal conservatives is they'd like to slow the process down for another reason. They really want to do something more on the deficit. They argue, and I am completely in their camp on this, that $1.5 trillion in deficit cuts over 10 years when we are operating, we have spent $6 trillion additional dollars since COVID happened.

and that we have budgets that are 50% higher than they were before COVID, that we need to be engaging in a process where we go line through line through the budget, something that Congress never does, and actually have all members of the caucus present and make people have to make a case for why this program must stay or why that program can't go, and really try to get back to a spending level closer to what we were at before the COVID blowouts.

He'd like to see that process, but that process cannot happen in the time frame that Mike Johnson has for the House at the moment. And so they'd like to see it slow down for that reason. I take Kim's point that the trade wars have raised the need to settle the tax portion and get some sort of economic booster in terms of positive tax reform. The other question that seems to me is if you go back to a too big, beautiful bill situation, are you just

splitting up the arguments and you're going to have the same arguments. You're just going to have them in two packages instead of one package. But one thing that I think is interesting that would change maybe is if Kim is right and they would be able to delay it and go line by line, it would add the element of a deadline. And journalists know, like many people do, the motivating quality of a deadline that is coming. And that is part of the problem, I think,

If you think about the negotiations that are happening right now, it's one thing for Speaker Mike Johnson to say, we'd like to get this bill out by Memorial Day, and for the House SALT Caucus to say, well, I want more than that. And so I'm going to say that I'm going to vote no, and maybe we can keep negotiating a little while. It's another thing to do that if you're in November or early December, and

What is coming down the pike in a matter of weeks is this $4.5 trillion tax increase. It's a little harder, I think, for somebody who's in the SALT caucus to take that kind of brinkmanship approach when what is standing between the $4.5 trillion tax increase that is facing the American people is their vote of yes or no on this bill. And, Manay, we'll give you the last word today.

Yeah, I think it's always been a better than even money bet that this thing was going to go down to the wire, as almost every major piece of legislation tends to in Congress. We see this with every government funding bill, with every debt ceiling increase. As long as you have different factions that come into these negotiations with different priorities, they're going to want to try to press their advantage right until the very last minute when something ultimately needs to be passed.

So notwithstanding Mike Johnson's very ambitious targets for the timeline here, and I think that it's wise on his end to have ambitious targets to make sure that things actually start and things can keep moving along, it has never really been the case that was likely to get an ultimate outcome so far before the point where taxes are actually going to automatically increase and Republicans know that they'll own that if they don't

get together to get to an agreement. The problem is that the deadline on its own doesn't actually tilt the advantage to one party or another. You're going to still see the budget hawks leaning in up until the last minute. You're going to still see all of the salt Republicans saying that they want to get that cap increased up until the last minute. And so the deadline will definitely focus people's minds and

force them to think we need to come to a resolution, but you're still going to need outside pressure, particularly from President Trump, to tell you who is going to have to concede in the end versus who is going to be able to get some of their priorities advanced. Thank you, Manay and Kim. Thank you all for listening. You can email us at pwpodcast at wsj.com. If you like the show, please hit that subscribe button. And we'll be back next week with another edition of Potomac Watch.

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