House Republicans wrestle with how to make $1.5 trillion in cuts

By Lauren Fox, CNN

(CNN) — After a frenzied week of small group meetings, leadership listening sessions and private committee discussions, House Republicans are still grappling with core disagreements over how they will extract $1.5 trillion in savings over the next decade. Questions over how to overhaul Medicaid and which tax provisions to pay for are front and center and the divides are still so entrenched that GOP members and aides aren’t ready to begin hearings next week on key elements of the bill.

To sum it up, one GOP member close to the talks told CNN when asked about Medicaid negotiations, “we’re not in a good spot, but we’re gonna get there.”

Asked about tax negotiations, “we’re not in a good spot, but we’re gonna get there,” they repeated.

The reality of what $1.5 trillion in cuts actually looks like and the very real impact they could have on constituents is beginning to take hold in the House GOP conference. It’s making rank-and-file members – especially swing-district members – incredibly nervous that moving ahead with them could hand Democrats a messaging playbook for 2026 that will be hard to combat.

The bottom line: Speaker Mike Johnson hoped to have this bill passed out of the House by Memorial Day. The fact that key committees are still wrestling with basic decisions on which direction to go shows that it’s getting harder and harder to see how Republicans are going to meet that ambitious deadline. Can it happen? Absolutely. Johnson has demonstrated time and time again he can defy expectations and President Donald Trump has helped get Republicans in line before. But in Congress, things typically take longer than leadership predicts they will.

The House Agriculture Committee and the House Energy and Commerce Committee are no longer planning to move ahead next week to approve portions of the President’s agenda. They will now aim for the week of May 12, the same as the tax-writing Ways and Means Committee. But the schedule is tenuous because the biggest sticking points all are within their jurisdiction.

So what is the issue?

The House Energy and Commerce Committee needs to find $880 billion in savings within its jurisdiction. While the committee can roll back certain energy provisions passed during the Inflation Reduction Act and change proposals on broadband and spectrum, the largest piece of savings is going to come from changes to the Medicaid program.

Republicans can implement strict work requirements, revive more frequent eligibility checks and cut down on waste, fraud and abuse, like ensuring that no one who is illegally here in the US can access the program (which is already illegal.) Republicans agree those changes are palatable and the budget scores on them add up to several hundred billion dollars. But, to get to $880 billion in savings, Republicans will need to fundamentally wrestle with the federal government’s contribution to the Medicaid program – and some Republicans fear that will amount to fewer people in their home states being covered.

“I’ve said no, look, my bottom line is, I am not cutting benefits for eligible recipients period. So obviously, as we work through the provisions, E and C is going to have to recognize that at the end of the day, the only number that matters here is 218,” New York Republican Rep. Mike Lawler said.

Privately, several House Republicans lament they may not be able to reach the ambitious $880 billion target after all. Many are uncomfortable with the proposals floated that would elicit major savings, like changing how much the federal government contributes to states or phasing in a cap on how much the federal government contributes to Medicaid expansion recipients.

And this isn’t just a House issue. Senate Republicans are warning that changes to federal contributions could cause major chaos in their states and would be a nonstarter. Some states that elected to expand Medicaid under Obamacare did so with strict rules that the expansion could end if the federal governments’ contributions changed. Other states like Missouri, for example, passed a constitutional amendment that could force the state to take on a lot more of the cost burden if the federal contributions suddenly drops.

“The first question I will ask anybody who proposes that whether it is FMAP, rate of growth whatever changes to Medicaid, are you fully dialed into the implications of the triggers that many red states have for a basis of Medicaid expansion?” Sen. Thom Tillis, a Republican from North Carolina said. “They better have done their homework.”

For now, Energy and Commerce is trying to find a combination of changes that their members can accept, hence why the committee isn’t ready yet to announce a markup and proposal that outlines exactly what they are going to do. As with all things, this could change, but multiple members and aides contend there is still significant work to do.

The hangup on tax and food stamps

Other major sticking points revolve around how to satisfy a handful of New York, New Jersey and California Republicans who want to make sure the threshold individuals and married couples can deduct for state and local taxes goes up. The cap, which helped pay for the 2017 tax bill, isn’t expected to return to where it was before that law passed. But many of these members from the high-cost states fighting hardest for this increase in the SALT cap weren’t here in 2017 and want something. It’s not cheap though and will ultimately cut into some of the other provisions that the committee can include.

Another major hangup is what to do about individual clean energy tax credits that conservatives balk at, but are important to a handful of Republicans who want to protect them for their districts and constituents. There have been numerous coalitions of GOP members who have asked Ways and Means Chairman Jason Smith to spare specific provisions related to nuclear energy and incentives to help businesses who invest in clean energy. Each one of those tax credits that Republicans keep means less money for other tax provisions, including those that are important for Trump like no tax on tips or overtime, another area where the bounds of the proposal are still under debate.

In the House Agriculture committee, which is supposed to find $230 billion in savings, there has been debate about requiring states to play a role in helping fund food stamps known as the Supplemental Nutritional Assistance Program. The program is currently funded entirely by the federal government and many Republicans on the committee including some conservatives have expressed strong concerns with the idea.

“That is a non-starter for me,” Wisconsin Republican Rep. Derrick Van Orden said.

In Ag, like in Energy and Commerce, there are some Republicans who are beginning to openly question if the committees can meet their ambitious savings target given the lack of interest in cutting into programs like food stamps.

Remember, this is why the Senate set such a low bar for cuts: In the Senate, their target is far lower. Under budget rules, it’s the Senate targets that matter and are binding. The Senate only has to find $4 billion total in savings overall across all the committees. That is an escape hatch some swing-district Republicans are looking closely at. They believe they can far outpace $4 billion in cuts. But they aren’t sure they can get to $1.5 trillion.

This gets back to the age-old House math problem. If you lose too many conservatives because the cuts aren’t substantial enough, the bill still can’t pass. And there are a lot of conservatives on the House Budget Committee who could kill the proposal in that committee if Energy and Commerce and Agriculture don’t come back aggressive enough with savings.

What we saw, what we’ll see and where we go from here.

Trump’s “one big, beautiful bill” is essentially the ultimate group project. The legislation requires action from nearly a dozen committees before the House Budget Committee puts all the pieces back together and sends it to the Senate. While some of the key committees are still working through big problems, this week several House Republican committees did move ahead.

The House Homeland Security Committee approved plans to invest billions in funding for border barriers and Customs and Border Protection facilities, updates to border technology and funding for CBP personnel.

The House Armed Services Committee approved plans for a $150 billion investment in defense from funding for the “golden dome” air defense system, investments along the Southern border, military equipment upgrades and investments for servicemembers.

The House Transportation and Infrastructure Committee approved its budget reconciliation proposal that included investments in air traffic control and coast guard and cut programs that were passed in President Joe Biden’s Inflation Reduction Act, like cutting the FAA’s alternative fuel program. The original proposal did change during the markup after conservatives rejected a $20 vehicle registration fee that they argued penalized gas vehicles, a sign of how even small investments to offset the cost of the bill are hard to enact in a narrowly divided Congress.

The House Judiciary Committee approved their piece of reconciliation out of committee, which included new asylum fees and a substantial investment to ensure the administration can meet deportation goals.

The House Financial Services Committee passed its piece of reconciliation by meeting a modest savings targets they had to reach.

The House Oversight Committee approved its portion and passed a proposal that includes $50 billion in savings. One piece of that was a major reform to the federal pension system, which some Republican lawmakers have already expressed concerns about. GOP Rep. Nick LaLota of New York told CNN Thursday he wasn’t ready to draw a red line, but it was not a proposal he backed.

The timeline ahead

Next week is the week of May 5. We expect right now that leadership and committees will still be finalizing key details of their bills.

Then, we are on the week of May 12. Assuming all the details are hashed out, key committees could hold hearings to advance their proposals. That will take significant time as Democrats are expected to push votes on dozens upon dozens of amendments.

That brings you to the week of May 19, the final week of session scheduled before Memorial Day. That is when the House leadership had predicted they could vote.

But if committee markups take the entire week of May 12, the budget committee will need to package all the bills together, House rules will need to meet and a final vote will need to happen all in a week’s time. That’s a major lift.

Again, none of this is impossible. It just isn’t easy.

CNN’s Sarah Ferris and Haley Talbot contributed to this report.

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