House GOP's "One Big Beautiful Bill" Faces Internal Opposition

The House Ways and Means Committee recently advanced a comprehensive tax reform package, dubbed the "One Big Beautiful Bill," aiming to make permanent several provisions of the 2017 Tax Cuts and Jobs Act (TCJA) and introduce new tax cuts. However, the bill has encountered significant hurdles due to internal divisions within the Republican Party.

Key Provisions of the Proposed Legislation

The proposed bill encompasses a range of tax reforms, including:

• Permanent Extension of TCJA Provisions: The bill seeks to solidify the reduced individual income tax rates and increased standard deductions introduced in 2017.

• Child Tax Credit Enhancement: An increase in the child tax credit from $2,000 to $2,500 for tax years 2025 through 2028, reverting to $2,000 thereafter, with adjustments for inflation post-2028.

• SALT Deduction Cap Adjustment: Raising the state and local tax (SALT) deduction cap to $30,000 for joint filers earning under $400,000, with a phase-down to $10,000 thereafter.

• New Tax Breaks: Introducing deductions for tipped income, overtime pay, and auto loan interest on American-made vehicles.

• "MAGA Accounts": Establishing tax-preferred savings accounts for children born between 2025 and 2028, with initial funding of $1,000 and annual contribution limits.

• Repeal of Green Energy Tax Credits: Accelerating the expiration of various clean energy incentives, including those for electric vehicles and renewable energy projects.

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Internal GOP Disagreements

Despite the bill's advancement in committee, it has faced opposition from within the Republican ranks. On May 16, 2025, a key vote in the House Budget Committee was blocked as five Republican fiscal conservatives joined Democrats in voting against the legislation. Their concerns centered on the bill's projected $3.8 trillion addition to the federal deficit over the next decade and the perceived inadequacy of proposed spending cuts. Additionally, some Republicans from high-tax states like New York and California have pushed for further increases to the SALT deduction cap, arguing that the proposed $30,000 cap is insufficient for their constituents.

Potential Implications

If enacted, the bill's provisions could have widespread effects:

• Taxpayers: Many individuals and families could see reduced tax liabilities due to the extended TCJA provisions and new deductions.

• Businesses: The repeal of certain green energy tax credits may impact investment decisions in renewable energy sectors.

• Federal Budget: The significant increase in the federal deficit raises concerns about long-term fiscal sustainability.

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Next Steps

House Speaker Mike Johnson has expressed a desire to bring the bill to a full House vote by Memorial Day. However, the internal divisions within the Republican Party pose challenges to achieving consensus. Further negotiations and potential amendments may be necessary to reconcile differing viewpoints and advance the legislation.