House Speaker Mike Johnson (R-LA) May 15 met with members representing some of the pockets of concern that could sink next week's planned House vote on a budget reconciliation bill that features extensions of Tax Cuts & Jobs Act (TCJA) provisions expiring at the end of 2025 along with many other provisions. The meeting included Republicans from high-tax states seeking an increase in the state and local tax (SALT) deduction cap; Freedom Caucus Chair Andy Harris (R-MD) and Rep. Chip Roy (R-TX), who is outspoken in opposition to the level of savings and calling for Medicaid changes to take effect sooner; plus, moderates like Rep. Brian Fitzpatrick (R-PA), who have concerns with some of the spending cuts under the bill. Punchbowl News reported that, in addition to Rep. Fitzpatrick, Ways and Means Committee members Ron Estes (R-KS), Beth Van Duyne (R-TX), and Lloyd Smucker (R-PA) were in attendance.

The Speaker has met with concerned parties separately as the bill has been under development, but yesterday's meeting was remarkable in gathering together factions of members who have concerns for various reasons, representing the balancing act GOP leaders must contend with as time grows short to meet their self-imposed Memorial Day deadline for passage. With the 220-213 majority, House Republicans can only lose the votes of three members to pass the GOP-only reconciliation bill.

The more immediate concern seemed to be getting the bill through the House Budget Committee, whose plans to consider the bill assembling the recommendations of 11 committees — including Ways and Means and Energy and Commerce, who both passed their packages May 14 after overnight markups — today were in question. The Budget markup was set to proceed, but changes may be made as the bill proceeds to the Rules Committee and the House floor. Rep. Roy, a Budget Committee member, has said he is a 'no' on the current bill, over insufficient cuts to Medicaid, delayed implementation of new work requirements, and other issues. The combined text is available here.

Another Budget Committee member, Rep. Ralph Norman (R-SC), is also opposed to the bill as currently written, and this week posted on social media, "Delaying work requirements for able-bodied adults on Medicaid to 2029 isn't 'progress.' It's fiscally irresponsible … " The New York Times reported that Rep. Roy was the lone Budget Committee member opposed early Thursday, "But by the afternoon, a growing number of Republicans on the panel were venting their frustrations with the measure … " The report said, "House Republican leaders were discussing rewriting the work requirements so they would take effect sooner in a bid to appease conservatives. But it is a treacherous balancing act for Mr. Johnson, who must try to satisfy both his most conservative members agitating for significant spending cuts, and his swing-seat members … "

Bloomberg Government reported Budget Chairman Jodey Arrington (R-TX) as saying the markup of the combined bill could be delayed: "I haven't given up yet but there are concerns about having to get more information which would potentially delay this to next week so we'll see." The report noted that, "The committee is made up of 21 Republicans and 16 Democrats, but Rep. Brandon Gill (R-Texas), a Budget Committee member, is out on paternity leave, trimming the GOP majority to 20-16. If just two Republicans defect, a vote to advance the bill would fail in an 18-18 tie," meaning the opposition of Reps. Roy and Norman alone could cause the bill to fail in committee. Other members possibly opposed include Reps. Andrew Clyde (R-GA) and Josh Brecheen (R-OK).

According to a preliminary estimate by the Congressional Budget Office (CBO), the Energy and Commerce Committee Health Subtitle would reduce the deficit by at least $715 billion over the 2025–2034 period and reduce the number of people with health insurance by at least 8.6 million in 2034. The subtitle includes a variety of provisions focused on the Medicaid program, including changes to eligibility, enrollment and coverage; changes to provider taxes and state directed payments; imposition of work requirements for "able-bodied" individuals; and other provisions. But some conservative members see the Committee's proposals as insufficient.

Politico reported May 15 that, "A surprise holdout by ultraconservative members of the House Budget Committee Thursday … surrounded missing fiscal scores for the legislation and ongoing concerns about the depth of Medicaid cuts that Republicans are prepared to make." The report said the group of objectors called for: accelerating

• "the phase-out of tax credits enacted under former President Joe Biden"
• addressing Medicaid access for immigrants
• moving up the Medicaid work requirement start date, which leadership is reportedly considering

"We'll kill it," Rep. Norman said in the report. "I don't want to. But I will."

SALT - Republicans from high-tax Democratic states — including Reps. Nick LaLota (R-NY), Elise Stefanik (R-NY), Mike Lawler (R-NY), Andrew Garbarino (R-NY), Tom Kean (R-NJ), and Young Kim (R-CA) — have been seeking relief from the $10,000 SALT deduction cap, and say they are serious about not letting a tax bill pass without significant change to the provision. Rep. LaLota was quoted in the NYT as suggesting that the $3.8 trillion estimated cost of the Ways and Means bill — which is below the $4 trillion Republicans were thought to be aiming for and well below the $4.5 trillion maximum allowed for under the budget if spending cut targets were met — could allow for a more generous SALT cap. "We were pleased to see the reporting on the current Ways and Means bill, and they have a couple hundred billion dollars in room," he said.

On Fox News May 15, House Ways and Means Committee Chairman Jason Smith (R-MO) defended tax bill as written and said: "SALT is definitely getting a lot of attention, but we have known all along, when you have razor-thin majorities both in the House and the Senate, that we were going to just have to thread a very careful needle and balance it. I would say SALT is one of those items that we have to thread. Also, a lot of the green credits, repealing them from the IRA is another one. And then you can look at Medicaid cuts — Medicaid reforms, I should say. These are all things that we're right in the middle. And what we passed out of the House Ways and Means Committee yesterday, I believe, is a good balance, threads that needle."

Some press reports have suggested some members representing states where SALT isn't an issue, including Ways and Means members, are tiring of the issue and wary of more relief. "If you go north of [$30,000], you're talking about people that make between like $200,000 and $2 million," said Rep. Greg Steube (R., Fla.) in the Wall Street Journal. "And it's really hard for a Floridian, who has no income tax, to go back to his district and say we're subsidizing bad decisions in New York, California and New Jersey."

Energy tax — While Rep. Roy is concerned about Inflation Reduction Act (IRA) energy tax credit rollbacks not taking effect soon enough, there are also members with concerns with the more than $500 billion in cuts under the bill, and in a May 14 letter called for ensuring "certainty for current and future energy investments to meet the nation's growing power demand and protect our constituents from higher energy costs." The letter said:

• the Foreign Entity of Concern (FEOC) provisions are overly prescriptive and risk undermining competitiveness
• the current "placed in service" standard should be replaced it with a "start construction" standard
• the transferability of energy tax credits should remain available throughout the entire phase-out period

The letter was led by Rep. Jen Kiggans (R-VA), who recently introduced a bill addressing the phase-out of wind and solar tax credits and FEOC prohibitions, and signed by 13 other Republicans: Reps. Andrew Garbarino (R-NY), Mark Amodei (R-NV), Don Bacon (R-NE), Rob Bresnahan (R-PA), Juan Ciscomani (R-AZ), Gabe Evans (R-CO), Jeff Hurd (R-CO), Dave Joyce (R-OH), Young Kim (R-CA), Nick LaLota (R-NY), Mike Lawler (R-NY), Dan Newhouse (R-WA), and David Valadao (R-CA).

In a Bloomberg Government report, Rep. Garbarino "said he has concerns about how the bill would treat incentives for nuclear energy as well as new restrictive prohibitions on foreign entities such as China. 'There is a lot of stuff that is going to be fixed.'"

An EY Alert, "Proposed tax bill would phase out or repeal many energy credits in Inflation Reduction Act," is available here.

A WSJ analysis noted that some of President Trump's tax proposals, like an exemption for auto loan interest, were included in the Ways and Means bill, while others weren't. "In extending those parts of the bill scheduled to expire at the end of this year, Republicans made some MAGA-flavored changes. In 2017, they got rid of a costly and inefficient deduction for domestic production. Trump wanted a variant back: a reduced corporate tax rate on domestic manufacturing," the story said. "He didn't get that, but House Republicans did revive a pro-growth provision allowing immediate write-off of new equipment purchases and expanded it to new factories."

Congress — The Senate Finance Committee has set a hearing for Tuesday, May 20 at 10 a.m. on the nomination of former Rep. Billy Long (R-MO) to be IRS Commissioner.