By Joe Light

President Donald Trump is delivering a message to the GOP factions that might consider tanking his "big, beautiful bill": Fall in line.

On Tuesday morning, Trump met with Republicans in the House of Representatives to build support for passing an enormous bill that, among other things, would extend and expand the tax cuts passed during his first term. Trump visited the Capitol building as Speaker of the House Mike Johnson (R., La.) attempts to thread the needle between Republicans who think the bill doesn't go far enough to cut spending and those who want to give more relief to high-tax states.

The House Rules Committee plans to advance the bill in a vote early Wednesday morning, and Johnson has set a deadline for passing the bill out of the House before Memorial Day. That would kickstart work on the bill in the Senate, where it is expected to change significantly before coming to a final vote this summer.

Johnson has almost no breathing room. With a 220 to 213 majority, and no Democrats expected to support the bill, he can lose only three votes. That gives a lot of leverage to the House Freedom Caucus, a group of fiscal hawks who have pushed deeper cuts to Medicaid than the bill proposes, as well as to moderates from blue states who want to see a large expansion to the federal deduction for state and local taxes.

Before entering the meeting on Tuesday, Trump pushed back on both of those factions.

"We're cutting three things: waste, fraud, and abuse. We're not changing Medicaid" or other entitlement programs, he said. On SALT, Trump said raising the cap would mainly benefit governors in New York, Illinois, and California. "These are all very blue states," Trump said.

As it stands now, the bill would cut Medicaid spending by phasing in work requirements. The nonpartisan Congressional Budget Office has said that change would save roughly $301 billion over 10 years by reducing the number of enrollees in the program.

The federal government splits the costs of Medicaid's $800 billion in annual spending with states. Some fiscal hawks have called for further federal savings by requiring states to pay more, which could cause the states to scale back coverage. Johnson this week said such changes aren't on the table.

Recently, House leadership has also proposed sharply raising the SALT cap to as much as $40,000 with an income cap of $751,000 for four years. Earlier drafts of the bill had set the cap at $30,000 with an income cap of $400,000, a level that blue-state Republicans had called "insulting." Weeks before the election, Trump said at a campaign rally that he would support raising or eliminating the SALT cap.

During the meeting, Trump told SALT Republicans to fight for an increased deduction later and said Medicaid shouldn't be cut other than by implementing work requirements and removing coverage for illegal immigrants, said a person familiar with the matter. Trump said he is losing patience with holdouts, the person said.

Leaving the meeting with Trump, neither the SALT Republicans nor the Freedom Caucus members indicated that they had been swayed. Rep. Mike Lawler (R., N.Y.), who wants a bigger SALT deduction, told reporters he was "not budging." Freedom Caucus Chairman Andy Harris (R., Md.) also said he wasn't convinced and that a deal was "a long ways away."

The lawmakers have a lot of leverage, but it's unclear how long the lawmakers can withstand pressure from Trump. He has proven effective in getting lawmakers to fall in line during previous disputes.

"Failure to advance the president's agenda and its extension of the Tax Cuts and Jobs Act would be worse politically for House GOP lawmakers than it would be to cave on a one-off policy priority," wrote analysts for Beacon Policy Advisors in a research note on Tuesday.

Write to Joe Light at joe.light@barrons.com

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May 20, 2025 12:11 ET (16:11 GMT)

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