•••••Conservatives block Trump’s big tax breaks bill in stunning setback
Moody’s yesterday, downgraded its credit rating of the United States by a notch to “Aa1” from “Aaa”, citing rising debt and interest, “that are significantly higher than similarly rated sovereigns.”
The downgrade came as in a massive setback, House Republicans yesterday failed to push their big package of tax breaks and spending cuts through the Budget Committee, as a handful of conservatives joined all Democrats in a stunning vote against it.
Moody’s had been the last among major ratings agencies to keep a top, triple-A rating for U.S. sovereign debt, though it had lowered its outlook in late 2023 due to wider fiscal deficit and higher interest payments.
“Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” Moody’s stated, as it changed its outlook on the U.S. to “stable” from “negative.”
Since his return to the White House on January 20, President Donald Trump has pledged to balance the U.S. budget while his Treasury Secretary, Scott Bessent, has repeatedly said the current administration aims to lower U.S. government funding costs.
The administration’s mix of revenue-generating tariffs and spending cuts through Elon Musk’s Department of Government Efficiency, according to Reuters, has highlighted a keen awareness of the risks posed by mounting government debt, which, if unchecked, could trigger a bond market rout and hinder the administration’s ability to pursue its agenda.
“We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration,” Moody’s said, while forecasting federal debt burden to rise to about 134 percent of GDP by 2035, compared with 98 percent in 2024.
Meanwhile, House Republicans yesterday failed to push their big package of tax breaks and spending cuts through the Budget Committee, as a handful of conservatives joined all Democrats in a stunning vote against it.
The hard-right lawmakers insisted on steeper spending cuts to Medicaid and the Biden-era green energy tax breaks, among other changes, before they would give their support to President Donald Trump’s “beautiful” bill. They warn that the tax cuts alone would pile onto the nation’s $36 trillion debt.
According to the Associated Press, the failed vote, 16-21, stalls, for now, House Speaker Mike Johnson’s push to have the package approved next week. But the holdout lawmakers vowed to stay all weekend to negotiate changes as the Republican president is returning to Washington from the Middle East.
“Something needs to change or you’re not going to get my support,” said Rep. Chip Roy, R-Texas.
Tallying a whopping 1,116 pages, the One Big Beautiful Bill Act, named with a nod to Trump, is teetering at a critical moment.
The conservatives are holding out for steeper cuts while GOP lawmakers from high-tax states including New York are demanding a deeper tax deduction, known as SALT, for their constituents. Johnson, with few votes to spare from his slim majority, has insisted Republicans will are on track with the sprawling package that he believes will inject a dose of stability into a wavering economy.
“Republicans MUST UNITE behind, ‘THE ONE, BIG BEAUTIFUL BILL!’” the president posted on social media. “We don’t need ‘GRANDSTANDERS’ in the Republican Party. STOP TALKING, AND GET IT DONE!”
Democrats slammed the package as a “big, bad bill,” or as Rep. Pramila Jayapal, D-Wash., called it, “one big, beautiful betrayal.”
They emphasised that millions of people would lose their health coverage and food stamps assistance if the bill passes while the wealthiest Americans would reap enormous tax cuts. They also said it would increase future deficits.
“That is bad economics. It is unconscionable,” said Rep. Brendan Boyle, the top Democratic lawmaker on the panel.
The Budget panel is one of the final stops before the package is sent to the full House floor for a vote, which is expected as soon as next week. Typically, the job of the Budget Committee is more administrative as it compiles the work of 11 committees that drew up various parts of the big bill.
But yesterday’s meeting proved momentous even before the votes were tallied. The conservatives, many from the Freedom Caucus, had been warning they would block the bill, using their leverage to demand further changes. Republicans hold a slim majority in the House and have just a few votes to spare to advance the measure.
Four Republican conservatives initially voted against the package — Roy and Reps. Ralph Norman of South Carolina, Josh Brecheen of Oklahoma, Rep. Andrew Clyde of Georgia. Then one, Rep. Lloyd Smucker of Pennsylvania, switched his vote to no.
In their push for deeper spending reductions, the conservatives are particularly eyeing Medicaid, the health care program for some 70 million Americans. They want new work requirements for aid recipients to start immediately, rather than on Jan. 1, 2029, as the package proposes.
Smucker said afterward he was confident “we’re going to get this done.”
At the same time, the New Yorkers have been unrelenting in their demand for a much larger SALT deduction than what is proposed in the bill, which could send the overall cost of the package skyrocketing. Those talks are also underway.
As it stands, the bill proposes tripling what’s currently a $10,000 cap on the state and local tax deduction, increasing it to $30,000 for joint filers with incomes up to $400,000 a year.
Rep. Nick LaLota, one of the New York lawmakers leading the SALT effort, said they have proposed a deduction of $62,000 for single filers and $124,000 for joint filers. The conservatives and the New Yorkers are at odds, each jockeying for their priorities as Johnson labors to keep the package on track to pass the House by Memorial Day and then onto the Senate.
At its core, the sprawling package extends the existing income tax cuts that were approved during Trump’s first term, in 2017, and adds new ones that the president campaigned on in 2024, including no taxes on tips, overtime pay and some auto loans.
It increases some tax breaks for middle-income earners, including a bolstered standard deduction of $32,000 for joint filers and a temporary $500 boost to the child tax credit, bringing it to $2,500.
It also provides an infusion of $350 billion for Trump’s deportation agenda and to bolster the Pentagon.
To offset more than $5 million in lost revenue, the package proposes rolling back other tax breaks, namely the green energy tax credits approved as part of President Joe Biden’s Inflation Reduction Act. Some conservatives want those to end immediately.
The package also seeks to cover the costs by slashing more than $1 trillion from health care and food assistance programs over the course of a decade, in part by imposing work requirements on able-bodied adults.
Speaker of the House Mike Johnson, R-La., left, House Small Business Committee Chairman Roger Williams, R-Texas, center, and House Majority Whip Tom Emmer, R-Minn., right, depart a news conference at the Capitol, Tuesday, May 6, 2025, in Washington. (AP Photo/Rod Lamkey, Jr.)
Speaker of the House Mike Johnson, R-La., left, House Small Business Committee Chairman Roger Williams, R-Texas, center, and House Majority Whip Tom Emmer, R-Minn., right, depart a news conference at the Capitol, Tuesday, May 6, 2025, in Washington. (AP Photo/Rod Lamkey, Jr.)
Certain Medicaid recipients would need to engage in 80 hours a month of work or other community options to receive health care. Older Americans receiving food aid through the Supplemental Nutrition Assistance Program, known as SNAP, would also see the program’s current work requirement for able-bodied participants without dependents extended to include those ages 55-64. States would also be required to shoulder a greater share of the program’s cost.
2027: Political Parties in Akwa Ibom United Ahead of Elections, Akpabio Declares
The Senate President, Godwill Akpabio, yesterday, declared in Akwa Ibom State that political parties in the State have united ahead of the 2027 general elections.
He also taunted the Peoples Democratic Party (PDP), saying the party’s umbrella had been torn into shreds and could no longer protect the people.
Akpabio, said during his midterm empowerment briefing held at Ikot Ekpene township stadium.
Akpabio said, “As I speak with you, there is nothing like a political party in 2027 in Akwa Ibom State again. For the Senate of Ikot-Ekpene Senatorial District, all political parties have collapsed to vote for Senator Godswill Akpabio. For the office of the Governor in 2027, all political parties have agreed to vote for Governor Umo Eno. Akwa Ibom has moved to vote for President Bola Tinubu, The Peoples Democratic Party is in shreds and the umbrella can no longer protect.”
The Senate President described Eno as a man of peace and one who professes God in his heart.
He said: “Umo Eno is a man of peace. Umo Eno is a man of God. I’m not talking about those who professed God with their lips. I’m talking of those who practice God in their heart. Umo Eno has brought all of us together.”
The senate president appreciated his wife, Unoma Akpabio for empowering the people of the State.
He said: “She does it because she knows hunger has no political party. My wife, please feed my people whether I am around or not. Keep on sharing. Akwa Ibom people will show you love soon.”
Items distributed during the empowerment included 30 minibuses,67 passenger tricycles, cassava processing machines 50, 347 Deep Freezers, 247 generating sets, truckloads of 50 kg bags of rice, cash grants, and others.
(Thisday)
