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Four sticking points in Trump's 'big, beautiful' tax bill

Bernd Debusmann Jr & Mike Wendling
BBC News
Getty Images Exterior of the US Capitol building Getty Images
Donald Trump's "big, beautiful bill" has so-far stalled on Capitol Hill.

US President Donald Trump's sweeping tax and spending bill is a key part of his legislative agenda - but for the moment it has stalled in Congress.

Republicans narrowly control both the House of Representatives and Senate, and it is discord among of Trump's own party that has put his "big beautiful bill" in limbo.

Trump met with dissenting Republicans on Capitol Hill on Tuesday, and of the hard-line House Freedom Caucus were reportedly set to visit the White House on Wednesday.

Reports suggest, though, Trump has been unable to convince all the holdouts.

He has said that if a Republican lawmaker opposed the bill, they "wouldn't be a Republican much longer".

The bill was narrowly approved by the House budget committee on Sunday night, giving House Speaker Mike Johnson a rare win. But it had failed on the committee's first vote, with Republican hold-outs concerned about spending and national debt.

The Senate must also the legislation and Republicans there are working on their own tweaks.

Let's take a look at where disagreements lie.

How much to cut?

The bill combines an extension of tax cuts ed in 2017 with other tax measures and spending cuts.

Trump and his congressional allies are trying to satisfy both budget hawks who want deeper spending cuts and Republicans who want tax reductions but worry about the effects of cutting some programmes.

That has led to one of the biggest questions: How much spending to slash?

The numbers can be daunting, especially for a party that has traditionally pushed to reduce the country's debt.

The nonpartisan Congressional Budget Office estimates that the bill would, over the next decade, add about $2.3 trillion (£1.7tn) to the national debt, which is currently around $36.2tn (£27tn).

Cutting government health care programmes and tax incentives for green energy would save money, but the CBO and most economists believe that still wouldn't be enough to make up for revenue lost by the bill's tax cuts.

The prospect of swelling national debt - which Trump promised to tackle during his election campaign - has prompted opposition from the House Freedom Caucus.

Medicaid

Perhaps the most contentious item in the bill are cuts - partly through work requirements - to Medicaid, a healthcare programme aimed at lower-income Americans.

Chip Roy of Texas and other Republicans in the House - including South Carolina's Ralph Norman, Oklahoma's Josh Brecheen and Georgia's Andrew Clyde - are pressing for the bill to go further.

On Sunday night, Speaker Johnson said "minor modifications" had been promised to the four rebels, including preventing undocumented immigrants from accessing Medicaid.

The concessions also involved Medicaid work requirements.

Under the original House bill, states would have to deny Medicaid coverage to able-bodied Americans who were not working at least 80 hours a month or undertaking other community options, starting in 2029, after Trump left office. Coverage would also be ended for those not meeting work requirements.

In the current version, the requirements would start next year.

But other Republicans, such as Missouri Senator Josh Hawley, have argued against any cuts to Medicaid, warning they would hurt millions of lower-income constituents.

Hawley wrote in the New York Times the cuts would be "both morally wrong and politically suicidal".

Dozens of other Republicans are also concerned.

State and local tax deductions

Then, there are Republicans seeking larger tax cuts. They generally represent relatively wealthy areas in higher-tax, Democratic-dominated states such as New York.

They want the bill to provide bigger tax credits for what people pay in state and local taxes - known as Salt.

The bipartisan "Salt Caucus" has been pushing raise the current $10,000 cap on such credits since it was formed in 2021. Some Republican want it raised to $62,000 for individuals.

House Speaker Mike Johnson and the so-called Salt Republicans reached a tentative compromise late Tuesday to raise it to $40,000, according to reports.

But in a sign of how tricky negotiations have become, that news prompted dismay from budget hawks who insist that any such tax cut be balanced with correspondent spending cuts.

Food assistance

Every year more than 42 million Americans use federal food aid called Snap , which stands for Supplemental Nutrition Assistance Program, to buy groceries.

Many House Republicans want to shrink the amount the government pays for "food stamps". The legislation would require individual states to shoulder 5% of the benefit's costs each year, as well as 75% of the istrative costs.

At the moment, states are not responsible for any Snap costs and pay 50% of istrative costs.

Republicans also hope to expand existing work requirements, which currently apply to people without dependants between the ages of 18 and 54, by raising the upper age limit to 64.

The House Agriculture Committee has already approved $300m (£223m) in reductions to Snap to balance out tax cuts.

Democratic National Committee chair Ken Martin called the proposed changes "a slap in the face" of millions of people who rely on Snap "to put food on the table and make sure their kids don't go hungry".

Republicans say they would reduce government waste, promote work, and restore "common sense" to the programme.

Government data shows about 12% of Americans received Snap benefits last year.

That figure is greater in numerous Republican-leaning states with relatively high poverty rates, including Alabama and Oklahoma.