U.S. President Donald Trump's sweeping tax-cut bill, which had been stalled for days by Republican infighting over spending cuts, won approval from a key congressional committee on Sunday in a rare victory for Trump and House Speaker Mike Johnson.
At an unusual Sunday night session, four hardline Republican conservatives on the House Budget Committee, who had blocked the legislation on Friday, allowed the bill to move forward as they pressed for deeper spending cuts in closed-door talks with Republican leaders and White House officials.
"We've made progress this weekend ... but we didn't get nearly far enough," Representative Chip Roy, one of the four hardliners, told reporters after the panel approved the bill.
A possible vote on passage in the House of Representatives could take place later this week.
Nonpartisan analysts say the bill would add $3 trillion to $5 trillion to the nation's $36.2 trillion in debt over the next decade. Moody's cited the rising debt, which it said was on track to reach 134% of GDP by 2035, for its decision on Friday to downgrade its U.S. credit rating.
The measure would extend Trump's 2017 tax cuts, his signature first-term legislative achievement, reduce taxes on some tips and overtime income - both campaign promises - boost defense spending and provide more funds for his border and immigration crackdown.
The hardliners want bigger cuts to the Medicaid healthcare program for lower-income Americans and the complete repeal of green tax credits implemented by Democrats.
The budget panel's approval sends the legislation onto the House Rules Committee, which will consider amendments to change the legislation as it prepares for a floor vote on passage. Johnson is pushing to get full House approval before the U.S. Memorial Day holiday on May 26.
Another hardliner, Representative Ralph Norman, said Republican leaders were negotiating changes to proposed Medicaid work requirements. But he also wanted a larger reduction in federal medical support for able-bodied beneficiaries.
Trump's Republicans hold a 220-213 majority in the House and are divided over how deeply to slash spending to offset the cost of the tax cuts.
Large-scale changes to Medicaid and nutritional support for the poor have been opposed by moderate House Republicans and some Republican senators who say it would hurt the very voters who elected Trump in November, and whose support they will need in 2026, when control of Congress is again up for grabs.
The bill's cuts would kick 8.6 million people off Medicaid, the joint federal-state program for low-income Americans.
But hardliners insist that the danger to the U.S. fiscal position is a worse danger.
"We've been downgrade three times. We have problems with money in this country - the debt," Norman said.
Earlier on Sunday, Treasury Secretary Scott Bessent dismissed Moody's action in a pair of television interviews, saying the bill would spur economic growth that would outpace what the nation owed.
Economic experts, meanwhile, warn the downgrade from the last of the three major credit agencies was a clear sign that the U.S. has too much debt and should prompt lawmakers to either increase revenue or spend less.
Congressional Republicans in 2017 also argued that the tax cuts would pay for themselves by stimulating economic growth. But the nonpartisan Congressional Budget Office estimates the changes increased the federal deficit by just under $1.9 trillion over a decade, even when including positive economic effects.
Moody's downgrade, coming amid ongoing economic uncertainty over Trump's tariffs that have already roiled global markets, could further rattle investors when Wall Street re-opens on Monday.
Trump and his administration have pledged to balance the budget since the Republican president took office again in January.
But his attempts to cut government spending through Elon Musk's Department of Government Efficiency have fallen far short of his goals. It also remains unclear what revenue would be raised through tariffs as Trump swings between imposing higher rates and cutting deals.
Johnson said the downgrade showed the need for the tax bill.
"Moody's is not incorrect," Johnson said. "We're talking about historic spending cuts. I mean, this will help to change the trajectory for the U.S. economy."
Lawmakers face a far harder deadline later this summer, when they will need to address the U.S. debt ceiling or trigger a potentially catastrophic default.
Democratic U.S. Senator Chris Murphy of Connecticut said the credit rating cut spelled trouble for Americans.
"That is a big deal. That means that we are likely headed for a recession," Murphy told NBC's "Meet the Press."
"That probably means higher interest rates for anybody out there who is trying to start a business or to buy a home. These guys are running the economy recklessly."
At an unusual Sunday night session, four hardline Republican conservatives on the House Budget Committee, who had blocked the legislation on Friday, allowed the bill to move forward as they pressed for deeper spending cuts in closed-door talks with Republican leaders and White House officials.
"We've made progress this weekend ... but we didn't get nearly far enough," Representative Chip Roy, one of the four hardliners, told reporters after the panel approved the bill.
A possible vote on passage in the House of Representatives could take place later this week.
Nonpartisan analysts say the bill would add $3 trillion to $5 trillion to the nation's $36.2 trillion in debt over the next decade. Moody's cited the rising debt, which it said was on track to reach 134% of GDP by 2035, for its decision on Friday to downgrade its U.S. credit rating.
The measure would extend Trump's 2017 tax cuts, his signature first-term legislative achievement, reduce taxes on some tips and overtime income - both campaign promises - boost defense spending and provide more funds for his border and immigration crackdown.
The hardliners want bigger cuts to the Medicaid healthcare program for lower-income Americans and the complete repeal of green tax credits implemented by Democrats.
The budget panel's approval sends the legislation onto the House Rules Committee, which will consider amendments to change the legislation as it prepares for a floor vote on passage. Johnson is pushing to get full House approval before the U.S. Memorial Day holiday on May 26.
Another hardliner, Representative Ralph Norman, said Republican leaders were negotiating changes to proposed Medicaid work requirements. But he also wanted a larger reduction in federal medical support for able-bodied beneficiaries.
Trump's Republicans hold a 220-213 majority in the House and are divided over how deeply to slash spending to offset the cost of the tax cuts.
Large-scale changes to Medicaid and nutritional support for the poor have been opposed by moderate House Republicans and some Republican senators who say it would hurt the very voters who elected Trump in November, and whose support they will need in 2026, when control of Congress is again up for grabs.
The bill's cuts would kick 8.6 million people off Medicaid, the joint federal-state program for low-income Americans.
But hardliners insist that the danger to the U.S. fiscal position is a worse danger.
"We've been downgrade three times. We have problems with money in this country - the debt," Norman said.
Earlier on Sunday, Treasury Secretary Scott Bessent dismissed Moody's action in a pair of television interviews, saying the bill would spur economic growth that would outpace what the nation owed.
Economic experts, meanwhile, warn the downgrade from the last of the three major credit agencies was a clear sign that the U.S. has too much debt and should prompt lawmakers to either increase revenue or spend less.
Congressional Republicans in 2017 also argued that the tax cuts would pay for themselves by stimulating economic growth. But the nonpartisan Congressional Budget Office estimates the changes increased the federal deficit by just under $1.9 trillion over a decade, even when including positive economic effects.
Moody's downgrade, coming amid ongoing economic uncertainty over Trump's tariffs that have already roiled global markets, could further rattle investors when Wall Street re-opens on Monday.
Trump and his administration have pledged to balance the budget since the Republican president took office again in January.
But his attempts to cut government spending through Elon Musk's Department of Government Efficiency have fallen far short of his goals. It also remains unclear what revenue would be raised through tariffs as Trump swings between imposing higher rates and cutting deals.
Johnson said the downgrade showed the need for the tax bill.
"Moody's is not incorrect," Johnson said. "We're talking about historic spending cuts. I mean, this will help to change the trajectory for the U.S. economy."
Lawmakers face a far harder deadline later this summer, when they will need to address the U.S. debt ceiling or trigger a potentially catastrophic default.
Democratic U.S. Senator Chris Murphy of Connecticut said the credit rating cut spelled trouble for Americans.
"That is a big deal. That means that we are likely headed for a recession," Murphy told NBC's "Meet the Press."
"That probably means higher interest rates for anybody out there who is trying to start a business or to buy a home. These guys are running the economy recklessly."
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