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House GOP continues to squabble over tax cuts as lawmakers enter a critical week

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Prominent House Republicans are privately warring over how to advance tax cuts that are expiring and President Donald Trump’s long list of other tax demands — with Budget Chair Jodey Arrington and deficit hard-liner Rep. Chip Roy locked in a struggle against Ways and Means Chair Jason Smith and other senior Republicans.

The dispute is hindering Speaker Mike Johnson’s plan to advance a budget blueprint this week, as different GOP factions continue to squabble over the costs of the tax plan, how to offset them to reduce their deficit impact and possible cost-saving changes to programs including Medicare and assistance for low-income Americans.

Johnson confirmed Sunday that Republicans were continuing to work through several issues, again delaying his ambitious timeline.

Despite progress last week, one of the major hang-ups in negotiations over the GOP’s sweeping policy bill is that Arrington, fellow Texan Roy and other budget hawks are still scouring for additional and highly controversial spending cuts.

They are also pushing for changes to a critical piece of the complex process: the so-called “budget reconciliation instruction” for the tax writing Ways and Means Committee, according to two Republicans and another person familiar with the discussions who were granted anonymity to discuss the ongoing talks.

That instruction dictates the maximum amount by which the committee can increase the deficit, as lawmakers take into account a full extension of Trump’s 2017 tax cuts and the implementation of his other priorities, like exempting tips and overtime pay from federal income tax.

Smith (R-Mo.) presented a number at the GOP’s retreat in Doral, Florida last month — around $5.5 trillion — that reflected his committee’s understanding of how much it would cost to implement Trump’s priorities, after spending reductions and other revenue raisers Ways and Means can pull together.

Arrington, Roy and other fiscal hawks are trying to further constrain that committee’s deficit spending but are not on the same page as Smith on the reconciliation instruction. Other senior Republicans are worried they won’t be able to cram all of Trump’s tax demands into the package.

The number that lawmakers had tentatively settled on last Thursday — around $4.7 trillion — would make it virtually impossible to implement anything above an extension of the expiring tax cuts. House Republicans agreed during their White House meeting last week that they would permanently extend the 2017 tax cuts, which are estimated by Congress’ official accountants as costing $4.6 trillion.

The $4.7 trillion figure “is an implicit acknowledgement that something will have to give,” said Liam Donovan, a Republican strategist, in an interview.

“[T]here will absolutely have to be trade-offs. You simply can’t fit it all into that,” Donovan said.

Republicans have been discussing shorter timelines for some of Trump’s other tax priorities.

Arrington outlined to reporters last week that there were essentially two ways to adjust the cost of the GOP’s policy package.

“You got the tax dial and you got the spending reduction dials,” Arrington said.

But a senior GOP aide familiar with the discussions, granted anonymity to discuss the private deliberations, pointed out that “dials can only do so much.” Johnson, Smith and other GOP leaders are generally pushing to achieve all of Trump’s broad tax goals.

Roy also recently told reporters that if Republicans didn’t achieve deep enough spending cuts, then “we’re gonna have to be thinking about shorter-term tax rates or…which ones we’ll be able to address or not.”

Meanwhile, anger is rising across large pockets of the House GOP, who believe lowering the cost number would make it impossible to advance Trump’s tax priorities, including the extension of the expiring cuts and his add-ons

“Roy and Arrington will make the tax cut portion not passable,” said one GOP lawmaker.

Republicans will then be “facing the largest tax increase in history” or be forced to strike a bipartisan tax deal with Democrats before the current policies expire at the end of the year, the GOP lawmaker added.

The two Texans, the lawmaker said, should “listen to” GOP leaders and Smith.

The unrest is reigniting House GOP leaders’ concerns that Roy and other hard-liners are trying to burn time to undercut the leaders’ preference for a single bill that would include taxes, border policy, energy provisions and national security measures, according to two Republicans familiar with the conversations. The Senate favors a two-track strategy, that would include the border, energy and defense measures in one bill and leave taxes for later, in a separate bill.

Roy, Freedom Caucus Chair Andy Harris (R-Md.) and other hard-liners favor the two-bill approach and have been back-channeling with Senate Budget Chair Lindsey Graham (R-S.C.) as he prepares to mark up his budget plans this week in committee.

Centrists and even some more conservative Republicans are also increasingly alarmed that Arrington keeps raising Medicare reforms as a potential spending offset, according to three Republicans familiar with the ongoing talks. Trump made it clear on the campaign trail that he doesn’t want to touch Medicare, but Arrington has suggested a variety of changes to the program that would lower costs in the Ways and Means’ jurisdiction.

House Republicans from corn-growing states are also infuriated that Arrington has his eye on slashing tax incentives for biofuels, after a similar move almost blew up former Speaker Kevin McCarthy’s 2023 debt ceiling deal. Many agriculture-state Republicans are already irritated at Arrington for declining to help them press the Congressional Budget Office for additional revenue for the farm bill last year, and tempers are flaring again.

GOP leaders are also planning to use tariff revenue to help pay for the massive bill, even though many Republicans are skeptical of such a move. Trump said Sunday he’s planning to announce new levies this week.

Republicans are also planning to include enacting the first-ever work requirements for Medicaid in the package, according to two people familiar with the ongoing talks. They’re also planning to expand work requirements for SNAP food aid benefits that help feed more than 40 million low-income Americans and a smaller cash assistance program known as Temporary Assistance for Needy Families.

The work requirements can be adjusted depending on how big of a funding gap they need to fill, according to Republicans involved in the discussions. For example, they can increase the age range of the additional work requirements if needed, along with plans to rescind the ability of states to request federal waivers for SNAP work requirements for certain individuals and other flexibilities in the program.

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Congress

Jack Smith invited to testify before Senate next month

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Jack Smith, the former special counsel who brought criminal charges against President Donald Trump, has been invited to testify Sept. 22 before the Senate Judiciary Committee, according to an invitation from Chair Chuck Grassley reviewed by Blue Light News.

Smith previously testified before the House Judiciary Committee in January, but Grassley (R-Iowa) and his team have been probing Smith and his investigations for months.

Grassley recently revealed that Smith obtained text messages that 44 members of Congress sent to White House officials during the waning months of Trump’s first term leading up to and around the Jan. 6, 2021, Capitol attack.

Grassley’s texts were among those accessed by Smith’s team, along with Sens. Mike Lee (R-Utah), Cory Booker (D-N.J.) and Tom Cotton (R-Ark.).

“In the process of a deeply flawed, weaponized investigation, Jack Smith subpoenaed phone toll records from a dozen senators, scooped up text messages from over 40 members of Congress, and subpoenaed the private communications and financial records of hundreds of other Republican entities and individuals,” Grassley said in a statement.

“He needs to answer directly to Congress for his actions,” Grassley added. “Smith has requested to testify before the Senate Judiciary Committee, and our committee looks forward to hearing from him as part of Congress’ investigation into Arctic Frost and his time as Special Counsel. Smith must be honest and forthcoming in his answers, because the American people deserve nothing less than full transparency and accountability.”

Lawyers for Smith did not immediately respond to a request for comment.

During the January hearing, Republicans focused on technicalities of how Smith investigated the probe into Trump’s election interference, such as whether he properly signed his oath of office and whether he was sufficiently versed on the Constitution’s “speech or debate” clause that protects members of Congress from criminal investigation for their lawmaking actions.

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Chuck Edwards recommended for censure by House Ethics Committee

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The House Ethics Committee recommended Monday that lawmakers censure Rep. Chuck Edwards for engaging in “persistent unprofessional and inappropriate conduct towards two young female staffers” — cataloguing multiple episodes of sexual harassment by the married lawmaker.

Censure is the most severe punishment the panel can recommend short of expulsion, requiring targeted members to submit to a public shaming on the floor. The bipartisan panel said it plans to bring a privileged resolution to a vote once the House returns to session later this month.

A spokesperson for Edwards, 65, did not immediately respond to a request for comment.

In a 15-page rebuttal, lawyers for Edwards said that the Ethics Committee “failed to demonstrate that either of the two staffers expressed discomfort to Representative Edwards regarding his conduct with them.” They also rejected the need for censure, noting that it has been used “sparingly in this context and directed only at matters of severe sexual misconduct.”

The panel itself released a trove of evidence including emails, text messages and photographs showing how Edwards had insinuated himself into intimate aspects of their lives.

Edwards, the committee found, made comments on the appearance of two young female staffers in his congressional office, telling them they looked “pretty” or “breathtaking” and made a comment on one staffer’s weight. He also lavished the young women with gifts, including purses valued at more than $1,000, as well as guns, shoes, flowers and one-on-one dinners.

Text messages from one of the women showed Edwards at one point sent her more than 20 containers of ice cream because, he said, she needed “a lot of cheering up!”

Sexual harassment is prohibited by House rules and federal law, and the committee found that Edwards violated “the spirit of the House’s prohibitions on sexual harassment and unwanted advances, as well as the requirement to act in a manner that reflects credibly upon the House.”

The report found Edwards brought one of the staffers to a holiday event at the White House, gave her flowers and texted her how he was “so excited about tonight” and that he pressured her to continue the night with him after the event. Edwards told the committee he accompanied that staffer to her home in Virginia because he “felt uncomfortable dumping a young lady on the street.”

Edwards also talked to that staffer and others about going to strip clubs in Washington, the report says.

The panel concluded that Edwards did not engage in sexual activity with either of the women, nor did he explicitly proposition them or other staff members for sex. Edwards, who is facing a competitive race for reelection in his western North Carolina district, cooperated with the probe, the committee said.

In one instance, the panel found, Edwards skipped House votes one night to decorate the second staffer’s Christmas tree. He also went out drinking and gambling with her. On another occasion, he recited a poem at her going-away party in his office and cried during that incident, making his staff noticeably uncomfortable.

When the second staffer left his office, Edwards helped her move back to North Carolina and sent her a handwritten letter in which he described her as “the most amazing woman” and that she had “written a complex chapter in my heart that I will never stop reading.”

Edwards told the committee that letter was not romantic.

“It was only to imply that we had a relationship on so many different levels — on a congressional level, on a professional level, on a friendship level, on a helping-one-another-out-with-our-chores-and-responsibility level,” he said.

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Cornyn, Tillis confirm they will vote for Blanche

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Acting Attorney General Todd Blanche has a clear path to the Senate Judiciary Committee advancing his nomination to the permanent job after two GOP holdouts confirmed Monday they would vote for him.

The statement from Sens. John Cornyn (R-Texas) and Thom Tillis (R-N.C.) comes after the late-night announcement Sunday of a Justice Department agreement to clarify a controversial May settlement agreement between President Donald Trump and the IRS.

A successful Judiciary vote Tuesday would set Blanche up for confirmation on the Senate floor later this week, before the chamber breaks for August recess.

“We want to express our gratitude to Mr. Blanche and his staff for working with us on this, and we look forward to voting to advance his nomination out of the Senate Judiciary Committee soon,” Cornyn and Tillis said in a joint statement.

The senators suggested their agreement with Blanche also satisfies the concerns of several other Republican senators off the Judiciary Committee who have raised concerns about the “Anti-Weaponization Fund” created in the original settlement, as well as provisions immunizing Trump and his family from some tax audits.

“We are pleased that the Department of Justice has issued a formal order terminating the anti-weaponization fund. Additionally, the Department has acknowledged in a binding written order that the audit settlement is limited to the plaintiffs and the scope does not extend beyond the defendants in the lawsuit, the IRS and the Treasury, addressing concerns that multiple of our Republican colleagues share,” Cornyn and Tillis said.

Sens. Bill Cassidy of Louisiana, Susan Collins of Maine, John Curtis of Utah and Lisa Murkowski of Alaska are among the other Republicans who have expressed concerns about the payout fund. Blanche recently visited Alaska and announced a flurry of settlements benefiting Alaska as he courts Murkowski’s vote.

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