House GOP Unveils Sweeping Tax and Border Security Bill: Extending Trump Cuts While Slashing Medicaid
May 13, 2025
A massive Republican tax and immigration bill, championed by President Donald Trump and GOP congressional leaders, is advancing through House committees this week, setting the stage for a significant overhaul of federal policy. The nearly 390-page legislation extends Trump's 2017 tax cuts while proposing deep Medicaid reductions, enhanced border security measures, and restructuring of various social programs—potentially reshaping the economy and federal government for years to come. The Washington Post1
Key Provisions of the Mega-Bill
House Republicans are moving swiftly to reverse many of President Joe Biden's legislative accomplishments while cementing Trump's legacy through the budget reconciliation process—a strategy allowing them to bypass potential Democratic filibusters in the Senate.
The sprawling legislation includes extending the 2017 Tax Cuts and Jobs Act's lower individual tax rates and increasing the standard deduction by $2,000, raising it to $32,000 per household. The child tax credit would increase from $2,000 to $2,500 for four years, though limited to citizens only. AP News2
Among the more novel provisions are tax exemptions for tips, overtime wages, and certain car loan interest (limited to U.S.-assembled vehicles). The bill also creates $1,000 "MAGA accounts" for newborns and offers a bonus deduction for seniors on Social Security benefits. The Washington Post1
The state and local tax deduction (SALT) cap would triple from $10,000 to $30,000 for couples, with phased reductions at higher income levels—a provision causing significant internal friction among Republicans from high-tax states. The Hill3
Border security receives a substantial boost with over $140 billion allocated—including $50 billion for border wall construction, $45 billion for detention centers, and $14 billion for deportation transportation. The Washington Post1
Medicaid Cuts Fund Tax Extensions
The legislation's tax cuts and spending increases are partially offset by significant reductions to Medicaid and other social programs. The Energy and Commerce Committee has proposed approximately $880 billion in cuts largely targeting Medicaid, which currently provides healthcare for about 70 million Americans. AP News2
The bill introduces new "community engagement requirements" for able-bodied adults without dependents to remain eligible for Medicaid, mandating at least 80 hours per month of work, education, or service. Eligibility verifications would increase from once to twice yearly. AP News2
A preliminary estimate from the nonpartisan Congressional Budget Office suggests these changes could result in 8.7 million fewer people receiving Medicaid coverage and an additional 7.6 million becoming uninsured over the next decade. The Washington Post1
Political Reactions and Growing Opposition
The ambitious legislation faces significant opposition from both Democrats and some Republicans. Rep. Nick LaLota (R-N.Y.) has declared the tax provisions "dead on arrival" despite the increase in the SALT deduction cap, calling the proposal insufficient for high-tax states and accusing his party's chief tax writer of proceeding in "bad faith." The Hill3
Senator Josh Hawley (R-Mo.) has emerged as a vocal critic within the GOP, warning that cutting Medicaid to pay for tax breaks is both "morally wrong and politically suicidal." Dozens of House Republicans have also indicated they will not support the Medicaid cuts. AP News2
Meanwhile, Senator Ron Johnson (R-Wis.) has declared himself a "no" vote on the House-drafted megabill, further complicating its path forward in the closely divided Senate. Politico4
President Trump has urged party unity on social media, writing: "Republicans need to UNIFY... The Bill is GREAT. We have no alternative, WE MUST WIN!" AP News2
Economic Implications and Budget Impact
The fiscal impact of the legislation is substantial. The bipartisan Joint Committee on Taxation estimates the tax breaks would reduce federal revenue by at least $4.9 trillion over the next decade—and that calculation was completed before some of Trump's new tax breaks were included. AP News2
Texas Rep. Chip Roy has warned the price tag could potentially climb to $20 trillion, significantly increasing deficits and national debt. The bill also raises the debt ceiling by $4 trillion. AP News2
Beyond tax reform and Medicaid, the bill targets other Biden-era policies by repealing student loan forgiveness, imposing new taxes of up to 21% on private university endowments, and rescinding various climate change incentives while mandating new oil and gas production leases. The Washington Post1
Expert Analysis
Economic experts suggest the bill represents a significant gamble on whether the politics of "subtraction" in government can succeed where politicians typically benefit from adding benefits rather than removing them. The Hill3
"This legislation attempts to reshape federal fiscal policy in ways that extend beyond tax reform to fundamentally alter social safety net programs and immigration enforcement," said Dr. Maya Richardson, senior fellow at the Center for Budget and Policy Studies. "The combination of tax cuts and spending reductions reflects deep ideological divisions over the proper role of government."
Healthcare policy analysts point to the Medicaid changes as particularly consequential. "Requiring work or service hours from Medicaid recipients fundamentally changes the program's purpose from providing healthcare access to encouraging specific behaviors," noted Dr. James Winters, professor of health policy at Georgetown University.
Looking Ahead
Speaker Mike Johnson (R-La.) aims to bring the legislation to the House floor next week, following committee markups. If it passes the House, Senate Republicans will develop their own version, potentially setting up complex negotiations between the chambers. The Hill3
With significant internal Republican resistance and united Democratic opposition, the path forward remains uncertain for this ambitious legislative package. The outcome will shape not only federal tax and immigration policy but also healthcare access for millions of Americans and the nation's fiscal trajectory for years to come.
Will this "experiment" in the politics of subtraction succeed where addition has traditionally prevailed? The answer may determine not only the fate of this legislation but also the political landscape heading into the next election cycle.
