Trump’s Tax Bill Advances Amid GOP Division and Moody’s Downgrade

A key U.S. House committee has approved President Donald Trump’s sweeping tax reform bill, paving the way for a full House vote this week. The bill, endorsed during a rare Sunday session, seeks to deliver major tax cuts and increase defense and immigration spending. It includes eliminating taxes on tips and overtime pay—core promises from Trump’s campaign.

Despite the approval, internal divisions among Republicans threaten the bill’s future. The main point of contention lies in how to offset the cost of the proposed tax cuts and increased federal spending. Conservative lawmakers are pushing for reductions in Medicaid, a move that moderates and centrist senators strongly oppose due to the potential loss of healthcare for nearly 10 million Americans.

This legislative push comes just days after Moody’s downgraded the U.S. sovereign credit rating, citing high government debt and unsustainable fiscal policies. The timing has amplified scrutiny on Trump’s economic agenda, especially his claims that trade tariffs would bolster federal revenue. However, revenue from tariffs has fallen short of expectations, and recent policy reversals, particularly a de-escalation in the U.S.-China trade standoff, add further uncertainty.

Passage of the bill would mark a rare legislative win for Trump, whose earlier attempts to trim government costs through the Department of Government Efficiency failed to gain traction. While the House prepares to vote, the bill’s fate remains uncertain amid growing GOP infighting and fiscal skepticism.

The bill's approval highlights the ongoing tension between tax reform, spending priorities, and fiscal responsibility—a balancing act made more complex by political divides and global economic pressures. As the House moves toward a vote, all eyes are on whether Trump can convert this legislative effort into a policy victory.