Donald Trump's "big, beautiful bill" continues its legislative journey. The US president's tax cut plan, a key campaign promise, is currently being examined by Congress.

It must now be approved by the Rules Committee. Speaker Mike Johnson will then be able to call for a vote in the House. His goal is to have it passed before Memorial Day on Monday, May 26. The Senate will then review the text. Donald Trump wants to be able to sign the bill into law by July 4, Independence Day.

SALT deduction

But for now, Republicans in the House remain divided. Representatives from some high-tax states are arguing for a higher cap on the SALT deduction—the amount of local taxes that can be deducted from federal taxes.

The current cap on this deduction is set at $10,000. The initial bill calls for an increase to $30,000. On Monday, Mike Johnson proposed raising it to $40,000, but only for four years and for people earning less than $751,000 per year. After that, the cap would be lowered to $30,000 and the annual income limit would be $400,000.

This is not enough for Republican lawmakers in New York, New Jersey, and California, who want a permanent measure and a cap of $80,000 for married couples.

During a closed-door meeting on Tuesday, Donald Trump said that he wanted to keep the $30,000 cap. He also tried to postpone the issue by asking to wait until the tax cut plan had been passed before revisiting the SALT deduction. However, the lawmakers concerned believe that the vote on the "big, beautiful bill" will be their only opportunity to raise the SALT cap.

Cuts to Medicaid

At the same time, other Republicans are calling for deeper spending cuts, especially if the SALT deduction cap is raised. Medicaid, the health insurance program for low-income Americans that covers 71 million people, is a particular target.

The proposed bill already includes stricter eligibility requirements for Medicaid, which should eventually reduce the number of enrollees by 7.7 million. This includes a minimum number of hours worked for able-bodied adults. This requirement was not supposed to take effect until 2029, but the most conservative Republicans are pushing for faster implementation.

Unsurprisingly, the cuts to Medicaid are a target for Democrats, who accuse Republicans of financing tax cuts by slashing programs that benefit the poorest Americans.

Donald Trump, who needs to secure the support of his MAGA base, is trying to deflect this criticism by assuring voters that no one will be penalized by the Medicaid cuts. In his statement to Congress yesterday, he said, "The only things we're cutting are waste, fraud, and abuse."