House Republicans Propel Trump's Tax Bill Amid Debt Downgrade Concerns

The Republican-led House is working urgently to pass a major tax bill backed by former President Donald Trump. However, debates on spending cuts and tax breaks are exposing divisions within the party that threaten its narrow majority. This push comes as Moody's has downgraded the U.S. credit rating, citing a lack of political resolve from both Congress and the administration to tackle a massive $36.2 trillion national debt.

The financial markets reacted quickly to the credit downgrade, manifesting in a drop in U.S. stocks and a spike in Treasury yields amid growing concerns over America's fiscal stability. Trump's proposal is expected to add between $3 trillion to $5 trillion to the federal debt. House Speaker Mike Johnson stressed the urgency of moving the proposal, aiming for a vote before the upcoming Memorial Day.

The tax legislation seeks to extend 2017's tax cuts, boost defense spending, and cut Medicaid expenses, along with imposing work requirements. Yet, Republican lawmakers remain divided, particularly over Medicaid cuts and the repeal of green energy tax credits. As the House prepares for a key Rules Committee decision, Speaker Johnson remains optimistic about reconciling diverse party opinions to advance the bill.

(With inputs from agencies.)