May 16

Written By DSEANTE PARKS

This week in MORE POWER:

Cuts and Caps

Check Your Coverage

Fields and Funds

Tech and Innovation Policy

Climate and Clean Energy

Buckle up! Congress is racing to pass the massive budget reconciliation bill that could reshape taxes, health care and federal spending for years to come. Speaker Mike Johnson (R-La.) is pushing a $4 trillion debt ceiling increase as part of the package, warning that without action by mid-July, the government could run out of money for Social Security, military pay and other essential programs. The House Budget Committee aims to finalize the bill by May 22, with a floor vote expected next week. The Senate is drafting its own version, setting the stage for major changes. We’ve broken down the key pieces so you can see where your tax dollars are going — and what could change for you. After this issue, we’re taking a two-week break, so consider this your all-in-one briefing.


ICYMI: Read last month’s budget breakdown here.

Cuts and Caps

The state and local taxes (SALT) deduction lets taxpayers subtract what they pay in state and local taxes from their federal taxable income. Congress capped the SALT deduction at $10,000 in 2017, hitting high-tax states like New York, New Jersey and California the hardest. Now, as Republicans aim to extend parts of that tax law, Reps. Mike Lawler (R-N.Y.), Andrew Garbarino (R-N.Y.), Nick LaLota (R-N.Y.) and Young Kim (R-Calif.) want to raise the cap, potentially to $40,000 for individuals and $80,000 for couples. Speaker Mike Johnson (R-La.) is leading negotiations after tensions flared between the SALT Caucus and Republican leadership. One major sticking point is whether any increase to the cap would be permanent or sunset after a few years to limit the bill’s cost.

Meanwhile, the broader tax package includes efforts to permanently extend several business tax breaks, including those for research and development, interest deductions, and equipment purchases. Additionally, some senators, like Sen. Shelley Moore Capito (R-W.Va.), are pushing back on the House plan to repeal more than $500 billion in clean energy tax credits, signaling more changes to come as the bill moves through Congress.

Check your Coverage

Medicaid, the joint federal and state health insurance program for low-income Americans, is facing major proposed changes as part of the ongoing budget negotiations. House Republicans want to cut federal spending by tightening the rules around who qualifies and how much the government pays. Their plan includes requiring recipients to work, verifying eligibility more strictly, and capping federal payments per person. Supporters argue these changes would prevent misuse and help control costs. However, the nonpartisan Congressional Budget Office estimates that 13.7 million people would lose coverage if these changes are enacted. Many senators, including Sen. Jim Justice (R-W.Va.) and Sen. Shelley Moore Capito (R-W.Va.), have expressed concern, given how many of their constituents rely on the program.

The House plan already reflects some concessions. Lawmakers dropped more aggressive cuts to the Federal Medical Assistance Percentage (FMAP), but kept the work and eligibility requirements in place.

Fields and Funds

The farm bill is a comprehensive piece of legislation that governs agriculture, food assistance, and rural development programs. The current farm bill, which was last reauthorized in 2018, is set to expire on September 30, 2025, prompting Congress to work on a new version. House Agriculture Committee Chair G.T. Thompson (R-Pa.) has introduced a $1.5 trillion farm bill proposal that includes significant investments in farm safety net programs, crop insurance, trade promotion, and conservation efforts. The bill also seeks to limit future updates to the Thrifty Food Plan, which serves as the basis for calculating benefits from the Supplemental Nutrition Assistance Program (SNAP), better known as food stamps. This provision has drawn criticism from Democrats, who argue that it could prevent future increases in SNAP benefits. 


Senate Agriculture Committee Chair John Boozman (R-Ark.) said he’s concerned that parts of the House bill, like limits on how the United States Department of Agriculture (USDA) updates the Thrifty Food Plan, may violate the Byrd Rule, which doesn’t allow non-budget items in reconciliation bills. Discussions are ongoing between the House and Senate to reconcile differences and ensure that the final farm bill addresses the needs of farmers, ranchers, and rural communities while adhering to legislative rules and budget constraints.

Tech and Innovation Policy 

The House’s budget reconciliation bill includes new investments and restrictions related to technology and artificial intelligence. One provision would direct $500 million to the Commerce Department to upgrade outdated federal IT systems using AI tools. Tied to that funding is a proposal to block states from passing their own AI laws for the next 10 years. This type of freeze is known as a “moratorium,” meaning a temporary pause or ban. Supporters, including Rep. Jay Obernolte (R-Calif.), say it’s needed to ensure the federal government has space to act without conflicting state rules. 

But the moratorium is already drawing legal and political scrutiny. During a late-night committee meeting this week, House counsel acknowledged it is a “policy change” rather than a purely budget-related item. That could make it vulnerable in the Senate under the Byrd Rule, which blocks provisions that don’t directly affect spending or revenue. Reps. Alexandria Ocasio-Cortez (D-N.Y.) and Lizzie Fletcher (D-Texas), have criticized the measure, warning it could undermine states’ ability to regulate new and fast-moving technologies.

Climate and Clean Energy

House Republicans have proposed a budget bill that would extend parts of President Donald Trump’s 2017 tax law by scaling back clean energy tax credits created under President Joe Biden’s Inflation Reduction Act. The proposal seeks to reduce federal spending by $1.5 trillion over the next decade. The bill would reduce incentives for solar, wind, electric vehicles and energy efficiency, which have supported billions in public and private sector investments since 2022. Supporters say the change would reduce government spending and shift support toward traditional energy sources. Critics say it could slow job growth and affect clean energy development.


The Clean Investment Monitor estimates that the bill could affect more than $800 billion in current and planned clean energy investments. Some Republican lawmakers have raised concerns about the impact on jobs and industries in their districts.

Bills Congress Passed

Nothing. 

What The President Signed Into Law

Nothing.

That’s your budget briefing! See you next month!

DSEANTE PARKS
Next

May 9