House Reconciliation: House Ag Panel Approves GOP Package

29-25 Ag panel vote follows Ways & Means, Energy & Commerce panel votes 

 

Today the House Ways & Means, Energy and Commerce and Ag panels approved their respective reconciliation measures. The following are details:

 

 

1. House Energy and Commerce Committee passed its portion of the budget reconciliation bill today after a marathon markup session that lasted over 24 hours. The vote was 30 yeas to 24 nays, split along party lines. This section of the bill includes significant changes to Medicaid, such as new work requirements and copays, as well as telecommunications provisions related to spectrum auctions. The telecommunications provisions specifically were advanced by a 29-24 vote within the committee.
2. House Ways and Means Committee also advanced its portion of the fiscal year 2025 reconciliation bill today. The vote was 26-19, again along party lines. This section covers tax legislation, including the extension of expiring provisions from the 2017 Tax Cuts and Jobs Act and changes to energy tax credits.
3. House Ag Committee May 14 approved its reconciliation package in a party-line vote of 29-25.

 

Next Steps

 

The committees’ approved sections will be sent to the House Budget Committee, which is scheduled to assemble the full reconciliation package for a floor vote.

 

 

House Ways & Means Committee 

 

The House Ways and Means Committee approved the Republicans' $3.8 trillion tax package in a party-line 26-19 vote. It was a huge development in the GOP's quest to extend the 2017 tax cuts and enact President Donald Trump's domestic agenda. The vote came after a more than 17-hour markup. Democrats forced votes on dozens of amendments through the night.

 

House Republicans want a floor vote on the full reconciliation bill next week. But first they need to figure out a SALT cap, which remains unresolved after the tax markup (see more below).

 

LINKS   For a section-by-section on the bill, click here. For more information, click here.   FACT SHEET: The One, Big, Beautiful Bill Champions Life and Puts American Families First FACT SHEET: The One, Big, Beautiful Bill Fuels America’s Economic Growth FACT SHEET: The One, Big, Beautiful Bill Makes Rural America Great Again FACT SHEET: The One, Big, Beautiful Bill Makes America Win Again FACT SHEET: The One, Big, Beautiful Bill Puts American Workers First

 

Key Tax Provisions in the House Reconciliation Measure 

 

Individual Tax Provisions

 

• Permanent Extension of 2017 Tax Cuts: The bill makes permanent the individual income tax rate reductions enacted in the 2017 Tax Cuts and Jobs Act (TCJA), including the 10%, 12%, 22%, 24%, 32%, 35%, and 37% brackets, as well as the increased standard deduction.
• Child Tax Credit: Increases the Child Tax Credit to $2,500 through 2028, with the Additional Child Tax Credit of $1,400 (inflation-adjusted) made permanent. After 2028, the Child Tax Credit reverts to $2,000, indexed for inflation.
• Elimination of Taxes on Tips and Overtime: Temporarily eliminates federal income taxes on tips and overtime pay until 2028.
• Home Mortgage Interest Deduction: Makes permanent the $750,000 limitation on home mortgage acquisition indebtedness.
• Double the Standard Senior Deduction for individuals earning under $75,000 or couples under $150,000 — effectively providing relief without eliminating Social Security tax revenue. It would provide an additional $4,000 federal income tax deduction for lower- and middle-income seniors 65 and over, roughly twice as much as the current additional deduction in most cases.
   

Business and Investment Provisions

 

• Qualified Business Income Deduction (Section 199A): Increases the deduction from 20% to 23% and makes it permanent, with expansion to certain qualified business development company interest dividends. 98% of farms in the U.S. are pass-throughs.
• Section 179 would allow businesses to write off up to $2.5 million of the cost of equipment and software. The limit would phase down as spending exceeds $4 million. Agricultural industry utilizes one-fifth of all Small Business Expensing deductions across the American economy.
• Bonus Depreciation: Extends 100% bonus depreciation, particularly for property used in manufacturing, and allows for full expensing of research and development (R&D) costs.
• Global Intangible Low-Taxed Income (GILTI) and Foreign-Derived Intangible Income (FDII): Makes permanent a 50% deduction for GILTI and a 37.5% deduction for FDII, effectively lowering the tax rates on these types of income.
• Estate and Gift Tax: Permanently increases the unified estate and gift tax exemption to $15 million per taxpayer, indexed for inflation.
• Renews Opportunity Zone (OZ) program to better target Rural America. Provides new OZ incentives to drive investments to rural and underserved areas.
• Raises the 1099-MISC threshold from $600 to $2,000: Lowers the administrative burden for small farmers and ranchers employing temporary and seasonal workers. 
  
   

Private Equity

 

• The carried interest tax break benefiting private equity, venture capital and real estate partnerships would survive again, despite the president’s push to eliminate it. 
• Private equity also won an expanded interest expensing tax break.

 

Domestic Car Dealers

 

• Up to $10,000 a year in loan interest for U.S.-made cars would be tax deductible through 2028, a boon to auto dealers looking to close sales. But the break phases out slowly for individuals with more than $100,000 in income and couples with more than $200,000. This new break will cost an estimated $57 billion in lost tax revenue.

 

Parents

 

• The child tax credit would increase from $2,000 to $2,500 though 2028. Newly minted parents could open up new “MAGA” investment accounts for their babies seeded with $1,000 from the government. The average Child Tax Credit (CTC) claimed by farm households is $3,770. If the CTC expansion expires, that average would decrease by 64% to $1,331.

 

Defense Contractors

 

• The package boosts defense spending by $150 billion, with much of the funding going to new weapons systems made by major contractors.

 

Offsets and Revenue Raisers

 

• Sunsetting Energy Credits: Accelerates the expiration of several clean energy tax credits to help offset the cost of the bill.
• Retaliatory Taxes: Imposes retaliatory taxes on taxpayers in jurisdictions that impose discriminatory or extraterritorial taxes, such as digital services taxes and undertaxed profits rules.
• Executive Compensation and Endowments: Limits deductibility of executive compensation and increases taxes on certain large college endowments and private foundations.
• Reforms to Medicaid Health Coverage and Food Stamps. House Republicans are seeking to impose work requirements on able-bodied Medicaid recipients up to 64 years old and beneficiaries would have to pick up more costs. For SNAP, reform includes expanding current work requirements to cover more beneficiaries. Beginning in 2028, states also would be required to pay a portion of food benefit costs, which are now fully paid by the federal government (taxpayers). 
  • Details: The House Energy & Commerce Committee approved 30-24 along party lines a bill May 14 with $880 billion in health savings as part of the reconciliation package. It features steep Medicaid cuts and rollback of climate programs. The plan includes: 
    • Work requirements for childless adults ages 19–6: Starting in 2029, require able-bodied Medicaid beneficiaries without dependents, ages 19 to 64, to work 80 hours a month.
    • Ending provider tax “loopholes” used to boost state Medicaid funding
    • Penalties for states covering undocumented immigrants
    • Codification of Trump-era ACA enrollment restrictions, and get rid of  income-based special enrollment periods for the Affordable Care Act exchanges.
    • Require states to assess eligibility for the Medicaid expansion population more frequently, requiring eligibility determinations every six months instead of annually.
  • CBO projects the bill would increase the number of uninsured people by 8.6 million in 2034 while reducing the deficit by $715 billion between 2025 and 2034.
• Renewable Energy: Clean energy industries would be hit by the Republican plan, which would roll back many provisions of former President Joe Biden’s climate law (Inflation Reduction Act). A tax credit for solar panels and other clean energy systems would be phased out, as would investment and production tax credits for wind, solar and other clean electricity production. Tax credits to produce nuclear power and hydrogen production also would be phased out.
• Electric Vehicle Makers: Tesla Inc., General Motors Co. and other electric vehicle makers would be hit by elimination of a consumer tax credit of up to $7,500 for the purchase of electric vehicles. The GOP proposal also ends tax credits for used and commercial electric vehicles.
• Major New Immigration Fees: Aimed at raising revenue and supporting enforcement. Key provisions include:
  • $1,000 fee for asylum applications — a first in U.S. history
  • $8,500 sponsorship fee for unaccompanied minors
  • $550 every six months to renew work permits
  • $500 for Temporary Protected Status (up from $50) 
  • $5,000 penalties for migrants who cross illegally or miss court hearings

 

Elite Universities

 

• Private colleges and universities with at least 500 students and endowments exceeding $2 million per student would pay a rate of 21% on net investment income, up from the current tax of 1.4%. That includes Harvard, Yale, Stanford, Princeton and MIT. 
• Colleges with endowments over $750,000 to $1.25 million per pupil will pay a 7% tax, while colleges with endowments over $1.25 million per student but below $2 million would pay 14%. Religious institutions are exempted.

 

Private Foundations

 

• Private foundations would face an escalating tax based on their size: 2.78% for private foundations with assets between $50 million and $250 million, 5% for entities with assets between $250 million and $5 billion; and 10% for foundations with assets of at least $5 billion, such as the Gates Foundation, a longtime target for Republicans.

 

Immigrants

 

• Several provisions would raise taxes on immigrants. That includes a new 5% tax on transfers of money to foreign countries, known as remittances. Many immigrants in the U.S. send money to relatives in their countries of origin. U.S. citizens could apply for credits to offset that cost.
• Restrict some immigrants’ access to tax credits for health coverage premiums. The change would prevent immigrants granted asylum or temporary protected status from accessing those credits.

 

Other Notable Provisions

 

• Repeal of BEAT Rate Increase: Repeals scheduled increases in the base erosion and anti-abuse tax (BEAT) rate.
• Inflation Adjustments: Provides inflation relief for all but the top income bracket in the individual tax rate schedules.

 

Legislative Process and Next Steps

The bill, totaling 389 pages, was approved on a party-line vote (26-19) after an extended markup session. All Democratic amendments were rejected. The measure will next be reviewed by the House Budget Committee, with GOP leadership aiming for swift passage by the full House.

 

Economic and Distributional Effects

Preliminary analysis projects that the bill would reduce federal tax revenue by approximately $4.0 trillion over ten years (2025–2034) on a conventional basis, with the largest share of tax reductions accruing to higher-income households.

 

SALT talks: Speaker Mike Johnson (R-La.) is in active talks with Republican members from high-tax states such as New York, New Jersey, and California who are pressing for a higher SALT cap than the current $30,000 limit, which phases out above $400,000 in annual income. “Johnson on Wednesday afternoon said he now needs the weekend to try to reach a deal with SALT holdouts. “We’re making progress,” said Rep. Mike Lawler (R-N.Y.), signaling optimism that a compromise will be reached before the markup concludes Wednesday. One of the options under consideration was a $40,000 cap for individuals and an $80,000 cap for couples. This would be very expensive. Rep. Nick LaLota (R-N.Y.) said there's “breathing room” to adjust within the committee’s $4 trillion deficit ceiling. “We’re getting closer and closer,” Johnson said late Tuesday, though final agreement is now expected Wednesday. Smith, however, cautioned that “wiggle room” remains tight. Any SALT changes will probably come as a manager’s amendment to the package.

 

Trump’s campaign pledges — no taxes on tips and overtime pay, plus new tax breaks for car buyers and seniors — are the centerpiece of the multitrillion dollar package that will serve as Republicans’ signature legislative effort. The party ultimately decided, after weeks of debate, against a tax hike on the wealthiest Americans.

 

The plan would also boost the debt limit by $4 trillion. 

 

The Clean Fuel Production Credit (45Z) is not being ended under the reconciliation package and would be extended through 2031 instead of ending in 2027. The program also shifts provisions to allow for feedstocks to come from Mexico or Canada, a nod to Canadian canola. The language further makes clear that imported used cooking oil (UCO) from China will not be able to be a feedstock used to produce fuel to claim the credit. The legislation would end the transferability of the 45Z credits, a provision that biofuel interests warn could stymie expansion of biofuel production. The end of transferability would prevent those producers from selling the credits to another biofuel producer.

 

— 45V (Hydrogen Credit) ends Jan 1, 2026

— 48E (Clean Electricity Investment) phases out with foreign entity restrictions | Reflects internal GOP pressure to eliminate most Inflation Reduction Act incentives

 

Timeline: The full reconciliation package heads to the House Budget Committee Friday.

Speaker Johnson aims to pass the legislation in the House by Memorial Day and send it to the Senate by July 4, aligning with Trump’s 100-day legislative goals. But as usual with the GOP-led House, there will likely be lots of drama until the vote is taken on the House floor.

 

Note: The Senate is expected to alter the House package when it considers its reconciliation measures.

 

 

Key Reconciliation Actions by the House Energy and Commerce Committee

 

On May 14, the House Energy and Commerce Committee passed its portion of the budget reconciliation bill by a vote of 30 yeas to 24 nays, following a 26-hour markup session.

 

Mandated Deficit Reduction

 

The committee was instructed to propose legislative changes to reduce the federal deficit by at least $880 billion over fiscal years 2025–2034.

 

Major Provisions Considered

 

The committee’s reconciliation package was organized into four main areas:

 

1. Energy: Rescission of Inflation Reduction Act (IRA) Funds: The bill would rescind unobligated balances from several IRA energy programs, including:

• State-Based Energy Efficiency Training Grants (Section 50123)
• Department of Energy Loan Program Office funding (Section 50141)

 

2. Environment: Environmental policy changes. 

• Repeal and Rescission of IRA Environmental Grants:
  1. Repeals Section 134 of the Clean Air Act, eliminating the Greenhouse Gas Reduction Fund (commonly known as “Green Banks”) and rescinds any remaining funds.
  2. Repeals and rescinds funding for diesel emissions reduction and air pollution monitoring, including funds specifically targeted at schools.

 

3. Communications:

• The bill includes a major spectrum auction initiative, directing the National Telecommunications and Information Administration (NTIA) and the Federal Communications Commission (FCC) to identify at least 600 MHz of spectrum (between 1.3 GHz and 10 GHz) for auction within two years.
• The FCC is required to complete an auction for at least 200 MHz within three years, and auction the remainder within six years.
• Certain frequency bands (3.1–3.45 GHz and 5.925–7.125 GHz) are excluded from auction eligibility.
• Auction proceeds must cover at least 110% of federal relocation or sharing costs.
• The Congressional Budget Office estimates this auction will generate $88 billion in new revenue, making it the second-largest revenue item in the committee’s reconciliation package.
• The telecommunications provisions advanced on a 29-24 party-line vote, with Democratic amendments (including proposals for 911 funding and cybersecurity requirements) rejected by the majority.

 

4. Health:

• Significant changes to Medicaid, including potential cuts and policy reforms affecting provider taxes and state-directed payments (see related item above under Reforms to Medicaid Health Coverage and Food Stamps).
• The committee’s actions are intended to prioritize health care for vulnerable Americans.

 

 

— House Ag Committee Clears Reconciliation Measure

Scaled state contributions ease internal tensions ahead of reconciliation debate

 

The House Ag Committee May 14 approved its reconciliation package in a party-line vote of 29-25. 

 

House Ag Chair GT Thompson (R-Pa.) said: "Our section of the One Big, Beautiful Bill restores integrity to the Supplemental Nutrition Assistance Program, provides relief to farmers, invests in the future of rural America, and prevents the largest tax increase on American families. We ensure that SNAP works the way Congress intended it to, by reinforcing work, rooting out waste, and instituting long-overdue accountability incentives to control costs and end executive and state overreach. We preserve the program’s ability to serve the most vulnerable long into the future. At the same time, we’re strengthening the farm safety net and delivering critical support to the farmers, workers, and communities that keep America fed. These commonsense solutions help build a stronger, more resilient rural America. I’m grateful to my colleagues on the Committee for their hard work, and I look forward to passing this bill in the House and delivering results for families across the country."

 

The House Ag Committee kicked off debate Tuesday on its budget reconciliation package with a controversial proposal to require states to share in the cost of food stamps. The plan, which would start in fiscal year (FY) 2028, drew early GOP criticism but won support from at least one previous holdout after the cost-share was scaled down.

 

The bill would reduce the deficit by $296 billion over 10 years — exceeding the $230 billion target in the budget resolution — largely by reshaping the Supplemental Nutrition Assistance Program (SNAP). Among the biggest changes:

• All states would cover at least 5% of SNAP costs.
• States with high payment error rates would pay more — up to 25%.
• SNAP administrative costs would shift from a 50/50 federal-state split to 75% state-funded. 
• SNAP benefit increases would be tied strictly to inflation.

 

Rep. Derrick Van Orden (R-Wis.), who had previously opposed a 10% baseline cost-share, said he supports the 5% proposal: “The committee got this right,” Van Orden said. “If states aren’t administering the program efficiently, they’ll pay a scaled and equitable share.” Wisconsin’s 2023 error rate was 5%, placing it at the base cost tier.

 

Craig: Cuts go too far. Ranking Member Angie Craig (D-Minn.) sharply criticized the plan: “The cut you are proposing to SNAP tonight would be the largest rollback of an anti-hunger program in our nation’s history.” She warned that bypassing traditional farm bill negotiations and attaching SNAP changes to reconciliation could undermine bipartisan support for the broader farm bill, which has already been extended twice.

 

Broader farm and conservation provisions. The reconciliation package also includes new investments in farm policy and conservation programs:

• Reference prices for all covered commodities beginning with 2025 crops would rise by 10–20%, increasing potential farm payments. Corn goes from $3.70 to $4.10 a bu., soybeans from $8.40 to $10.00 per bu. and wheat from $5.50 to $6.35 per bu. Other crops: Sorghum, $4.40. per bu., barley, $5.45 per bu., oats, $2.65, per bu. rice, $16.90 a cwt and 42 cents a pound for seed cotton. Beginning with the 2031 crop year, the reference price will automatically increase by 0.5% each year. However, it cannot be higher than 15% of the original reference price which would take about 20 plus years to hit that mark based on this small adjustment. 
  • Base acres will increase by 30 million acres. It appears this will be automatically done by FSA and producers can opt-out. 
  • ARC is bumped up to 90% guarantee from the current 86% level. The maximum payment amount will now be 12.5% of benchmark revenue, up from the current 10% cap. Both provisions begin with the 2025 crop year.
  • The equitable treatment of certain entities is made effective. This treats LLCs, S corporations and similar entities like a general partnership and eliminates the one payment limit for these entities. This was proposed last year, and the language appears similar. 
  • The payment limit for PLC and ARC is bumped from $125,000 to $155,000 and will be indexed to inflation starting with the 2025 crop.
  • Equipment gains, agritourism and direct-to-consumer marketing of agricultural products will now be considered farm income. This is very beneficial for farmers who need to meet the more than 75% farm AGI additional payment limits. Certain programs will be exempt from AGI limits assuming the farmer has more than 75% of their AGI is from farming. 
  • Loan rates have been bumped 10% for most commodities like last year’s proposal. Marketing loan rates would be increased to $3.72 a bu. for wheat, $2.42 a bu. for corn and sorghum, $2.75 a bu. for barley, $2.20 a bu. for oats, 55 cents a pound for cotton, $7.70 per cwt for rice and $6.82 a bu. for soybeans. 
  • Beginning farmers and ranchers will get additional premium assistance for crop insurance for up to ten years like last year’s provisions.
  • SCO is bumped up to 90% and the cost share is increased from 65% to 80%. 
  • All levels of crop insurance premium assistance are bumped 5% except for the 80 and 85% levels are only bumped 3%. For example, 38% of the premium at the 85% level was subsidized by the government. This will bump up to 41% under the reconciliation proposal.
• Three major conservation programs would see increased funding through FY 2031:
  • Agricultural Conservation Easement Program (ACEP): $625 million in FY26, rising to $700 million in FY 2031 
  • Environmental Quality Incentives Program (EQIP): $2.7 billion in FY 2026, rising to $3.3 billion in FY 2031 
  • Conservation Stewardship Program (CSP): $1.3 billion in FY 2026, rising to $1.4 billion in FY 2031