On May 16, 2025, hardline Republicans in the U.S. House of Representatives blocked President Donald Trump’s tax bill, which aimed to extend the 2017 tax cuts, eliminate taxes on some tips and overtime income, increase defense spending, and fund a border crackdown. The rejection came due to concerns that the bill did not sufficiently address federal spending cuts, hours before Moody’s downgraded the U.S. government’s credit rating from AAA, citing a rising debt burden projected to reach 134% of GDP by 2035. The House Budget Committee, led by Representative Jodey Arrington, rejected the bill in a rare defeat for Trump, with five of 21 Republicans voting against it, demanding deeper cuts to Medicaid and the repeal of Democratic green energy tax credits. Arrington scheduled a Sunday night session to revisit the bill. Moody’s criticized the lack of measures to address growing deficits and interest costs, warning of deteriorating fiscal performance compared to other developed economies.
Trump is furious: Tax Bill Tanks
“Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs.” – Moody’s
“We don’t need ‘GRANDSTANDERS’ in the Republican Party.” – President Donald Trump
Nonpartisan analysts: The tax bill “will add trillions to the federal government’s $36.2 trillion in debt.”
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