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House Speaker Mike Johnson (R-LA) speaks alongside other House Republican leaders after the House passed budget reconciliation legislation, May 22, 2025.
House Republicans passed their colossal domestic-policy package early Thursday morning, clinching a vote of 215-to-214 while most of America slept. The GOP mega-bill, which diverts hundreds of billions of dollars in federal funding from social safety net programs, is now bound for the Senate floor.
“It’s not surprising that this bill was written behind closed doors and rushed through in the night before Americans had a chance to see what it contains,” Amy Hanauer, executive director of the Institute on Taxation and Economic Policy, told the Prospect. “This bill extends enormous tax cuts to those who have the most. It will increase inequality, reduce health coverage, and take food from people’s tables, all to shower the wealthiest people in this country and foreign investors with tax breaks.”
This comes on the heels of a sustained rift within the Republican Party. In an April 14 letter to GOP leadership, a dozen House Republicans vowed to preserve Medicaid, citing concerns over the potential knock-on effects of gutting the program on health care providers across the country. The self-described “Members of Congress who helped to deliver a Republican Majority” committed to supporting “targeted reforms” to Medicaid. “However, we cannot and will not support a final reconciliation bill that includes any reduction in Medicaid coverage for vulnerable populations,” they wrote.
In the end, hard-liners got almost everything they wanted, and moderates folded. As I have previously reported, the reconciliation package is lined with provisions that would do terrific damage to Medicaid. Indeed, Republicans added a slew of last-minute changes making it even worse. For instance, Medicaid work requirements will become effective at the end of next year instead of starting on January 1, 2029, and previous measures targeting marginalized communities—including undocumented immigrants and transgender individuals—have been intensified.
It also includes a separate policy proposal from the House Ways and Means Committee, which focuses on tax policy. That proposal seeks to expand Section 199A, a provision of the federal tax code implemented during the first Trump administration as part of the Tax Cuts and Jobs Act (TCJA) of 2017. The tax section of the GOP mega-bill would raise the percentage of qualifying business income (QBI) filers can deduct from their taxes from 20 percent to 23 percent, widen eligibility for larger deductions, and provide a tax break for investors in business development companies, or BDCs. Section 199A expires at the end of this year, but Republicans are keen to extend it. As the Tax Law Center at New York University points out, extending the pass-through deduction would “make it more generous and more available to higher-income taxpayers.”
Why did the moderates fold? One reason might be their own personal benefit. Among the population of potential beneficiaries to 199A expansion are six House Republicans, all of whom signed the recent letter opposing deep cuts to Medicaid. According to an analysis of annual federal disclosures shared exclusively with the Prospect, six lawmakers—Reps. Rob Bresnahan (R-PA), Rob Wittman (R-VA), Jen Kiggans (R-VA), Young Kim (R-CA), Juan Ciscomani (R-AZ), and Jeff Van Drew (R-NJ)—each reported between $5,000 and $137,000 in income that could benefit from an expansion of the pass-through deduction. Cash in Congress, a research project from the nonpartisan watchdog group Accountable.US, calculated estimates for the amount of income each lawmaker would be able to deduct under Section 199A if the proposal to increase the percentage of qualifying income to 23 percent becomes law. The findings indicate this increase would allow each of the six representatives to deduct more pass-through income from rental properties and certain businesses.
Reps. Bresnahan, Wittman, Kiggans, Kim, Ciscomani, and Van Drew were among the 215 Republicans casting votes in favor of the GOP mega-bill.
“It is the peak of hypocrisy that the loudest and most vocal opponents of Medicaid cuts cowered in a matter of days in favor of a bill that will make the largest cuts to Medicaid in modern history—all to pay for lower taxes for the richest. Even worse, those very members stand to financially gain from those tax cuts, while their own constituents lose their health care,” Tony Carrk, executive director of Accountable.US, told the Prospect.
For the 2023 filing year, the representatives disclosed a combined approximately $327,000 in pass-through income eligible for deductions under Section 199A.
Rep. Bresnahan stands to benefit the most from extending the Trump-era tax rule, reporting $137,000 or more in pass-through rental income from several properties in his latest annual federal disclosure. Pennsylvania’s Eighth Congressional District also has the highest number of Medicaid enrollees of any of the districts, with 230,000 people receiving health care benefits through the program, according to research from Cash in Congress.
Rep. Wittman reported $105,000 or more in pass-through rental income. Nearly 125,000 people in Virginia’s First Congressional District are enrolled in Medicaid. Rep. Kiggans, who reported $50,000 or more in pass-through rental income from a Virginia Beach condo, has almost 130,000 Medicaid recipients in her district.
Rep. Kim reported $15,000 or more in pass-through rental income from a property in La Habra, California. The average median home price in La Habra came in at about $800,000 last month, and the cost of living is 56 percent above the national average. More than 136,000 people in California’s 40th Congressional District are enrolled in Medicaid.
Rep. Ciscomani reported $15,000 or more in pass-through income from a consulting firm owned by his spouse. Over 171,000 people in Arizona’s Sixth Congressional District are Medicaid recipients.
Last but not least, Rep. Van Drew reported $5,000 or more in pass-through rental income. Close to 179,000 people in his district receive Medicaid benefits.
All told, that adds up to about 971,000 Medicaid beneficiaries living in the districts these six Republicans represent.
Section 199A will expire at the end of this year if Congress fails to extend it. In its current form, the extension would cost a whopping $730 billion over the next decade, with the proposed changes adding another $50 billion.
Republicans have framed this idea as a tax policy designed to help small businesses and family farms. In reality, it has disproportionately benefited the wealthiest Americans, significantly reduced federal tax revenue, and incentivized filers to game the system by intentionally mischaracterizing earnings from certain high-income partnerships as deductible income. Moreover, pass-through noncompliance, typically stemming from underreporting business income to the Internal Revenue Service, is among the largest sources of the nation’s tax gap (the difference between legally owed tax and what is actually collected).
American for Tax Fairness, a coalition of civil society groups advocating for progressive tax reform, described the Trump-era tax rule as “a huge special-interest tax break available to some of the wealthiest individuals in the country,” adding that it “does nothing to prevent abuse by millionaires and billionaires.”
Perhaps the most incendiary piece of the Republican plan to modify Section 199A is the elimination of the phaseout cap. According to the Tax Law Center, 2025 phaseout rules set this cap at $247,300 for single filers and $494,600 for joint filers. Beyond that, the expanded QBI deduction does not apply. If the GOP mega-bill manages to clear the Senate floor and lands on President Trump’s desk, the phaseout would be calculated based on a flat percentage, effectively expanding “eligibility for, and the value of the deduction to, higher-income taxpayers whose pass-through business income makes up a larger share of their overall income,” as the Tax Law Center notes.
“The proposal takes an inefficient, inequitable, and costly policy, and makes it more generous and more valuable to higher-income people, especially those in certain industries including lawyers and lobbyists,” said Chye-Ching Huang, executive director of the Tax Law Center.
This monstrous Frankenstein bill will face myriad challenges in the Senate. Given that internal GOP divisions over pushing up the federal budget deficit by trillions of dollars and contentions over its policy provisions are likely to persist, it is unclear whether Republicans’ domestic-policy package will make it to Trump’s desk. What remains clear, though, is that while Speaker of the House Mike Johnson kept his promise to pass it before Memorial Day, these six GOP “moderates” broke theirs, selling out hundreds of thousands of people in their own backyards while voting to collect a large tax break for themselves.
“Their votes aren’t just a flip-flop,” Carrk told the Prospect. “They are a betrayal to hardworking Americans everywhere who will be worse off because of this bill.”
