GOP Infighting Blocks Trump Tax Bill Amid Moody’s U.S. Credit Downgrade

Hardline Republicans in the U.S. House blocked President Donald Trump’s proposed tax bill on Friday, just hours before Moody’s downgraded the U.S. government’s credit rating due to surging debt. The bill, aimed at extending Trump’s 2017 tax cuts and eliminating taxes on tips and overtime, was criticized for not including sufficient spending reductions. Moody’s, now the last major agency to strip the U.S. of its AAA rating, warned the debt-to-GDP ratio could reach 134% by 2035, up from 98% in 2024.

The House Budget Committee rejected the bill, with five Republican members joining all Democrats in opposition. Trump urged unity, blasting dissenters as “grandstanders.” Committee Chair Jodey Arrington scheduled a rare Sunday vote to try again. Critics within the GOP are demanding deeper cuts to Medicaid and a full repeal of green energy tax credits.

The proposed bill also increases defense spending, funds stricter immigration controls, and removes taxes on firearm silencers. However, the Congressional Budget Office estimates the legislation would cost up to $4.5 trillion over a decade, a figure that has split Republicans. Moderates fear that slashing social programs could hurt their majority in the 2026 elections.

Representative Chip Roy said the U.S. is “writing checks we cannot cash,” demanding major reforms. Democrats warned the bill could cause 8.6 million Americans to lose health coverage by cutting Medicaid and Affordable Care Act subsidies. While the bill includes work requirements for Medicaid starting in 2029, hardliners want them enforced immediately.

The standoff highlights deep divisions within the GOP and the challenge of balancing tax cuts with fiscal responsibility, all while facing increased scrutiny over America’s ballooning debt and deteriorating fiscal outlook.