• Trump's tax cut bill has passed a key congressional committee with a narrow vote.
• The nonpartisan analysis estimates the bill could add $3-5 trillion to the national debt.
• Party divisions remain as hardliners demand deeper cuts to Medicaid and other social programs.
• House Republicans are seeking Trump's leadership to unify their approach before a House vote.
• The credit rating agency Moody's has downgraded the US based on rising debt concerns.

President Donald Trump’s sweeping tax-cut bill has gained momentum, passing a crucial congressional committee and advancing towards a full House vote, set for later this week. This victory comes after earlier delays due to infighting among Republicans, particularly regarding spending cuts to Medicaid and the repeal of green energy tax credits. The bill, which seeks to extend tax cuts from Trump’s first term, is projected by nonpartisan analysts to add between $3 trillion and $5 trillion to the national debt of $36.2 trillion over the next decade, raising significant economic concerns, according to aljazeera, scmp, and reuters.

The legislation aims to eliminate taxes on tips and overtime income while boosting defense spending and increasing funding for immigration enforcement. However, it has faced opposition from moderate Republicans who fear that cuts to Medicaid could harm their constituents. Notably, the bill could result in about 8.6 million individuals losing Medicaid coverage, creating tensions within the party as some members seek larger cuts to welfare programs, as reported by aljazeera and scmp.

The urgency to finalize the bill comes as Moody's downgraded the US government’s credit rating, citing concerns over rising national debt and inadequate responses from Congress. House Speaker Mike Johnson, who is pushing hard for the bill's passage by Thursday, acknowledged the difficulties ahead but expressed optimism for achieving a balance among competing interests within the party, stating, "I’m very optimistic we will find the right equilibrium point to get this bill delivered," according to reuters.

Trump plans to meet with House Republicans to discuss the tax bill and mend divisions, emphasizing his intent to unify the party around the proposed cuts. Given the narrow Republican majority of 220-213 in the House, support from moderate Republicans is crucial to avoid a repeat of the previous legislative roadblocks faced by the tax bill. Failure to secure such support could lead to significant ramifications ahead of the looming debt ceiling negotiations, according to scmp and reuters.

As lawmakers prepare for a vote, economic experts warn that the proposed cuts and the accompanying debt increase could exacerbate fiscal challenges, with some calling for a restructuring of spending priorities. Senator Chris Murphy highlighted the risks associated with the credit downgrade, stating that it signals potential economic struggles and cautioning about rising interest rates for businesses and homeowners, a sentiment echoed by multiple sources, including scmp and reuters.