Trump agenda hangs in balance as Republican rebels sink mega-bill

REPUBLICAN fiscal hawks on Friday sank a key vote on advancing the mega-bill that is the centrepiece of Donald Trump's domestic agenda, in a significant setback for the US president's tax and spending policies.

Trump is pushing to usher into law his so-called "One Big, Beautiful Bill", pairing an extension of his first-term tax cuts with savings that will see millions of the poorest Americans lose their health care coverage.

However, a deeply divided congressional Republican Party with varying competing priorities has complicated the process, raising serious doubts that the sprawling package can pass a vote of the full House of Representatives next week.

Despite a social media post by Trump calling holdouts in his party "grandstanders," five conservatives in the Republican-led House Budget Committee joined Democrats on Friday to reject the legislation.

"This bill falls profoundly short. It does not do what we say it does with respect to the deficit. We are writing checks we cannot cash and our children are going to pay the price," said Texas conservative Chip Roy.

The panel was tasked with bundling together the 11 different bills Republicans have approved over the last few weeks through their policy committees - typically a perfunctory, if necessary, step on the way to the House floor.

The budget committee's no vote is not the final word on the package, which will be reworked and sent back to the committee next week.

But it laid bare disagreements that have so far proved intractable between the party's coastal moderates and its right flank that could still spin the president's agenda off the rails.

The Energy and Commerce Committee has passed cuts totalling more than $880 billion over a decade from health care programs, mostly from the Medicaid health insurance program for 70 million low-income Americans.

The Congressional Budget Office found that the panel's work would mean 8.6 million additional people losing health insurance -- stoking concerns among Republican moderates.

But conservatives are furious that the package does not go far enough in cutting government spending -- pointing specifically to work requirements for Medicaid entitlement that do not kick in until the end of Trump's term.

The so-called SALT Republicans - a faction demanding bigger deductions in state and local taxes - are also at loggerheads with Republican leadership.

House Speaker Mike Johnson is expected to spend the weekend seeking a compromise with his party's rebels, before another attempt to pass the bill through the budget panel on Monday.

But it will be a fraught balancing act, as any concession he makes to the debt hawks could cause a chain reaction of defections from the moderates.

Republican senators, meanwhile, have made no secret of their intention to make major changes when the package reaches the upper chamber.

"We've been talking with the House and there's a lot of things we agree on ... But there'll be changes in a number of areas," John Hoeven of North Dakota told NBC.

- AFP