President Donald Trump’s tax cuts are on track to become a permanent fixture after the House narrowly approved a $5.8 trillion over ten years concurrent budget resolution that initially faced uncertainty.
If the Trump tax cuts expire at the end of this year, the average taxpayer could face a 22% tax increase and a reduction in their standard deduction by half. Additionally, the child tax credit would decrease from $2,000 per child to $1,000 per child, as reported by The Center Square.
House Speaker Mike Johnson, R-La., had to delay the vote on Wednesday night due to resistance from several Republicans who were hesitant to support the bill, which includes a $5 trillion debt ceiling increase.
In a tight 216-214 vote on Thursday morning, only two Republicans, Reps. Thomas Massie, R-Ky., and Victoria Spartz, R-Ind., voted against the resolution.
Johnson managed to persuade other conservatives to vote in favor of the bill by promising deeper spending cuts than what the bill mandates.
The Senate’s amendment to the House’s $4.5 trillion budget resolution maintains the House’s savings targets of $1.5 trillion in committee cuts but sets a $4 billion savings floor for Senate committees. The amendment changes the calculation of the costs of extending the 2017 Tax Cuts and Jobs Act by using a current policy baseline, which treats the extension as a continuation of current law rather than new policy, potentially reducing the budget’s cost by $3.8 trillion.
Furthermore, the Senate’s revision allocates an additional $1.5 trillion for Senate committees to make Trump’s tax cuts permanent, as it considers the costs of extension to be zero.
While the chambers typically adopt identical budget resolutions, Senate Majority Leader John Thune and Johnson opted for a two-tier approach to expedite the enactment of Trump’s priorities.
Critics have labeled the use of the current policy baseline as a “gimmick,” with estimates suggesting that the Senate’s plan could increase the national debt by at least $37 trillion over the next 30 years. The Committee for a Responsible Federal Budget cautioned that the Senate’s proposal could add at least $5.8 trillion to the federal deficit over the next decade, equivalent to the combined cost of several major legislation.
The passage of the resolution initiates the budget reconciliation process, where House and Senate committees will develop program-specific legislation to fulfill the spending and saving requirements necessary to implement Trump’s tax, border, and energy agenda.
In conclusion, the approval of the concurrent resolution signifies a significant step towards solidifying President Trump’s tax cuts and shaping the future fiscal landscape.
