This week, the House of Representatives passed a first step in enacting a very large and perhaps unprecedented Congressional budget resolution. Supporters are hailing it as the biggest legislative signing in U.S. history. This bill lays out tax and regulation cut blueprints that go well beyond the norm. Its overarching goal is to continue remaking the nation’s financial landscape in the mold first outlined during former President Donald Trump’s administration. Yet the legislation, which was passed late Thursday, is an enormous budget blueprint with few details but massive consequences.
The House has passed this budget blueprint, and it does more than send a message. It paves the way for a permanent extension of Trump’s 2017 tax cuts and gives Congressional Republicans the tools they need to beat back Democratic resistance while going for more tax cuts. The legislation proposes roughly $5 trillion in offsetting tax cuts. It will increase the federal government’s debt by net $5.7 trillion over the next 10 years.
Congressional Republicans would use this radical budget blueprint to…address the federal government’s $31.4 trillion debt ceiling. Or they’ll have to raise it by this coming summer, before the fiscal cliff, to avoid a default on our nation’s $36.6 trillion debt. The urgency connected to this issue further raises the stakes around this budget bill. If we do not raise the debt ceiling, the impact on the U.S. economy would be catastrophic.
For years now, Trump has been complaining about the water pressure in American toilets. In particular, he zeroes in on malfunctioning showers, sinks and toilets. He has long blamed these problems on federal water-conservation standards, and his administration took steps to roll back such regulations.
“By restoring shower freedom, President Trump is following through on his commitment to dismantle unnecessary regulations and put Americans first.” – White House
This renewed focus on regulatory reform is part of Trump’s broader agenda that includes proposals for additional tax breaks targeting overtime wages, tipped income, and Social Security benefits.
More ambitious than its predecessors, even after the House’s strong action, clouds still gather around the bill’s prospects in the Senate. The Senate’s budget resolution —called a reconciliation bill —requires a minimum of $4 billion in spending reductions. This would be in direct opposition to the House’s overall strategy. Republican Rep. Mike Johnson canceled a vote on the Senate’s budget resolution due to lack of support, raising questions about party unity moving forward.
The House’s budget vote is the first step of many in a promisingly ambitious, though likely contentious, legislative process. It aims to give Republicans all of the tools they need to move their economic agenda through with little to no help from Democrats.
“Congratulations to the House on the passage of a Bill that sets the stage for one of the Greatest and Most Important Signings in the History of our Country. Among many other things, it will be the Largest Tax and Regulation Cuts ever even contemplated. MAKE AMERICA GREAT AGAIN!” – Donald Trump
The implications of this legislation are far-reaching. This unprecedented move towards expansionary fiscal policy will change the direction of our federal tax code for millions of Americans. In so doing, it will change the entire trajectory of federal spending. The Trump team is leading this endeavor with the most audacious vision. Supporters have high hopes these changes will spur more economic development and help relieve the tax burden on taxpayers.
While negotiations continue behind the scenes, ultimately, you can’t have both chambers paddling in opposite directions. The result of this discretionary budget blueprint will be very important to all Americans. News Sign-up The challenges of the current federal debt ceiling add an additional layer to this negotiation, requiring urgent and bold action by lawmakers.