by Nicholas Ballasy
There appears to be broad consensus among House and Senate Republicans on the tax cuts to include in a reconciliation bill but they're still debating spending cuts to offset the cost.
President Donald Trump and congressional Republicans are negotiating a tax package that a budget watchdog group estimated could cost anywhere from $5 trillion to $11.2 trillion over the next decade.
A series of tax policy changes that Trump supports appear to have broad support among Republicans in Congress. The Committee for a Responsible Federal Budget has released a study that projects the cost of each item over a 10-year period. The possible tax changes are expected to be included in a budget reconciliation package, which allows the GOP to bypass the filibuster in the Senate, where they lack a 60-vote threshold. It is unclear at this time if the tax provisions will be passed in one large reconciliation bill or as part of a two-bill approach.
According to the CRFB, extending the Tax Cuts and Jobs Act, Trump's 2017 tax reform package, would cost between $3.9 trillion and $4.8 trillion.
By the numbers
Under the CRFB study, expanding the State and Local Tax deduction (SALT) would cost from $200 billion to $1.2 trillion.
- Eliminating taxes on tips, which Trump campaigned heavily on enacting, would result in a $100 billion to $550 billion reduction in federal tax revenue, according to the study;
- Exempting overtime pay from federal taxes would cost $250 billion up to $3.0 trillion;
- Exempting Social Security benefits from federal taxes would cost between $550 billion and $1.5 trillion;
- Lowering taxes for U.S. production of certain goods would cost between $100 billion and $200 billion;
- Reducing tax benefits for stadium owners and ending the carried interest loophole would save about $100 billion, according to the group.
Without significant spending cuts, the CRFB projected that the tax cuts would result in the national debt totaling from 132 to 149% of GDP by 2035, “compared to nearly 100 percent today and 118 percent under current law.”
Overall, the CRFB has estimated that all of the tax cuts currently on the table, if enacted, could result in a 1.3 to 3.0% Gross Domestic Product (GDP) reduction over 10 years.
House and Senate Republicans are still debating what spending cuts to include to offset the costs of the tax cuts in the full reconciliation package. House Speaker Mike Johnson, R-La., had proposed about $700 billion in spending cuts but members of the conservative House Freedom Caucus are advocating for more.
Tesla and SpaceX CEO Elon Musk, leader of the new Department of Government Efficiency, has been working on finding waste and fraud at the United States Agency for International Development (USAID) and going as far as trying to close the agency as a way to cut spending but it is unclear how much of a savings that would yield. Final closure of USAID would not be finalized without some sort of action from Congress.
Trump said at a news conference at the White House on Friday that Musk and DOGE are going to find ways that the U.S. government can save money at the U.S. Department of Education as well as the Defense Department.
“Pentagon, Education, just about everything. We’re going to go through everything,” Trump said at a joint press conference at the White House with Japanese Prime Minister Shigeru Ishiba.
Trump described the situation at USAID as "very unfortunate" and said most of the employees there have been dismissed.
“It was so bad, with what we just went through — with this horrible situation we just went through, and I guess 97% of the people have been dismissed,” Trump said.
“It was very, very unfortunate. You’re not going to find anything like that, but you’re going to find a lot. And I’ve instructed him to go check out Education, to check out the Pentagon, which is the military. And you know, sadly, you’ll find some things that are pretty bad,” he added.
The House GOP is considering wrapping border security funding provisions into the same reconciliation bill with the tax changes and spending cuts. Each component of that bill will be subject to approval by Elizabeth MacDonough, the Senate parliamentarian.
In the meantime, Senate Budget Committee Chair Lindsey Graham, R-S.C., has introduced a $342 billion budget resolution framework without any tax changes, which he said could be included in a second larger reconciliation bill later in the year.
“I have tremendous respect for Speaker Johnson, Chairman Smith and my House Republican colleagues,” Graham wrote on X Friday afternoon. “I hope the House will move forward soon, but we cannot allow this moment to pass, and we cannot let President Trump’s America First Agenda stall.”
Nicholas Ballasy
Source: https://justthenews.com/government/white-house/all-tax-cuts-likely-be-included-trump-and-gops-large-reconciliation-bill
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