On April 10, the U.S. House of Representatives passed a budget plan that paves the way for extending President Donald Trump's 2017 tax cuts.
However, Reuters reports that the 216-214 House vote is only the first step to allow Republicans to bypass the Senate Democrat's opposition and pass tax cut legislation later in 2024.
Reuters characterized the legislation as "a broad budget blueprint" that includes only a few details that Republicans can build on and tailor their tax cuts in the coming months. The bill also seeks to accomplish the other portion's of the Trump administration's agenda such as tightening border security and seeking to enhance the country's energy production.
The bill would cut taxes by roughly $5 trillion and add about $5.7 trillion to the federal government's debt over the next decade.
House Speaker Mike Johnson had hoped to pass it on April 9, but delayed the vote when some Republican members opposed the plan given that it does not cut spending enough. Two House Republicans voted against it on Thursday.
The legislation, which passed the Senate on Saturday, calls for a minimum of $4 billion in spending cuts. That is far less than a previous version approved by the House that mandates $1.5 trillion in cuts.
Senate Republicans say the $4 billion figure is simply a minimum that does not stop Congress from passing much larger spending cuts in the coming months, Reuters reports.
On April 10, the Treasury reported that gross customs duties in March totaled $8.75 billion, up by roughly $2 billion from a year prior and the highest since September 2022. A portion of the rise stems from the Trump administration's tariff increases since February, a Treasury official noted.
However, the figures indicate that tariff revenue is falling a lot short of what would be necessary to balance out the impact of the extended tax cuts. The bill would extend the 2017 tax cuts from the previous Trump administration.
Republican leaders stated that if there is no renewal of the tax cuts, Americans will experience a tax hike worth trillions of dollars. It is not clear how much added stimulus could result from extending cuts that are already in place.
Republicans are also working to pass additional tax breaks for overtime wages, tipped income and Social Security benefits.
Prior to the April 10 vote, Senate Majority Leader John Thune attempted to assuage the concerns of the House hardliners, promising that "we'll certainly do everything we can to be as aggressive as possible" with spending cuts.
Looking forward, higher spending cuts can put key Senate votes in jeopardy. Some moderate Republican senators have noted that they are also concerned about deep cuts to the Medicaid healthcare system.
Congressional Republicans are also set on utilizing the budget blueprint to raise the federal government's debt ceiling, which must be done sometime in the summer to avoid defaulting on the country's $36.6 trillion debt.