Trump, congressional Republicans plan ambitious 100-day fiscal agenda

A tax cut for millionaires, and for almost everyone else.

The end of COVID-19-era government subsidies that some Americans have used to purchase health insurance.

Limits on food stamps, including for women and children, and other social protection programs. Setbacks in green energy programs from the era of President Joe Biden. Mass deportations. Government job cuts to “drain the swamp.”

After winning the election and coming to power, Republicans plan an ambitious 100-day agendawith President-elect Donald Trump in the White House and the Republican majority in Congress to achieve their political objectives.

At the top of the list is the plan to renew the roughly $4 trillion GOP tax cuts that are about to expire, a signature national achievement of Trump’s first term and an issue that could define his return to office. White House.

“What we’re focused on now is being prepared on day one,” House Majority Leader Steve Scalise said after recently meeting with Republican colleagues to chart a path forward.

The policies that emerge will revive long-running debates about America’s priorities, its huge income inequalities, and the appropriate size and scope of its government, especially in the face of growing federal deficits, which now approach $2 trillion. per year.

The discussions will test whether Trump and his Republican allies can achieve the kinds of real results that voters wanted, needed or supported when they gave control of Congress and the White House to the party.

“In this case, the past is really prologue,” said Lindsay Owens, executive director of Groundwork Collaborative, recalling the 2017 tax debate.

Trump’s first term was defined by those tax cuts, passed by Republicans in Congress and enacted only after his initial campaign promise to “repeal and replace” Democratic President Barack Obama’s health care law failed with the famous vote against then-Senator John McCain.

The Republican majority in Congress quickly assumed tax cutsassembling and approving the multitrillion-dollar package by the end of the year.

Since Trump signed those cuts into law, the big benefits have fallen on higher-income households. The top 1 percent, meaning those earning nearly $1 million and more, received an income tax cut of about $60,000, while those earning the lowest incomes only cut a few hundred dollars, according to the report. Tax Policy Center and other groups. Some people ended up paying about the same.

“The big economic story of America is growing income inequality,” Owens said. “And that is, interestingly, a fiscal story.”

In preparation for Trump’s return, congressional Republicans have been meeting privately and with the president-elect for months to review proposals to extend and improve those tax cuts, some of which would expire in 2025.

That means maintaining multiple tax brackets and a standardized deduction for individual taxpayers, along with existing rates for so-called pass-through entities, such as law firms, medical offices or businesses that take their profits as individual income.

Typically, the cost of tax cuts would be prohibitive. The Congressional Budget Office estimates that maintaining expiring provisions would add about $4 trillion to deficits over a decade.

In addition to that, Trump wants to include his own priorities in the fiscal package, among them, reduce the corporate rate to 15%, currently at 21% since the 2017 lawand eliminate individual taxes on tips and overtime.

But Avik Roy, president of the Equal Opportunity Research Foundation, said blaming the tax cuts for the country’s income inequality is “simply nonsense” because taxpayers at all income levels benefited. Instead, he points to other factors, such as the Federal Reserve’s historically low interest rates, which allow for low-cost lending, even to the wealthy.

“Americans don’t care if Elon Musk is rich,” Roy said. “What matters to them is what is being done to improve their lives”

Typically, policymakers want the cost of a policy change to be offset by budget revenues or reductions in other areas. But in this case, there are almost no agreed-upon revenue increases or spending cuts in the $6 trillion annual budget that could cover such a huge cost.

Instead, some Republicans have argued that the tax cuts will pay for themselves, with indirect revenue from potential economic growth. The tariffs Trump proposed last week could provide another source of offsetting revenue.

Some Republicans argue that simply extending the tax cuts without offsetting the costs has precedent, because they are not new changes but rather existing federal policies.

“If you just extend the current law, we’re not raising taxes or lowering them,” Sen. Mike Crapo, the incoming chairman of the Senate Finance Committee, said on Fox News.

He noted that criticism that tax cuts would increase the deficit is “ridiculous.” There is a difference between taxes and spending, he said, “and we just have to communicate that message to the United States.”

At the same time, the new Congress will also consider spending reductions, particularly for food stamps and health care programs, goals long sought by conservatives as part of the annual appropriations process.

One of the cuts will almost certainly fall to the COVID-19 era subsidy, which helps defray the cost of health insurance for people who purchase their own policies through the Affordable Care Act. .

The additional health care subsidies were extended through 2025 in Democratic President Joe Biden’s Inflation Reduction Act, which also includes several green energy tax cuts that Republicans want to reverse.

House Democratic leader Hakeem Jeffries of New York scoffed at the Republican claim that they have won “a huge, huge mandate” when, in fact, House Democrats and Republicans essentially fought to almost a tie in the November elections, with Republicans achieving only a narrow majority.

“This idea about a mandate to make extreme far-right policy changes, it doesn’t exist, it doesn’t exist,” Jeffries said.

Republicans plan to use a budget process, called reconciliation, that allows majority approval in Congress, essentially along party lines, without the threat of a Senate filibuster that could stop a bill from moving forward, unless 60 of the 100 senators agree.

It’s the same process that Democrats used, when they had power in Washington, to pass the Inflation Reduction Act and Obama’s health care law, over the GOP’s objections.

Republicans have been here before with Trump and control of Congress, which is no guarantee they can achieve their goals, particularly in the face of resistance from Democrats.

Still, House Speaker Mike Johnson, who has worked closely with Trump on the agenda, has promised a “breakneck” pace in the first 100 days “because we have a lot to fix.”

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