House Republicans released a budget resolution (link) to begin the reconciliation process. The resolution allocates $4.5 trillion to the House Ways and Means Committee for tax cuts, falling short of what tax writers say is needed for the president’s tax priorities. It also includes a $4 trillion debt limit increase and outlines $1.4 trillion in spending cuts over the next decade. The plan also calls for $300 billion in new spending, likely for immigration enforcement and defense.
Of note: Dozens of current GOP lawmakers are opposed to raising the debt ceiling on principle and have never voted to support an increase to the nation’s borrowing limit. Previous increases have required bipartisan support.
House Speaker Mike Johnson’s (R-La.) budget plan is at risk due to ongoing Republican infighting and a slim House majority. Any two Republicans joining with Democrats could derail the plan.
Johnson wants the Budget Committee to approve the plan on Thursday, Feb. 13. A full House vote is expected at the end of the month. If passed by both chambers, a bill aligning with the budget must be crafted to enact tax cuts and a debt ceiling increase.
Fiscal budget Hawks in the House are demanding deeper non-defense spending cuts in any tax bill. Moderate Republicans oppose cutting social programs like Medicaid.
GOP members also disagree on how much deficit increase is acceptable to facilitate tax cuts.
House Ways and Means Chairman Jason Smith (R-Mo.) advocates for deficit flexibility to prioritize Trump-era goals like ending the tax on tipped wages. Coastal Republicans (N.Y., N.J., Calif.) want to end the cap on state and local tax deductions, benefiting property owners in their states.
On the spending side, the largest cuts would be at least $880 billion from the Energy and Commerce Committee, which has jurisdiction over Medicaid, the health insurance program for low-income people. Republicans have talked about several Medicaid changes, including work requirements for able-bodied beneficiaries and revisions to funding formulas for the federal-state program. Other possible spending-cut targets include student-loan programs.
The House budget resolution does not provide specific details on the $230 billion in agriculture-related cuts. The resolution directs the Agriculture Committee to find $230 billion in spending reductions over 10 years. However, the exact breakdown of these cuts is not specified in the resolution itself. Key points about the proposed agriculture cuts:
- The $230 billion figure is a target for the Agriculture Committee to meet through spending reductions.
- While specific details are not provided, it is likely that a significant portion of these cuts would come from the Supplemental Nutrition Assistance Program (SNAP/food stamps). Republicans have stated that any SNAP-related changes would focus on reducing waste and fraud rather than cutting existing benefits for participants. Some potential areas for cuts being considered include updating work requirements and limiting future updates to the Thrifty Food Plan, which is used to calculate SNAP benefits.
- The $230 billion figure is not necessarily all from SNAP.
Of note: This budget resolution is a blueprint for a later reconciliation bill, and the specific details of the cuts will need to be worked out by the Agriculture Committee and negotiated with the Senate. The final numbers and policy changes may differ from what is currently proposed in the resolution.
Senate’s alternative plan. Frustrated by House delays, Senate Republicans are proposing a scaled-back plan. Defense and border security funding would be offset by unspecified spending cuts. Tax cuts are postponed for now.
Democrats argue that the GOP’s plan prioritizes tax cuts for the wealthy at the expense of social programs that help low-income Americans.
Republicans are using the process known as budget reconciliation to advance Trump’s priorities. That approach lets them push a bill through the Senate with a simple majority, avoiding the 60-vote filibuster threshold and the need for Democratic votes.
Without congressional action, the 2017 tax cuts — such as lower individual tax rates and business-related tax breaks— will expire at the end of 2025.