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Indebta > News > US House passes budget resolution to cut taxes and spending by trillions
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US House passes budget resolution to cut taxes and spending by trillions

News Room
Last updated: 2025/02/25 at 9:53 PM
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The US House of Representatives has passed a budget resolution that calls for trillions of dollars in tax and spending cuts, in a significant victory for President Donald Trump as he seeks to enact sweeping changes in fiscal policy.

The resolution passed by 217 votes to 215 after a campaign by House Speaker Mike Johnson to push Republican holdouts to back Trump’s “big beautiful bill”.

The bill, which will kick off another round of budget talks in the Senate, proposes $4.5tn in tax cuts, about $2tn in spending cuts and allocating hundreds of billions of dollars more for the military and border security over a decade.

“Today, House Republicans moved Congress closer to delivering on President Trump’s full America First agenda — not just parts of it,” House Republican leaders said.

Since Republicans hold a razor-thin majority in the House, even a small number of dissenting votes from within the party would have jeopardised the passage of the bill.

Three House Republicans — Tim Burchett, Victoria Spartz and Warren Davidson — had indicated they would vote against it, but all fell in line behind the Speaker. Thomas Massie was the only Republican to vote against it. Before the vote, Massie posted on X: “If the Republican budget passes, the deficit gets worse, not better.”

Budgets are non-binding resolutions that outline fiscal goals. They signal to congressional committees how much to increase or reduce spending but do not lay out specific programmes that should be targeted.

Once the Senate passes the budget, Republicans in Congress can start a process known as “reconciliation” and ultimately pass legislation without Democratic support extending tax cuts enacted during Trump’s first term in 2017.

The bill instructs the House energy and commerce committee to slash $880bn in spending, a move widely seen as targeting the Medicaid health insurance programme for low-income Americans. Similarly, a call for the agriculture committee to reduce spending by $230bn is aimed at a food aid scheme called the Supplemental Nutrition Assistance Program.

According to the non-partisan Committee for a Responsible Federal Budget, the new measures would add at least $2.8tn to the deficit by 2034.

“It’s truly unfathomable that when confronted with multitrillion-dollar deficits and debt climbing towards record highs, lawmakers’ response is to pass a budget allowing themselves to add trillions more in debt over the next decade,” said Maya MacGuineas, president of the committee.

But Joshua Bolten, the chief executive of the Business Roundtable lobby group, applauded “the House for advancing an FY 2025 budget resolution. The House’s vote marks a pivotal moment in Congress’s work to protect and boost the economic benefits that tax reform delivered for American businesses, workers and families”.

The House budget would also raise the debt ceiling by $4tn, something that would temporarily remove the threat of a debt default.

Democrats described the budget as a “disgrace”. Leaders of the New Democrat Coalition, a group of moderate Democratic lawmakers, said: “It betrays working families by slashing funding for critical programmes they rely on to help pay their bills and keep food on the table, all while lining the pockets of Republican megabillionaire donors like Elon Musk with trillions of dollars in deficit-raising tax cuts.”

Johnson faced resistance from Republicans concerned about the potential impact on Medicaid, as well as those who felt the bill should go even further in reining in spending.

The party’s leaders have defended the cuts, insisting they will stimulate economic growth and, along with other Trump measures such as tariffs, limit increases to the deficit. Independent analysts dispute the extent to which economic gains will offset the deficit increases.

The bill’s passage comes as congressional leaders are battling to pass legislation to avoid a government shutdown on March 14.

Additional reporting by James Politi in Washington

Read the full article here

News Room February 25, 2025 February 25, 2025
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