Senate Majority Leader John Thune has established an April 11 deadline for reaching a final agreement between House and Senate Republicans on a budget resolution. This resolution is expected to support President Donald Trump’s proposed tax-cut legislation, referred to as “one, big, beautiful” bill.
There is hope for both chambers to adhere to this timeline, as considerable work remains. Some conservatives have criticized Senate Republicans for perceived delays. However, Senate Finance Committee Chair Mike Crapo has been diligently working on the comprehensive tax-cut bill.
A number of senators are focused on translating Elon Musk’s DOGE budget savings into potentially multiple rescission packages to reverse spending by effectively canceling checks. Meanwhile, the Senate has a budget package addressing border security, deportations, energy reform, and military funding increases. Integrating Mr. Crapo’s tax-cut plan with this package is seen as feasible.
Nonetheless, the House also faces significant challenges. It is noteworthy that Speaker Mike Johnson succeeded in passing a budget, marking a notable achievement. However, the House budget resolution contains several issues. It does not ensure the permanence of the Trump tax cuts, nor does it incorporate Senator Crapo’s current policy baseline, which would make the tax cuts permanent without increasing the deficit, an approach previously used by former President Barack Obama.
Instead, a problematic linkage between spending cuts and tax cuts has been produced by the House, which some view as a mistake reminiscent of pre-Reagan Republican strategies wherein tax cuts were delayed until deficits were reduced—a situation which often resulted in neither action being taken.
Both Senate and House Republicans face challenges in advancing Trump Tax Cuts 2.0 because the current policy baseline applies only to the first iteration of these cuts. President Trump’s proposed policies, including tax-free tips and overtime, Social Security benefits adjustments, a 15% corporate tax cut for ‘Made in America’ products, and 100% retroactive expensing for factories, would require new measures.
These new policies could potentially be combined into a single bill, though ensuring effectiveness would demand significant dynamic growth scoring to account for revenue growth based on supply-side economic theories. Hence, both legislative bodies are still somewhat distant from achieving a tax-cut driven blue-collar economic boom. However, there is confidence that, inspired by Ronald Reagan, Donald Trump could finalize the agreement.
