WASHINGTON (AP) — A tax break for millionaires and almost everyone else.
An end to COVID-19-era government subsidies that helped some Americans get health insurance.
Restrictions on food stamps, including for women and children, and other safety net programs. Rollbacks to Biden-era green energy programs. Mass deportations. Government job cuts to “drain the swamp”.
After winning the election and coming to power, Republicans are planning an ambitious 100-day agenda with President-elect Donald Trump in the White House and Republican lawmakers with a majority in Congress to achieve their policy goals.
At the top of the list is a plan to extend about $4 trillion of expiring Republican tax cuts, a hallmark domestic success of Trump’s first term and an issue that could define his return to the White House.
“Our focus now is on being ready on day one,” House Majority Leader Steve Scalise, R-La., said after meeting recently with GOP colleagues to plan the path forward.
The emerging policies will revive long-standing debates about America’s priorities, its gaping income inequalities and the right size and scope of its government, especially given rising federal deficits that now total $2 trillion a year.
The discussions will test whether Trump and his Republican allies can, in practice, achieve the results they wanted, needed or supported when voters gave the party control of Congress and the White House.
“The past is really prologue here,” said Lindsay Owens, executive director of the Groundwork Collaborative, recalling the 2017 tax debate.
Trump’s first term was marked by the tax cuts approved by Republicans in Congress and enacted only after their initial campaign promise to “repeal and replace” Democratic President Barack Obama’s health care law stalled, ending with the famed ” Thumbs down” vote failed until then Senator. John McCain, R-Arizona.
The GOP majority in Congress quickly decided on tax cuts and put together and approved the billion-dollar package by the end of the year.
Since Trump signed these cuts, the gigantic benefits have gone to higher-income households. According to the Tax Policy Center and other groups, the top 1 percent — those earning nearly $1 million and above — received an income tax cut of about $60,000, while those with lower incomes received just a few hundred dollars. received dollars. Some people ended up paying about the same.
“The big economic story in the United States is rising income equality,” Owens said. “And interestingly enough, this is actually a tax story.”
In preparation for Trump’s return, Republicans in Congress have been meeting privately and with the president-elect for months to discuss proposals to extend and improve those tax breaks, some of which would otherwise expire in 2025.
That means maintaining different tax brackets and a single deduction for single earners, along with existing rates for so-called “pass-through businesses” such as law firms, medical practices or companies that count their income as individual income.
Normally, the price of the tax cuts would be prohibitive. The Congressional Budget Office estimates that keeping the expiring provisions in place would add about $4 trillion to the deficit over a decade.
Additionally, Trump wants to include his own priorities in the tax package, including cutting the corporate tax rate, which has been 21% since the 2017 law, to 15% and eliminating individual taxes on tips and overtime pay.
But Avik Roy, president of the Foundation for Research on Equal Opportunity, said it was “simply nonsense” to blame the tax cuts for the country’s income inequality because taxpayers up and down the income ladder have benefited. He points instead to other factors, including the Federal Reserve’s historically low interest rates, which make inexpensive borrowing possible, even for the affluent.
“Americans don’t care if Elon Musk is rich,” Roy said. “What they care about is: What are you doing to make their lives better?”
Typically, lawmakers want the costs of a policy change to be offset by budget revenues or cuts elsewhere. But in this case, there are almost no agreed revenue increases or spending cuts in the $6 trillion annual budget that could cover such a huge price tag.
Instead, some Republicans have argued that the tax breaks are paid for by the trickle-down revenue from potential economic growth. Tariffs introduced by Trump last week could provide another source of revenue.
Some Republicans argue there is precedent for simply extending the tax cuts without offsetting the costs because they are not fresh changes but rather existing federal policy.
“If you just extend current law, we’re not raising or lowering taxes,” Sen. Mike Crapo, R-Idaho, the fresh chairman of the Senate Finance Committee, said on Fox News.
He said criticism that tax cuts would raise the deficit was “ridiculous.” There’s a difference between taxes and spending, he said, “and we just need to get that message across to America.”
At the same time, the fresh Congress will also consider spending cuts, particularly in food stamps and health care programs, goals long sought by conservatives as part of the annual appropriations process.
One cut will almost certainly be to the COVID-19-era subsidy that helps cover the cost of health insurance for people who buy their own policies through the Affordable Care Act exchange.
The additional health care subsidies were extended through 2025 in Democratic President Joe Biden’s Inflation Reduction Act, which also includes various green energy tax breaks that Republicans want to roll back.
House Democratic leader Rep. Hakeem Jeffries of New York scoffed at Republicans’ claim that they had won “a big, massive mandate” — even though House Democrats and Republicans fought an essentially draw in the November election. with the GOP winning a narrow majority.
“This idea of a mandate to make massive, far-right policy changes doesn’t exist — it doesn’t exist,” Jeffries said.
Republicans plan to apply a budget process called reconciliation that allows for majority passage in Congress, essentially along party lines, without the threat of a filibuster in the Senate that can stop a bill from passing unless 60 of the 100 senators agree.
It’s the same process Democrats used when they had the power in Washington to pass the Inflation Reduction Act and Obama’s health care law despite Republican objections.
Republicans have been here before with Trump and control of Congress, which is no guarantee they can achieve their goals, especially given Democratic opposition.
Still, House Speaker Mike Johnson, R-La., who has worked closely with Trump on the agenda, promised a “breakneck” pace in the first 100 days “because we have a lot to fix.”
