Earlier this week, the House of Representatives passed a federal budget resolution constructed by GOP representatives on a 217-215 majority. All Democrats and one Republican voted in opposition. Representatives strictly crafted an outlined resolution, they did NOT vote on budget legislation. The House resolution merely suggests what the majority of representatives believe ought to be considered for the federal budget. The Senate will soon take the resolution and deliberate what sort of detailed plan ought to be voted upon to become the established federal budget for the next fiscal year (FY). A new spending bill is needed before March 14th to avoid a government shutdown.
WHAT DOES THE RESOLUTION SUGGEST?
At the forefront, the proposed resolution vouches for $4.5 trillion in tax cuts and $2 trillion in spending cuts. Near the bottom of the resolution text (source hyperlinked at the end), it also suggests that the country’s statutory debt ceiling be increased by $4 trillion. The national debt is currently nearing $40 trillion. The document says under Title IV sect. 4001,
“The rate of economic growth has a significant impact on budget deficits. When the rate of the Gross Domestic Product (GDP) increases, projected revenue grows with it and deficits decline.”
Even with this publicized consideration of deficit rates, many are concerned that any legislation that enforces the proposed resolution would exacerbate rather than decrease said deficits. Representative Thomas Massie of Kentucky, who was the only Republican to vote against the resolution said much of the same as NPR reports.
The document text specifies the following committees that will be charged with cutting large amounts of spending for FY 2026-2034: The Committees of Agriculture, the Armed Services, Education & Workforce, Energy & Commerce, Financial Services, Homeland Security, Judiciary, Natural Resources, Oversight Government Reform, Transportation & Infrastructure, Ways & Means. Among another list, supporting representatives suggested that there should be a recommended level and amount for federal revenues, new budget authority, budget outlays, deficits, etc.
As a whole, the resolution aims to address national defense, energy, immigration and tax policy which are hot topics in the country. There are specific cuts that have been highlighted on many news sites – $880 billion in the Energy & Commerce Committee, $230 billion in the Agricultural Committee and $330 billion in the Education & Workforce Committee. Pertaining to the proposed cuts for the Energy & Commerce Committee, the majority of opposition is concerned about what this will mean for Medicaid spending that provides 72 million Americans with healthcare.
In an article published by AP News, GOP leaders stated that cuts to Medicaid were not specifically listed in the resolution.
WHAT ARE THE RESPONSES?
President Donald Trump has voiced support of the resolution, promoting his eagerness to cut spending across many federal programs and services. Jodey Arrington, the Republican Chairman of the House Budget Committee has said this proposal will accumulate $2.6 trillion in projected savings over the next decade. Jason Smith, Chairman of the U.S. House Committee on Ways & Means stated that this resolution will offer tax relief to American workers, small businesses and families. He goes so far as to report that “the average taxpayer will see a 22% tax hike if Congress fails to act.”
House Democrat Leader Hakeem Jefferies stated that “life as a country is under assault” in response to the passed resolution. The president of the Center on Budget Policy Priorities, Sharon Parrott, published a more detailed stance of opposition to the resolution – calling out massive cuts to health coverage, and huge tax giveaways for wealthy households and businesses.
Parrott writes that the math presented within the resolution will result in an annual tax cut that averages $62,000 for households receiving an annual income of $743,000. She further lists three harmful impacts if the Senate passes legislation that carries out the resolution: First, there will be enormous cost shifts to state, local and tribal governments; Second, the resolution does not extend tax cuts to people drawing from the Affordable Care Act (ACA) tax credits; Third, the national debt will ultimately increase.
[Note from the author – At the bottom of the piece from the Center on Budget Policy Priorities it reads “The CBPP is a nonprofit, nonpartisan research organization and policy institute that conducts research and analysis on a range of government policies and programs.” There is nothing that starkly suggests that Parrott’s statement as president of the organization has undermined the CBPP’s claim to nonpartisanship, though portions of rhetoric surrounding the mathematical analysis triggered my curiosity. It is worthy to note that I have yet to come across additional sources that profess the same analysis.]
WHAT NOW?
Speaker Mike Johnson responded after the passing of the resolution to say that legislation needed to carry out the resolution will come later, given that the Senate is now tasked with reviewing the proposal.
Politico reports that the Senate has already begun discussions and have considered the following adjustments: making Trump tax cuts formerly implemented in 2017 permanent, retracting some of the House’s deep spending cuts, and removing the provision to raise the debt ceiling.
The U.S. House & Senate must adopt the same budget resolution before legislation may be established. They have until March 14th.
Is the GOP resolution another form of trickle-down economics? Will the proposed tax cuts only serve wealthy households? How will this effect school districts, teachers, farmers, etc.? Do the proposed benefits outweigh the costs? That is for you to decide.
RESEARCH:
Bipartisan Policy
NPR
AP News
House Committee on Ways & Means
Washington Post
LA Times
Politico
The Center on Budget and Policy Priorities
Budget Committee