Republican tax and spending bill set for full House vote. What does this mean for the US economy?
The U.S. House of Representatives is tipped to hold a pre-dawn vote on Trump’s “big, beautiful” budget bill, with Republicans in power in the chamber hoping to overcome days of internal disagreements over the measure.
The U.S. House Rules Committee on late Wednesday approved President Donald Trump’s expansive tax and spending bill after a nearly 22-hour session, media reports showed, setting the stage for a full House vote as early as Thursday.
Along with the extension of 2017 tax cuts, the legislation would slash taxes charged on tips and car loans, while boosting spending on defense and border security. Reductions to key food and health programs for low-income Americans are also included in the bill.
Still, it remained uncertain if House Speaker Mike Johnson had secured enough Republcian support to pass the bill. Some GOP lawmakers have demanded even greater spending cuts to offset Trump’s desired tax breaks, although Johnson said he was confident he could secure their backing to overcome united Democratic opposition.
Writing in a note to clients, analysts at Wolfe Research said Republican dissenters to the bill have received “most” of the concessions they have been demanding, including “very aggressive” slashes to federal tax credits for investment in renewable energy technologies.
Should the bill pass the House, it would go to the Senate, which is also controlled by Republicans.
Critics have expressed concerns over potential cuts to social programs and increased national debt. Nonpartisan analysts have estimated that the reductions could add between $3 trillion to $5 trillion to the country’s $36.2 trillion debt pile over the next decade.
A Financial Times report stated that the International Monetary Fund has urged the U.S. to address its large fiscal deficits and escalating debt.
Credit rating agency Moody’s recently downgraded the U.S. sovereign credit rating, citing the failure of successive governments and Congress to implement measures to reduce fiscal deficits and interest costs.