The federal government has already run up $1.1 trillion in deficit spending for Fiscal Year 2025, and the federal budget deficit is likely to rise to at least $1.9 trillion by the end of the fiscal year.
Yet Congress, backed by President Trump, is preparing to increase the budget deficit further, by cutting taxes while failing to cut government spending. Congress is preparing to add $1.5 trillion in new tax cuts over the next decade, and also extend $3.8 trillion tax cuts that were about the expire. Meanwhile, it is planning to spend $517 billion more over the next decade on the military and immigration enforcement, while identifying only $4 billion in spending cuts elsewhere. So the annual budget deficit will likely rise by about $200 billion from where it is now, adding $2 trillion in new red ink over the next decade.
“GOP senators passed the most astonishingly irresponsible budget resolution ever: $5.3 trillion in permanent tax cuts. $517 billion net spending hikes. A new budget trick that would also allow Democrats to pass unlimited spending hikes,” notes economist Jessica Riedl of the conservative Manhattan Institute.
But on Thursday, the House of Representatives went along with the Senate, adopting its irresponsible budget framework after the Senate Majority Leader stated that the Senate will try to come up with additional unspecified budget cuts (of $1.5 trillion over a decade) to partly offset the increased budget deficits resulting from the senate’s plan. The Senate is unlikely to come up with many such cuts, because cutting spending on most government programs is unpopular (even programs that ought to be cut).
As NPR notes, the House vote on Thursday was
a victory for Trump and congressional Republican leaders who spent days convincing fiscal hawks within the Republican Party to vote for the bill despite their frustration over the level of spending cuts included in the Senate version of the plan that was adopted on Saturday. The Senate framework outlines only about $4 billion in spending cuts. The House version seeks at least $1.5 trillion.
Now that Republicans have adopted identical versions of the framework in the House and Senate, they are able to unlock a special budget tool known as reconciliation — a complicated process that allows them to avoid a filibuster in Senate and pass a final version of the legislation with a 51-vote simple majority.
Earlier, economists Romina Boccia and Dominik Lett urged the House to reject the Senate’s plan and stick to its own earlier plan requiring $2 trillion in net budget cuts over a decade. “On April 5, the Senate approved a modified budget framework, which is a betrayal of the House’s [earlier] more responsible fiscal stance [mandating $2 trillion in budget cuts to non-military programs]. The Senate’s strategy is clear. They want to jam House Republicans with a massive debt-financed tax package with zero substantive offsets. The Senate’s budget resolution replaces the House’s $2 trillion in concrete spending reductions with $4 billion in spending cut instructions, adds $221 billion in new spending, and sets a dangerous precedent by adopting a scoring baseline that hides at least $5 trillion in deficit-increasing tax cuts. House Republicans should call out the Senate’s strategy for what it is—a blatant attempt to abandon any semblance of fiscal sanity.”
