House Passes Senate Budget Framework that Extends 2017 Tax Cuts

Passage by both chambers is a critical step in the process for budget reconciliation legislation.

The House of Representatives passed its budget resolution 216-214 on April 10, 2025, following Senate passage of the resolution last week. The bill would implement a major part of President Donald Trump’s agenda by allowing up to $5.5 trillion in net tax cuts over 10 years ($4 trillion for the extension of the TCJA and $1.5 trillion for additional tax cuts), increasing spending on border security and military, and cutting other spending by at least $1.5 trillion rather than the $4 billion originally proposed in the Senate resolution. The framework would also increase the debt ceiling by up to $5 trillion.

House passage of the Senate plan is a critical step in the reconciliation process, which requires both chambers to agree on a budget framework of revenue and spending targets before passing a detailed bill. The House and Senate each pursued their own bill, and the Senate budget plan resulted from a compromise between party leaders.

Republican House leaders had to overcome party divisions to gain support for the plan, as conservative Republicans had opposed the bill over concerns that it would increase the national debt. This faction largely supported the resolution, however, as Republican representatives Thomas Massie of Kentucky and Victoria Spartz of Indiana were the only Republicans who voted against it. All Democrats in voted against the resolution, arguing that it would result in cuts for such programs as Medicaid and other social services for low-income families.

Passing a budget framework is considered an easy part of the process, and passage of the actual legislation is likely to be much more difficult. The House Ways and Means Committee is expected to propose tax legislation in early May with Memorial Day as the target date for passing the reconciliation bill. The legislation will include extension of the tax cuts from the Tax Cuts and Jobs Act and Trump’s proposed tax cuts. This includes:

· Reducing the corporate tax rate from 21% to 20% and from 21% to 15% for companies that make their product in the United States;

• Excluding tips from taxation;

• Eliminating or raising the $10,000 limit on state and local tax deductions;

• Excluding overtime pay from taxation;

• Excluding social security benefits from taxation;

• Ending taxation of U.S. citizens living in abroad;

• Increasing child tax credit;

• Reducing taxes on capital gains and dividends.

Trump also reportedly told Republican senators that he is open to raising tax rates on some of the highest-earning taxpayers, according to Semafor.