A tax break for millionaires and nearly everyone else.
End the COVID-19-era government subsidies that some Americans used to buy health insurance.
Food stamps and other safety net programs are subject to limits, including those for women and children. Green energy programs from the Biden administration are being rolled back. Massive deportations. Government job cuts will “drain the swamp.”
After winning the election and sweeping to power, Republicans are planning an ambitious 100-day agenda with President-elect Donald Trump in the White House and GOP lawmakers in a congressional majority to achieve their policy objectives.
The plan to renew approximately $4 trillion in expiring GOP tax cuts, a signature domestic achievement of Trump’s first term and an issue that may define his return to the White House, ranks first on the list.
“What we’re focused on right now is being ready, Day 1,” said House Majority Leader Steve Scalise, R-La., following a recent meeting with GOP colleagues to map out the road ahead.
The policies emerging will reignite long-running debates about America’s priorities, its widening income disparities, and the proper size and scope of its government, particularly in light of rising federal deficits, which are now approaching $2 trillion per year.
The discussions will put Trump and his Republican allies to the test of achieving the kinds of real-world outcomes that voters desired, needed, or supported when they 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, referring to the 2017 tax debate.
Trump’s first term was defined by those tax cuts, which were approved by Republicans in Congress and signed into law only after their initial campaign promise to “repeal and replace” Democratic President Barack Obama’s health-care law fizzled, failing with the famous thumbs-down vote by then-Sen. John McCain, R-Ariz.
The Republican majority in Congress quickly shifted to tax cuts, assembling and passing the multitrillion-dollar package by the end of the year.
Since Trump signed the cuts into law, higher-income households have reaped the most benefits. According to the Tax Policy Center and other groups, the top one percent — those earning nearly $1 million or more — received an income tax cut of around $60,000, while those with lower incomes received as little as a few hundred dollars. Some people ended up paying roughly the same.
“The big economic story in the U.S. is soaring income inequality,” Owens told reporters. “And that is actually, interestingly, a tax story.”
Republicans in Congress have been meeting privately for months, as well as with the president-elect, to discuss proposals to extend and improve tax breaks, some of which would otherwise expire in 2025.
That includes maintaining various tax brackets and a standardized deduction for individual earners, as well as the current rates for so-called pass-through entities such as law firms, doctors’ offices, and businesses that report their earnings as individual income.
Typically, tax cuts would be prohibitively expensive. The Congressional Budget Office estimates that keeping the expiring provisions in place would add $4 trillion to deficits over ten years.
In addition, Trump wants to include his own priorities in the tax package, such as lowering the corporate rate from 21% in 2017 to 15%, as well as eliminating individual taxes on tips and overtime pay.
But Avik Roy, president of the Foundation for Research on Equal Opportunity, said blaming tax cuts for the nation’s income inequality is “just nonsense” because tax filers at all income levels benefited. He instead cites other factors, such as the Federal Reserve’s historically low interest rates, which allow for low-cost borrowing, including by the wealthy.
“Americans don’t care if Elon Musk is rich,” Roy told me. “What they care about is, what are you doing to make their lives better?”
Typically, lawmakers want to offset the cost of a policy change with budget revenue or cuts elsewhere. However, there are almost no agreed-upon revenue increases or spending cuts in the annual $6 trillion budget to cover such a massive cost.
Instead, some Republicans argue that the tax cuts will pay for themselves through the trickle-down effect of potential economic growth. Trump’s tariffs, which were proposed last week, could provide another source of offset revenue.
Some Republicans argue that there is precedent for simply extending tax cuts without offsetting the costs because they are not new changes, but rather existing federal policy.
“If you’re just extending current law, we’re not raising or lowering taxes,” said Sen. Mike Crapo, R-Idaho, the new chairman of the Senate Finance Committee, on Fox News.
He called the criticism that tax cuts would increase the deficit “ridiculous.” “There is a difference between taxes and spending,” he said, “and we just have to get that message out to America.”
At the same time, the new Congress will be considering spending cuts, particularly in food stamps and health-care programs, which conservatives have long sought as part of the annual appropriations process.
One cut is almost certain to be made to the COVID-19-era subsidy that helps people pay for their own health insurance through the Affordable Care Act exchange.
The additional health-care subsidies were extended through 2025 under Democratic President Joe Biden’s Inflation Reduction Act, which also includes a number of green energy tax breaks that Republicans want to repeal.
Rep. Hakeem Jeffries of New York, the House Democratic leader, scoffed at the Republican claim that they had won “some big, massive mandate” — despite the fact that the House Democrats and Republicans fought to a tie in the November election, with the GOP eking out a narrow majority.
“This notion about some mandate to make massive, far-right extreme policy changes, it doesn’t exist — it doesn’t exist,” Jeffries told CNN.
Republicans intend to use reconciliation, a budgetary process that allows for majority passage in Congress, essentially along party lines, without the threat of a filibuster in the Senate, which can stall a bill’s advancement 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 opposition.
Republicans have been here before with Trump and control of Congress, but that doesn’t guarantee they’ll be able to achieve their goals, especially given Democratic opposition.
Still, House Speaker Mike Johnson, R-La., who has been collaborating closely with Trump on the agenda, has promised a “breakneck” pace in the first 100 days “because we have a lot to fix.”