Trump has begun another trade war. Here's a timeline of how we got here
Canada's leader laments lost friendship with US in town that sheltered stranded Americans after 9/11
Chinese EV giant BYD's fourth-quarter profit leaps 73%
You're an American in another land? Prepare to talk about the why and how of Trump 2.0
Chalk talk: Star power, top teams and No. 5 seeds headline the women's March Madness Sweet 16
Purdue returns to Sweet 16 with 76-62 win over McNeese in March Madness
By Bo Erickson
WASHINGTON (Reuters) -U.S. Senate Republicans are working to pass a budget measure that they need to extend President Donald Trump's 2017 tax cuts -- and potentially cut other taxes -- while bypassing the objections of the chamber's Democrats.
Nonpartisan analysts said the budget could add trillions to the federal government's $36.6 trillion in debt, and Democrats and advocates say the accompanying spending cuts could take a heavy toll on the Medicaid health plan for low-income Americans.
WHAT DO REPUBLICANS SAY THIS WILL COST?
The Republican Senate budget committee estimated the cost of extending the 2017 tax cuts, and new Trump ideas like eliminating tax on tips and Social Security retirement benefits, at $1.5 trillion over a decade.
This is much less than the Republican House of Representatives budget estimate at $4.5 trillion. That is because Senate Republicans are hoping to make an unprecedented budget argument that extending the tax cuts originally meant to expire at the end of this year would not increase federal spending because the temporary tax cuts are already in place.
When Congress first passed Trump's Tax Cuts and Jobs Act in 2017, Republicans argued that they would drive economic growth and help lower the deficit. A 2024 estimate by the nonpartisan Committee for a Responsible Federal Budget, or CRFB, found that they did not do that but rather added about $1.9 trillion to the debt.
WHAT DO NONPARTISAN ANALYSTS SAY ABOUT THIS PLAN?
The Bipartisan Policy Center estimates the new Senate plan allows for $5.7 trillion in deficit increases over a decade, which is more than $2 trillion in deficit increases compared to the House budget plan, by the Senate's use of calculating costs with the budget policy gimmick.
The CRFB think tank estimates the Senate plan allows for twice as much borrowing as the House's plan and only a decimal amount -- 0.2% -- of spending cuts and reforms.
It estimated that Trump's full agenda, including campaign-trail proposals to eliminate taxes on overtime, could cost $5 trillion to $11.2 trillion over a decade.
CONCERNS ABOUT MEDICAID
Democratic lawmakers and a growing number of Republicans are pushing back against some of the specific spending cut instructions embedded into the House budget plan, which directs the congressional committee that oversees Medicaid, the federal health program for low-income and disabled Americans, to cut about $880 billion in spending over the next decade.
The thinking goes that Republicans -- especially in the House -- cannot hit their spending decrease targets without touching some Medicaid benefits.
This is politically sensitive for a portion of Republicans who have more constituents using Medicaid.
ARE ALL OF THE 2017 TAX CUTS DUE TO EXPIRE?
The 2017 tax cuts, passed when Trump's Republicans also held majorities in both chambers of Congress, included some permanent changes. Most prominent among them was the lowering of the top corporate tax rate to 21% from 35%. That is not set to expire.
Some low- and middle-income Americans saw an increase in the standard deduction, as well as an increased child tax credit, but according to the Center for Strategic and International Studies, high-income taxpayers and businesses were the primary beneficiaries of the change.
(Reporting by Bo Erickson; Editing by Scott Malone and Alistair Bell)
