The U.S. Capitol building viewed through the bars of standard barricades in Washington, U.S., April 4, 2025.
Leah Millis | Reuters
The U.S. Senate approved a Republican budget blueprint early on Saturday that aims to extend trillions of dollars worth of President Donald Trump’s 2017 tax cuts and sharply reduce government spending.
The vote, following an all-night legislative session, unlocks a maneuver that will allow Republicans to bypass the Senate’s filibuster and pass the tax cuts later this year without Democratic votes.
Non-partisan analysts say the measure, if enacted, would add about $5.7 trillion to the federal government’s debt over the next decade. Senate Republicans contend the cost is $1.5 trillion, saying that the effects of extending existing tax policy that was scheduled to expire at the end of this year should not be counted in the measure’s cost.
The measure also aims to raise the federal government’s debt ceiling by $5 trillion, a move Congress has to make by summer or risk defaulting on $36.6 trillion in debt. It aims to partly offset the deficit-raising costs of tax cuts by cutting spending. Democrats have warned that Republican targets would imperil the Medicaid health insurance program for low-income Americans.
Republican Senate Budget Committee Chairman Lindsey Graham, of South Carolina, warned that allowing the 2017 tax cuts to expire would hit Americans hard.
“The average taxpayer would see a 22% tax hike. A family of four making $80,610, the median income in the United States, would see a $1,695 tax increase,” Graham said. The 2017 cuts, Trump’s signature legislative achievement in his first term, cut the top corporate tax cut to 21% from 35%, a move that is not set to expire.
The balance of the cuts, for individual Americans, were set to expire, a decision made to limit the 2017 bill’s deficit-raising effects.
“The Republican bill that now sits before the Senate is poison,” Senate Democratic Leader Chuck Schumer, of New York, said on Friday. “But as Americans learn that Republicans are doing it simply to give tax cuts to the ultra-rich, an electric shock is going to go through the American people.”
Brutal sell-off
Hanging over the debate, which began late on Thursday, was a brutal stock market sell-off following Trump’s sweeping new trade tariffs, which economists warned will drive up prices and could trigger a recession.
Democrats offered dozens of amendments on matters ranging from protecting Social Security retirement benefits to shielding care for veterans. They were mainly blocked by Republicans.
It is now up to the House to debate and possibly tinker with this complicated measure.
Several hours into Friday’s debate, Senator Rand Paul of Kentucky — a rare Republican opponent of the measure — summarized the feelings of conservative deficit hawks.
“On the one hand, it appears as if all this great savings is happening. But on the other hand, the resolution before us will increase the debt by $5 trillion. So, which is it? Are we cutting spending or are we expanding the debt?”
There likely will be spending cuts by the time the dust settles, as bills are passed to enforce the budget plan. The most controversial one, arguably, would be if Republicans end up including $880 billion in cuts to Medicaid.
That, said independent Senator Bernie Sanders of Vermont who caucuses with the Democrats, “would make a bad situation worse by throwing millions of kids off the health care that they have.”
Republicans have maintained that Medicaid would not be cut. Instead, they say they would achieve savings by making the program more efficient.
If House Republicans get their way, there could be net spending cuts in the range of $2 trillion.
The budget blueprint would also make room for increased security measures at the southwest border with Mexico and administration efforts to significantly ramp up immigrant deportations.
