The U.S. Senate early Saturday morning passed a Republican-led budget resolution aimed at extending former President Donald Trump's 2017 tax cuts and raising the federal debt ceiling by $5 trillion, setting up a contentious fiscal showdown with the House and within the GOP itself.
The 51-48 vote, reached after a marathon overnight session, allows Senate Republicans to utilize reconciliation-a legislative tool that enables passage of certain fiscal policies without requiring support from Senate Democrats. The move marks a major step toward cementing more than $5 trillion in tax cuts, despite warnings from budget analysts that the measure could significantly expand the federal deficit.
"This resolution is the first step toward a final bill to make permanent the tax relief we implemented in 2017 and deliver a transformational investment in our border, national, and energy security," said Senate Majority Leader John Thune (R., S.D.) ahead of the vote.
The blueprint also authorizes an additional $1.5 trillion in new tax reductions while allocating $521 billion in discretionary spending for GOP policy goals, including:
- $175 billion for border security and immigration enforcement
- $150 billion for national defense initiatives
Republicans argue the plan will prevent automatic tax increases set to kick in when the individual provisions of the 2017 tax law expire at the end of this year. "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," said Senate Budget Committee Chairman Lindsey Graham (R., S.C.).
Democrats, however, blasted the resolution as a giveaway to wealthy Americans at the expense of essential social programs. "The Republican bill that now sits before the Senate is poison," said Senate Majority Leader Chuck Schumer (D., N.Y.). "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."
The nonpartisan Congressional Budget Office estimates the blueprint would add $5.7 trillion to the national debt over the next decade, despite Senate Republicans claiming the cost is closer to $1.5 trillion due to technical adjustments.
Senator Rand Paul (R., Ky.), a fiscal hawk, criticized the resolution from within his own party. "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?"
The House has passed its own version of a budget resolution, authorizing $4.5 trillion in tax cuts and proposing up to $1.5 trillion in spending reductions. Among those cuts is a directive for the House Energy and Commerce Committee to trim $880 billion, sparking concerns about deep reductions to Medicaid. Republicans maintain that savings will come from improving efficiency, not eliminating benefits.
Independent Senator Bernie Sanders of Vermont, who caucuses with Democrats, warned the Senate plan "would make a bad situation worse by throwing millions of kids off the health care that they have."
The Senate proposal also includes provisions to avert a potential debt ceiling crisis. Without raising the borrowing limit, the U.S. risks defaulting on its $36.6 trillion national debt by late summer. Economists caution that a default could trigger global financial instability.
