Amid Tax Day, Congress Reshapes Federal Budget

Tuesday, April 15, is Tax Day in the U.S., and is the tax filing and payment deadline for all individuals owing taxes to the federal government.

Every person in the country goes through the same grueling process of stating income, poring over finances and ensuring everything is correct and in order.

However, Congress is expected to fully unveil a new government budget and potential tax cuts along with it, reshaping the nation’s multi-trillion-dollar financial plan.

Republicans introduced the budget bill, aiming to reduce government spending, further President Trump’s legislative agenda and possibly extend the 2017 Trump tax cuts.

“Lawmakers want to make the 2017 Tax Cuts and Jobs Act permanent, extending lower income tax rates for individuals and corporations and a higher exemption from the estate tax.

“Trump also wants to create new tax breaks, such as eliminating tax on overtime, tips and Social Security benefits. He campaigned for the White House in 2024 on ending taxes on tips and highlighted the promise during visits in critical battleground states with major service economies like Nevada,” according to USA Today.

On top of future tax changes, the bill also included spending cuts to cut down on federal overspending, echoing the White House’s mission to right the national debt.

The package turned out to be a compromise after House Republicans initially stalled, claiming the Senate-drafted bill failed to cut down on enough spending, with only $4 billion in total cuts.

House GOP members wanted around $1.5 trillion in spending cuts, but ultimately caved after both Speaker Johnson and Senate Majority Leader Thune clarified the initial $4 billion acted as a minimum, not a maximum.

“And the tax cuts are only half the equation. Conservatives in the House gave the budget plan the final votes needed for passage Thursday after they said they received assurances from leadership in both chambers that they would work to have a final product with at least $1.5 trillion in spending cuts — forcing changes to federal programs including Medicaid that could prove hard for some in the party to support,” according to the Associated Press.

The main concern is that, although tax breaks stimulate the economy, if not backed by adequate spending cuts, those breaks can bloat debt, especially for the government.

“A recent estimate from the Joint Committee on Taxation projects that extending the 2017 tax breaks will add $5.5 trillion over the next decade when including interest, and $4.6 trillion not including interest. On top of that, adding Trump’s campaign promises would swell the price tag to $7 trillion,” according to the Associated Press.

The Trump administration also partly addressed this issue, as President Trump wishes to resurrect tariffs to the forefront of the Oval Office’s drawer of leverage tools, similar to President William McKinley’s history of tariff usage to protect domestic industry, in the late 19th century.

“Those tax cuts, if passed, would further increase US government debt. The White House has said that money collected through tariffs will help plug the gap, however that plan is far from certain as Trump’s tariff plans continue to evolve with changing rates and dates for taking effect,” according to the BBC.

While Congress continues to hash out the details and talk about officially raising the debt ceiling and increasing federal borrowing, it does seem likely that tax breaks for Americans are on the horizon.

Despite some rocky financial waters, the federal government looks to be, at the least, trying to address our deficit spending, one small step at a time.

Click here to read about the contents of the Senate-authored budget bill for FY 2025.