Republicans Propose Extension of Trump Tax Cuts Amidst Democratic Opposition

• The 2017 tax cuts, enacted by President-elect Donald Trump, are being advocated for extension by House Republicans.
• By having full control of both Congress and the White House, Republicans can pass legislation through the "reconciliation" process, which eliminates the need for a filibuster.
• However, there's Democratic pushback amid concerns over the federal budget deficit.

Some House Republicans are urging for quick passage of the GOP's 2017 tax bill before President-elect Trump assumes office.

If Congress fails to act, numerous tax breaks will expire after 2025, including lower tax brackets, a more substantial child tax credit, and a 20% deduction for pass-through businesses. As a result, over 60% of taxpayers could face higher taxes in 2026 without extensions of provisions in the Tax Cuts and Jobs Act (TCJA), according to the Tax Foundation.

During a committee hearing on Tuesday, House Ways and Means Committee Chairman Jason Smith, R-Mo., stated that families and small businesses should not be left waiting for Congress to take action and provide tax relief at the last minute.

150,000 student loan borrowers received loan forgiveness from Biden in his final days in office.

By having full control of both Congress and the White House, Republicans can pass legislation through the "reconciliation" process, which eliminates the need for a filibuster.

As soon as possible, Smith urged making the Trump tax cuts permanent.

Some lawmakers have criticized the cost of extending Trump's expiring tax provisions, particularly amid concerns about the federal budget deficit.

The US Department of the Treasury reported on Tuesday that the three-month fiscal year 2025 deficit had increased to $710.9 billion in December, which was nearly 40% higher than the same period the previous year.

Some Democrats have criticized TCJA extensions, arguing that they primarily benefit the wealthy, not middle-class families.

"During the hearing, Richard Neal, D-Mass., stated that most of the tax cuts went to the top earners. He emphasized that the American people are struggling under the current tax plan and require relief."

The Treasury report last week estimated that extending Trump's expiring tax cuts for 10 years would cost approximately $4.2 trillion.

According to the report, the average family would save 2.2% of their after-tax income, while the top 0.1% of earners would receive a 4.2% reduction. This translates to an average annual savings of $2,000 for the average family and $314,000 for the highest 0.1% of earners, based on 2025 data.