US Senate Republicans Approve Trump Tax, Spending Cuts: A budgetary blueprint that extends trillions of dollars from President Donald Trump’s 2017 tax breaks and cuts government spending has been approved by the Republican-controlled upper house of Congress.
The US Senate has approved a budgetary blueprint that will extend trillions of dollars from ‘President Donald Trump‘s 2017 tax breaks’ and cut government spending.
The Republican-controlled upper house of Congress passed the framework by 51 votes to 48, with two dissensions from prominent Republican senators Susan Collins of Maine and Rand Paul of Kentucky.
The United States Senate is one of the two chambers in the US Congress, with 100 members serving six-year terms.
The Senate has equal powers to the House of Representatives and plays a crucial role in shaping federal laws.
The chamber's composition is based on state populations, with each state having at least two senators.
The Senate also has significant influence over presidential appointments, including Supreme Court justices and federal judges.
Tax breaks are temporary reductions in tax liability, often provided by governments to incentivize specific behaviors or investments.
They can be applied to individuals or businesses and may include deductions, credits, or exemptions from taxes.
According to the Internal Revenue Service (IRS), tax breaks can be used for charitable donations, mortgage interest payments, and education expenses.
In 2020, the Tax Cuts and Jobs Act provided an estimated $1.5 trillion in tax savings over a decade, primarily benefiting high-income earners.
Tax Breaks and Spending Cuts
The approval will allow the GOP to pass tax cuts through both congressional chambers, without having to rely on votes from the opposition Democratic Party.
The bill comes amid recent economic turmoil in the US caused by ‘Trump’s imposition of tariffs on the country’s trading partners.’
Analysts estimate that the budget framework will add around $5.7 trillion (5.2 trillion euros) to the US government’s debt in the coming 10 years, although Republicans argued it will cost $1.5 trillion.
Tax cuts refer to reductions in tax rates or exemptions from taxation.
They are often implemented by governments to stimulate economic growth, increase consumer spending, and boost business investment.
A key aspect of 'tax cuts' is the potential impact on government revenue, which can lead to budget deficits if not properly managed.
Historical examples of tax cuts include the 1981 Economic Recovery Tax Act in the United States and the 2010 UK Coalition Government's reduction in income tax rates.
The bill also seeks to raise the government’s debt ceiling by $5 trillion, which Congress has to approve before the summer recess to avoid defaulting on $36.6 trillion worth of debt.
Senior Republicans and Democrats have made competing claims about the impact of the bill.
Republican Senate Budget Committee Chairman Lindsey Graham claimed that allowing ‘Trump’s 2017 cuts’ to expire would mean a 22% tax increase for the average taxpayer, while Democrats accused Republicans of sacrificing crucial welfare programs to help pay for massive tax breaks that they say will disproportionately benefit the country’s wealthiest citizens.
Global Markets and Economic Impact
Trump’s tariffs plan has spooked global markets, with analysts warning of a possible recession and rising costs for American consumers.
The tariffs — which are taxes on foreign goods imported to the US — have sent global markets tumbling.
