President Donald Trump’s Big Beautiful Budget Bill Moves Forward

The House of Representatives has passed a major budget plan that will help shape government spending and tax cuts for the next decade. The bill, known as H.Con.Res.14, was passed on February 25, 2025, by a close vote of 217 to 215. President Donald Trump pushed hard to get this bill approved because it is a crucial step in his plan to cut taxes and control spending.

Why This Bill Matters

This bill allows Congress to use a special process called “reconciliation.” Normally, most bills need 60 votes to pass in the Senate, but through reconciliation, some bills can pass with a simple majority. Since Republicans hold a 53-47 majority in the Senate, they are using this process to pass major financial changes without needing votes from the Democratic Party. Both parties have used this method in the past to pass big bills.

What is in the Bill?

Here is what the bill includes:

• $450 billion in tax cuts every year from 2025 to 2034, adding up to $4.5 trillion over ten years.
• Annual deficits (the amount the government spends beyond what it collects) ranging from $1.76 trillion to $2.23 trillion per fiscal year.
• Planned government spending for different federal agencies.
• An increase in the national debt limit of $4 trillion.
• Projected U.S. national debt to rise from $35.46 trillion on 10/1/2024 to $55.57 trillion by 9/30/2034, a total increase of about $20 trillion.

The bill also requires different committees to propose spending cuts by March 27, 2025. Here are the changes by committee:

• Cuts in spending:
  • Agriculture: $230 billion
  • Education and Workforce: $330 billion
  • Energy and Commerce: $880 billion
  • Financial Services: $1 billion
  • Natural Resources: $1 billion
  • Oversight and Government Reform: $50 billion
  • Transportation and Infrastructure: $10 billion
• Increased spending:
  • Armed Services: $100 billion
  • Homeland Security: $90 billion
  • Judiciary: $110 billion

The bill aims to cut $2 trillion in spending while allowing $4.5 trillion in tax cuts. However, if Congress cannot find the full $2 trillion in spending cuts, tax cuts will be reduced dollar-for-dollar to make up for the shortfall.

The Next Steps

Now, the Senate must approve the same budget numbers. If they make any changes, the bill will go back to the House for a new vote. Both the House and Senate must agree on the topline numbers and then pass actual bills with details.

The Tax Cut Challenge

One big question remains: Which taxes will be cut? While the bill approves tax cuts, it does not specify which taxes will be reduced. This will be decided in upcoming negotiations between Congress and President Trump, many of which will happen behind closed doors.

Here’s the challenge: The tax cuts President Trump wants cost around $8 trillion over ten years, but this bill only allows for $4.5 trillion in tax cuts. Some of the proposed tax cuts include:

• Extending the Tax Cuts and Jobs Act (TCJA) – $4.6 trillion
• Not taxing overtime pay – $300 billion
• Not taxing tips – $200 billion
• Lowering the corporate tax rate for U.S.-made products – $150 billion
• Removing the SALT cap – $1.2 trillion
• Ending taxes on Social Security income – $1.5 trillion

Since the total cost of these tax cuts is $3.5 trillion higher than what the bill allows, Congress will have to make tough choices.

What Could Happen Next?

No one knows exactly how this will play out, but here are the four most likely outcomes in my opinion:

1. All tax cuts are passed, but only for five or six years, then they expire.
2. Congress finds $5.5 trillion in spending cuts instead of $2 trillion, which would allow the tax cuts to last ten years. Some lawmakers who support a smaller government may push for this.
3. Nothing gets passed, since Republicans have only small majorities, and this process is exceedingly difficult.
4. A different compromise is reached.

President Trump’s Role

President Trump will need to use a lot of political pressure to make sure his tax cuts and budget plans move forward. Over the next few months, expect intense negotiations, debates, and changes to this bill before it is finalized.

This is a historic moment in U.S. tax and budget policy. Whatever happens, the decisions made now will affect the country’s economy for years to come. One thing I am sure of, President Trump will be involved and will push hard for the outcome he prefers!