Congress
A delay in GOP’s tax plans could push up costs by hundreds of billions
The price of extending Republicans’ tax cuts will surge by hundreds of billions of dollars if lawmakers dawdle, new government figures show.
The Treasury Department released numbers Friday showing that rolling over all of the soon-to-lapse provisions, as well as undoing other reductions in business benefits that were triggered by the 2017 law, would cost $5.5 trillion — substantially more than the $4 trillion the Congressional Budget Office has projected.
There’s a number of reasons why Treasury’s price tag is much higher but a big one is that its analysis begins in 2026, not 2025, like CBO’s.
That may not sound like a big deal, but when budget analysts estimate the price of legislation, they look at the anticipated expenses over a decade, and it makes a huge difference when the cost-counting clock starts.
Right now, the government is in its 2025 fiscal year, and so analysts look at years 2025 through 2034 — and expenses in 2025 are minimal because Republicans’ tax cuts are still on the books. About 40 provisions are due to expire at the end of the year.
But when the new fiscal year begins Oct. 1, analysts will begin tallying up costs between 2026 and 2035, as Treasury happened to do in its in analysis. That means the very cheap year of 2025 will fall out of the picture, and the very expensive year of 2035 — when costs are expected to run $600 billion — will suddenly be included.
House Speaker Mike Johnson (R-La.) has said he wants to get a bill including the tax provisions on President-elect Donald Trump’s desk by the end of April — an ambitious timeline given the size of the package and Congress’ tendency to dawdle. Some tax vets now expect lawmakers to take until their August recess to wrap up their plans, if not longer.
Republicans are off to a slow start, with lawmakers bogged down in an extended and so far unresolved debate over whether to tackle immigration first and put off taxes until later or combine them into a single bill.
The House and Senate intend to go their own ways, with competing approaches, which amounts to postponing critical decisions, like how much to spend on a tax bill, that have to be resolved before they can use the “reconciliation” procedure they’re depending on to get their plans through the balky Senate.
Treasury wasn’t trying to warn Republicans of the cost of delay; it was examining the cost and the biggest winners of renewing the provisions. Not surprisingly, the analysis says the super-rich would see the biggest benefits, with the top 0.1 percent reaping a 4.2 percent increase in their after-tax incomes compared to the roughly 1.2 percent increase for those in the middle of the income spectrum.
CBO is expected to release next week its own revised estimates of the cost of extending the provisions.
Last year, it put the price at $4 trillion or $4.6 trillion, including increased debt service.
It’s not like Congress to work far ahead of schedule, but had lawmakers taken up the extension of the Tax Cuts and Jobs Act in 2023, the price would have been easier to swallow. CBO pegged the cost then at a comparatively paltry $3 trillion, or $3.45 trillion including interest expense — because its estimate then included not just one but two cheap years, 2024 and 2025.
Senate GOP leaders have canceled plans to vote this week on a party-line immigration enforcement bill, a major setback as lawmakers contend with President Donald Trump’s personal political agenda.
Several Republican senators said action on the legislation would wait until after a weeklong Memorial Day recess — guaranteeing that Congress would blow a Trump-set June 1 deadline for the immigration funding.
The decision appeared to be driven by fierce internal divides over politically sensitive issues not related to the core purpose of the bill — pumping tens of billions of dollars into Immigration and Customs Enforcement and other agencies.
It came after Acting Attorney General Todd Blanche struggled Thursday to quash GOP concerns over a newly announced $1.8 billion “anti-weaponization” fund. Leaders had already concluded they would have to omit a $1 billion Secret Service funding line item that could have gone toward Trump’s White House ballroom due to internal dissension.
Blanche met privately with Senate Republicans as the administration and GOP leaders tried to defuse the controversy over the fund.
GOP leaders believed they had enough members who would support a proposal targeting the fund that it would ultimately be added into the filibuster-skirting bill, as Blue Light News first reported Wednesday.
Asked if the briefing changed her mind, Sen. Susan Collins (R-Maine), a critic of the fund, told reporters, “No.”
Sens. Bill Cassidy (R-La.) and Lisa Murkowski (R-Alaska) — who have also been critical of the fund — declined to comment. But two people granted anonymity to describe the meeting said the meeting did not go well for the administration and that Blanche was not persuasive.
Money for the fund isn’t included in the GOP’s immigration enforcement bill. But because the bill involves Justice Department funding and the Senate Judiciary Committee is involved in the bill, senators have a path to add language related to the fund into the bill with only 51 votes. Republicans did discuss possible guardrails they could put on the fund during the meeting.
Republicans have not yet finalized the bill they plan to put on the Senate floor, raising the possibility that the chamber could punt action until after a weeklong Memorial Day recess. Senate leaders could have attendance issues if they try to keep members in town past Friday afternoon.
Asked if they could still vote on the bill this week, Sen. John Boozman (R-Ark.) told reporters, “That’s being discussed.”
Sen. Rand Paul (R-Ky.) told reporters after leaving the meeting that leaders would likely decide “within the next hour or so” about whether to send members home and reconvene after the recess.
Senate Majority Leader John Thune declined to comment on the fund or on the ability to pass a bill this week as he left the meeting.
Rep. Andrew Clyde said in an interview Thursday he supports the DOJ’s new, $1.8 billion “anti-weaponization” fund — and isn’t ruling out seeking money from the account for himself.
The Georgia Republican said the goal of the fund is to “make whole” anyone who has been unfairly targeted by the government, including people who rioted at the Capitol on Jan. 6, 2021. Pressed on whether he would personally pursue compensation, he reiterated that the fund is for “anyone” who has been the victim of government weaponization.
Clyde has, in the past, argued he’s been targeted by the IRS, and was subject to civil asset forfeiture nearing $1 million. Clyde fought the IRS in court and recouped a large amount of the money, but says he still has legal fees.
Acting Attorney General Todd Blanche struggled Thursday to quash GOP concerns over a newly announced $1.8 billion “anti-weaponization” fund.
Blanche met privately with Senate Republicans as the administration and GOP leaders try to defuse a controversy that is complicating their push to quickly advance an immigration enforcement bill.
GOP leaders believe they have enough members who would support a proposal targeting the fund that it would ultimately be added into the filibuster-skirting bill, as POLITICO first reported Wednesday.
Asked if the briefing changed her mind, Sen. Susan Collins (R-Maine), a critic of the fund, told reporters, “No.”
Sens. Bill Cassidy (R-La.) and Lisa Murkowski (R-Alaska) — who have also been critical of the fund — declined to comment. But two people granted anonymity to describe the meeting said the meeting did not go well for the administration and that Blanche was not persuasive.
Money for the fund isn’t included in the GOP’s immigration enforcement bill. But because the bill involves Justice Department funding and the Senate Judiciary Committee is involved in the bill, senators have a path to add language related to the fund into the bill with only 51 votes. Republicans did discuss possible guardrails they could put on the fund during the meeting.
Republicans have not yet finalized the bill they plan to put on the Senate floor, raising the possibility that the chamber could punt action until after a weeklong Memorial Day recess. Senate leaders could have attendance issues if they try to keep members in town past Friday afternoon.
Asked if they could still vote on the bill this week, Sen. John Boozman (R-Ark.) told reporters, “That’s being discussed.”
Sen. Rand Paul (R-Ky) told reporters after leaving the meeting that leaders would likely decide “within the next hour or so” about whether to send members home and reconvene after the recess.
Senate Majority Leader John Thune declined to comment on the fund or on the ability to pass a bill this week as he left the meeting.
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