Extra
New: When Will Congress Pass Trump’s Budget Bill?
b On May 9th, Treasury Secretary Bessent told Congress the US debt ceiling must be increased by mid-July. Congress has been focused on Trump’s “big, beautiful budget bill,” an omnibus bill including everything Trump wants plus a debt ceiling increase. On May 22nd the “big, beautiful budget bill” was voted out of the House by one vote. What’s next?
The Congressional calendar is daunting: The Senate is off the week of May 26th and then works for four weeks before taking the week of July 4th off. Then they work for four weeks before taking the month of August off.
Trump wants Congress to pass his “big, beautiful budget bill” by July 4th. That seems unlikely as the Senate is only in session for four weeks before that deadline. (The House is in session three weeks.) If things were going smoothly, the first three weeks of June would see Senate deliberations and the week of June 23rd joint hearings on the final bill. However, enough Republican Senators have expressed opposition to the budget bill the House passed that it seems unlikely there will be a reconciled bill by June 27th. ( https://www.cnn.com/2025/05/
The Senate and the House are on vacation the week of June 30th. That leaves the week of July 7th for Republicans to either pass Trump’s “big, beautiful budget bill” or pass a simpler bill raising the debt ceiling. Republicans are between the proverbial “rock and a hard place” because Senate Republicans don’t like the bill the House passed, and they will need the help of Democrats to raise the debt ceiling.
There are four areas of the “big, beautiful budget bill” that spawn controversy:
1.Taxes: Trump’s budget bill’s primary focus is making the “Trump tax cuts” permanent. The estimate of the cost of these tax cuts is $5 trillion. ( https://www.politico.com/
While Republicans have enough votes to pass the budget bill, there’s a wing of their caucus that demands the bill be deficit neutral. Therefore, Republicans need to find ways to offset the $5 trillion. House Republicans partially offset this by cutting Medicaid and other social safety net programs, but that still left a deficit of $3.8 trillion. Senators Johnson and Paul say that’s unacceptable.
The White House disputes the $3.8 trillion deficit estimate, explaining that’s based upon Congressional Budget Office (CBO) “static scoring.” The White house promotes “dynamic scoring” which claims that the “big, beautiful budget bill” will stimulate the economy creating additional tax revenue and does not increase the deficit.
Robert Reich calculates the “big, beautiful budget bill” will have this paradoxical impact: “Americans with incomes of less than $17,000 will lose more than $1,000 a year. But if you are among the top 0.1% of earners, you’re in luck: you’ll gain nearly $390,000 a year.”
The “big, beautiful budget bill” contains various specific tax cuts. For example, it would eliminate taxes on tips and overtime. It would make domestic car purchases a non-taxable event and increase the child tax credit. The “big, beautiful budget bill” also raises the deduction for state and local taxes.
2.New Spending: The “big, beautiful budget bill” includes $200 billion for mass deportation and border security and $150 for the Department of defense.
3.Program Cuts: To offset the $5 trillion hole created by the Trump tax cuts, Republicans focused on cuts to Medicaid. The CBO estimates that 9 million people will lose healthcare coverage because of provisions in the House bill. In addition, there’s a 30 percent cut to the Supplemental Nutritional Assistance Program (SNAP) that will impact the 40 million recipients. In addition, the CBO estimated the “big, beautiful budget bill” would add at least $ 2.3 trillion to the deficit, an amount large enough to trigger cuts to Medicare.
4.Ancillary Features: There are several items in the “big, beautiful budget bill” that have nothing to do with the budget, per se. For example, the House bill authorizes sale of part of the 600 MHZ military spectrum. As another example, the House bill restricts the judiciary: “No court of the United States may use appropriated funds to enforce a contempt citation for failure to comply with an injunction or temporary restraining order if no security was given when the injunction or order was issued….” Senate Democrats should be able to delete these items by using the “Byrd rule.”
Summary: Some version of the “big, beautiful budget bill” may pass this year, but it will not be the House Bill. The issue for Republicans is whether the “big, beautiful budget bill” can pass in time to deal with the debt ceiling deadline. I think not.
I predict that sometime this summer Republicans will be forced to pass a small bill raising the debt ceiling. I believe they will have to have Democratic votes to pass this debt ceiling increase. Stay tuned.
