The House recently passed a budget resolution by a narrow margin, unlocking the fast-track reconciliation process. This clears the way for a large legislative package including tax cuts, border security funding, energy policy expansions, and deep spending cuts.
Why This Matters:
The resolution revives important research and development (R&D) tax benefits by restoring immediate expensing of R&D costs and ending the five-year amortization rule, providing clearer business rules. These changes are especially welcomed by innovators and companies in high-growth sectors looking for more predictable tax planning.
Balancing Priorities:
The budget includes at least $1.5 trillion in spending cuts while protecting essential safety-net programs. This balance helped bring together conservative and moderate Republicans, easing concerns from fiscal hardliners about government spending.
What’s Next:
Lawmakers will soon begin drafting the legislative details, with key committee reviews expected. Coordination between House and Senate committees will be important, as they work to finalize the package before looming debt ceiling deadlines in late May or June.
Topics Under Consideration:
- Amped up border security – includes more than $140 billion in spending
- Boosted defense spending – $150 billion
- Medicaid changes – implement work requirements and increased eligibility checks
- Food Assistance – work requirements and increased state funding responsibilities
- Tax Breaks – extend the Tax Cuts and Jobs Act (TCJA) provisions permanently
- Tips/Overtime/Car loan interest – not taxable
- Debt ceiling – increase $4 trillion
- Child tax credit – increase to $2500 through 2028
- Rescind climate change provisions – remove tax credit for electric vehicle purchases and reclaim unspent grant funds
- MAGA savings accounts – children under 8 given $1000 to invest in savings
- State and local tax (SALT) deduction – raise $10,000 cap to at least $30,000
- Private university endowments – increased tax for those receiving larger amounts
- School vouchers – $5 billion annually spent on education outside of public school
Looking Ahead:
The goal is to pass a comprehensive bill with tax relief and spending reforms before Memorial Day.
https://www.accountingtoday.com/partnerinsights/abgi/article/house-passes-budget-framework
https://www.usatoday.com/story/news/politics/2025/05/19/house-republicans-trump-tax-bill/83724881007
