The Reconciliation Package to Protect Social Security, Taxes, and Business Efforts: The Status of the Senate and House Majority Leaders

Republicans are pushing the package through Congress using a special process known as budget reconciliation that allows them to steer around a filibuster and win approval without a single Democratic vote. If all Democrats vote against it in both the House and the Senate, they will lose three Republican votes, but no more than that, and every member will vote.

The measure also has several new, temporary tax cuts that Mr. Trump promised he wouldn’t tax tips or overtime. His pitch not to tax Social Security benefits takes the form of a bonus $4,000 deduction available to Americans over 65, with the benefit shrinking at higher income levels. Americans would also be able to deduct interest on car loans from their taxable income, though the car has to be made in the United States.

The standard deduction and child tax credit would be reduced, as well as a $1,000 addition to the deduction, for the next 10 years. Kids born in the next four years will receive $1,000 deposited into a so-called ‘MAGA account’ that is invested in the stock market.

Valuable deductions for research and investment spending as well as a new tax break for building factories will be given to businesses. A deduction available to the owners of many businesses would become slightly more generous and be extended indefinitely.

The updated version of the massive bill was released by the House Republicans in hopes of moving forward with the President’s agenda by the end of the week. The new legislation aims to satisfy both fiscal hawks and blue state Republicans who want to lock in more favorable taxes for their customers.

The bill needs support from Johnson’s members in order to pass and it will face further challenges in the Senate. Democrats are expected to vote against the bill in unison.

The State and Local Tax Deduction and Implications for Medicaid, the Low-income, and Elderly: The House Budget ‘Not for the High-taxed States’

One issue that has been the most difficult to negotiate is the state and local tax deduction. The deduction is important to a few Republicans from high taxed states, like California and New York. The deduction was capped at $10,000. The House plan would lift the cap to $40,000 for married couples with incomes up to $500,000.

The bill proposes changes to Medicaid, a joint federal and state program for low income, elderly and disabled Americans. It’s remained one of the most divisive issues in the negotiations, but lawmakers argue that the changes introduced by the bill will bring hundreds of billions in necessary savings. childless adults without disabilities would have to work 80 hours per month in order to be eligible for benefits at the end of 2026.

The legislation seeks to reduce waste by shifting the sign up period to every six months and by adding income verifications for those who register for the program.

The House bill would raise the nation’s debt limit by $4 trillion. Lifting the debt limit doesn’t mean new spending. Instead, it allows the government to pay for programs that Congress has already authorized. If the government can’t meet its obligations, it will be at risk of default, which would be catastrophic for the world financial system as a whole. The U.S. will no longer have enough money to pay its bills in August if Congress doesn’t act, says the treasury secretary.