Republicans' Agenda Under Trump

By David Morgan
WASHINGTON (Reuters) – With a firm Republican majority expected in Washington next year, President-elect Donald Trump aims to implement a bold agenda focused on tax cuts for businesses, workers, and retirees. This approach will test the GOP's frequently stated goal of managing the country's $35 trillion debt.

Early Priorities

Key initiatives anticipated include:
– Extending Trump's 2017 tax cuts
– Funding the construction of the wall along the U.S.-Mexico border
– Cutting unspent Democrat-allocated funds
– Eliminating the Department of Education
– Curbing the powers of agencies like the Consumer Financial Protection Bureau

Republican lawmakers view these efforts as essential for driving economic growth and tightening immigration control. House Majority Leader Steve Scalise stated on X, "It's time to get to work. Together we will Make America Great Again."

Risk of Rising Debt

However, this agenda could lead to further increases in national debt as borrowing costs rise. Republicans are facing challenges, especially with a deficit exceeding $1.83 trillion in fiscal 2024 and interest on the debt surpassing $1 trillion for the first time.

According to a Reuters/Ipsos poll, 62% of Americans believe Trump's proposed policies will increase national debt.

Legislative Strategy

Given expected Democratic opposition, Republicans intend to utilize budget reconciliation to pass key legislation related to spending or revenues while sidestepping the Senate's 60-vote filibuster requirement. This tactic was previously employed during the early years of Trump's first term and Biden's term.

Some conservative members, such as Senator Ron Johnson, indicated hesitance to support tax cuts without corresponding spending reductions on entitlement programs like Social Security and Medicare.

Johnson emphasized the need for significant changes now to avoid a potential future debt crisis: "We either do big change now or big change will be forced on us in a horrific debt crisis."

Upcoming Challenges

The first major challenge for the new Congress will emerge in January when lawmakers will work on a fiscal 2025 budget resolution necessary for reconciliation.
Republican Senator Mike Rounds highlighted the importance of passing a budget to access reconciliation tools.

Trump's tax proposals, such as extending the 2017 cuts and eliminating taxes on tips and Social Security benefits, could add $7.5 trillion to the debt over the next decade, according to the nonpartisan Committee for a Responsible Federal Budget.

Republicans believe they can offset lost tax revenue by promoting growth and imposing spending cuts, with the aim of recovering around $1 trillion from the Inflation Reduction Act known for green energy tax credits.

Trump's continued influence was noted during his absence from power, directing party priorities effectively. As he returns to the Oval Office, his sway over the GOP is expected to strengthen.

Party Dynamics

Despite previous challenges with party cohesion, Senate Republican leader Mitch McConnell expressed optimism, reflecting on past successes: "It's harder, but I think we were successful before with a narrow majority and I think we will be again."