Congress Remains Divided Over How to Renew Trump Tax Cuts

March 11, 2025

Congress Remains Divided Over How to Renew Trump Tax Cuts

As Congress works to renew the 2017 Tax Cuts and Jobs Act (TCJA) before it expires at the end of 2025, negotiations remain complicated by disagreements over spending cuts, budget scoring, and whether to package tax cuts with other policy priorities. Below is a summary of where things currently stand.

What Congress Agrees On

There is broad support for extending the full package of 2017 tax cuts, including lower individual tax rates, larger standard deductions, and the expanded child tax credit.

While acknowledging each lawmaker maintains their own stance on the budget impact of a broader package of cuts, many Congressional Republicans are open to including new tax cut ideas President Donald Trump campaigned on:

No taxes on tips
No taxes on overtime pay
No taxes on Social Security income
A possible deduction for car loan interest

What Congress Doesn’t Agree On

Spending Cuts Paired with Tax Cuts

House and Senate Republicans cannot agree on the level of spending cuts that should accompany a tax renewal package. Some insist on deep spending reductions, while others prefer a more limited approach.

How to Measure the Fiscal Impact

Lawmakers are debating how to “score” the tax cuts, meaning how they account for their impact on federal revenue and deficits. Many in the House want to treat any renewals as new costs that add to the deficit, while many in the Senate believe that existing tax cuts were intended to be permanent, so extending them is not counted as a new cost in budget calculations.

Linking Tax Cuts to the Debt Ceiling

Some Republicans want to tie tax renewal to a debt ceiling increase, while others fear that could complicate passage or lead to concessions in spending negotiations.

Combining Tax Policy with Other Trump Priorities

There is ongoing debate over whether tax cuts should be packaged with border security measures and other conservative priorities. This is the idea of one “big, beautiful bill.”

Additional Debates and Unresolved Issues

State and Local Tax (SALT) Deduction Cap

Lawmakers from high-tax (blue) states want to raise the cap on SALT deductions, but there is resistance from fiscal conservatives.

House vs. Senate Strategy

House Republicans favor an all-in-one bill that includes tax cuts, spending cuts, and border security provisions.
Senate Republicans have not finalized their approach, making it unclear if they will support a single package or push for a more piecemeal approach.

With deep divisions still unresolved, negotiations are likely to extend well into 2025. Whether the tax cuts are renewed as part of a broader deal or as a standalone package will depend on how these key issues—spending cuts, deficit impacts, and political trade-offs—are resolved.

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