One of the great promises of Donald Trump for his second mandate was to resume the financial sales that he approved in 2017, approved a new series of tax drops and reducing government spending, in what he called the “great, excellent law”. The fact that he scratched a small absolute majority in both cells gave him a clear hope of easily achieved his goals. But as the moment of truth approaches the internal battles in the Republican Party, they threaten to drop their great legislative project with the first exchange.
On Tuesday, the Treasury Committee of the House of Representatives of the United States will vote for amendments for the legislative draft. The problem is that Different currents of the Republicans require numerous changes in opposite and incompatible directions with each other And with very high costs that will make accounts that support fiscal reform, already caught with tweezers and a large dose of accounting. There is a chance that the law does not even arise this first obstacle, and although it reaches this, no one knows whether the leaders of party leaders can put a circle for two weeks that were given.
What the project contains
The project that they process has three large parts. On the one hand, he will strive to expand the reduction of tax approved by Trump in 2017, including IRPF sales, company or continuity tax. As the US legislation requires Vericuetos, fiscal reforms that increase the deficiency should expire after 10 years or be approved by a majority reinforced in the Senate. Without the support of the Democrats, Trump was supposed to agree to the date of expiration of these reductionsFor two and a half years. This law will extend these reductions for 10 years, until 2035.
Further, the project will add other taxes: Trump promised to remove tips, public pensions and additional hours after income tax. To compensate, it would approve Strong contractions of two great help games for the poorest people: Public medical insurance (Medicaid) and food assistance (SNAP).
And finally, this law will increase public debt allowed by $ 5 billion. Since January, the US government cannot pay off the debt, the term of the congress permission has expired. This law would extend permission and increase the so -called “debt roof” to cover the expected effect of this law, which would cause the US state deficit and debt over the next decade. Without this permission, yes, the country can announce the suspension of payments in the summer.
Internal battles are intensifying
Trump’s big problem is that His parliamentary majority is much more than eight years agoWhen Trump first stepped on the White House, the president of Congress, the Republican Paul Ryan, had most of the 47 deputies in the House of Representatives for the first time. Today, the majority of Mike Johnson is only 7 deputies, so he can barely allow voting against 3 of them. And this is not madness: it was three republican deputy voted against the adoption of this law, which was approved by one voice, which made it clear that the entire project was hanging from the branch.
And the problem is that the larger the small font, the more problems and divisions appear. A group of republican deputies of oriental democratic states, such as New York or New Jersey, require strong tax discounts for the middle and high classes of these areas that were great “losers” of the 2017 reform. And here the party leaders have a problem: If the 2017 law expires, the increase in taxes, which was then applied to these groups, will disappear, and this small contingent of deputies would have reached its goalIt is enough to vote for the law to win the field. To vote yes, the offer must be very convincing. And the last sentence made on this Monday is not enough: the group posted a proposal of partial reduction, calling it “offensive” and repeating its threat to completely knock down the project.
To this is added that a large number of state deputies where Trump devastated the elections knows that his voters depend on social programs that Trump wants to eliminate, or do not want to lose help for the renewable energy approved by Joe Bayden in 2021, and that this law will cancel. Saving all these programs will cost billions of dollars.
But the most radical wing of the party, which was murdered by all parliamentary leaders of the Republicans, requires that these expenses costs be real, and not just accounting tricks. If not, they will require compensation for them by lower tax drops. The savings from combustion will consist of reducing tax sales and even force them to touch those in 2017.
And what will happen if there is no agreement?
The signals suggest that the “great, beautiful law” is on the verge of an explosion. Trump himself decided to withdraw one of the ideas for the project, reduce drug prices and try to transfer it through one of his famous executive orders, even if he does not have legal value and risks lying down by courts. This resignation, in order to provide legislative support to one of his favorite projects, suggests that the party regrets to put all its ideas in one drawer for a tailor.
The risk is that The refusal would be an excellent budget “shock” for the United StatesThe field on the one hand, this would be positive, since the disappearance of financial sales of 2017 will reduce the huge state deficit incurred by the country. But An increase in the tax that this will, adding to Trump’s tariffs, will lead to a strong economic reductionThe field of all the incentives approved in the last decade would turn out with a strong restriction, while the damage that will mean economic growth in the next months. And the evaporation of the desired reduction in taxes that Wall Strith is already quoted, will enter bags.
Worse, before this happened, two years later the country will have to solve the crisis of duty on the roof. The suspension of US payments, no matter how technical and temporary they may be the meaning of uncertainty, which shake in the markets in these months. To avoid this, Trump had to do what he had not yet been done: to sit down with the Democrats in order to agree on a bicopartican agreement and abandon their maximums. A complete moral blow to the president who loves to dress as a king in his social networks and who has an absolute majority on paper in two cells.
