WASHINGTON – When voters head to the polls for Tuesday’s election, they will also elect a new Congress. Whichever party wins control of the House and Senate will decide how to handle a series of successive policy issues.
Congress will have its hands full, whether it’s expiring tax cuts and health care subsidies, the next round of government funding, or measures to pass such as extending the debt limit and a new farm bill.
And the next president – Donald Trump or Kamala Harris — Together with the new Congress will determine the agenda.
There are four major issues the 119th Congress will need to address.
Trillions of dollars worth of Trump tax cuts expire after 2025
Major parts of Trump’s 2017 tax law totaling $3.3 trillion will expire at the end of 2025. The question of what will be extended and what will be allowed to expire under the Tax Cuts and Jobs Act depends on which party wins this election.
It will be one of the most important tasks of the new congresson the line with broad tax increases if lawmakers don’t act. If allowed to repeal the expiring provisions, the standard deduction for taxpayers would be cut in half, the top rate for top earners would rise from 37% to 39.6%, and the estate tax exemption would be halved, among others. changes.
Former President Trump has said he wants to fully extend expiring tax breaks across all income levels and pursue deeper tax cuts. Vice President Harris and Democrats have said they want to extend tax cuts for those making $400,000 or less, but freeze them for the wealthiest Americans.
Another dangerous issue: the deduction for state and local taxes or “SALT,“ Trump and Republicans capped it at $10,000 in the 2017 law. This limit resets to infinity at the end of 2025. While Democratic leaders are committed to lifting the SALT cap, which disproportionately hits Americans in high-tax blue states like California and New York, Trump has wavered on the issue.
Some Obamacare subsidies are ending, threatening premium increases
expansion of funding within Affordable Care ActIt was passed by the Democrats in 2021 and extended it expires at the end of next year, 2025. The funding expands premium tax credits to ensure Americans can buy a silver “benchmark” plan on the Obamacare exchanges for no more than 8.5% of their income.
Will this money be extended? If that deadline passes, many Americans will see increases in their insurance premiums, which could pressure Congress to act. Continuing funding through 2022 is estimated to cost about $25 billion per year. analysis by the Congressional Budget Office.
The result can be significantly different depending on the election. Harris called for extending the money and protecting the 2010 ACA, a key legacy for Democrats signed by President Barack Obama. Republicans may have a tougher sell to allow funding. Trump has it A long history of trying to open up the ACA and demanded that the law be changed during the September discussion.
The debt ceiling should be extended again
The next debt ceiling fight is scheduled for 2025; the country will reach its debt limit on January 1 and begin implementing “emergency measures” to pay the bills. These measures are expected to last for months, and the Treasury Department later said that “Date of XCongress must act or risk default.
The debt ceiling is one of the quirks about Congress: It routinely passes laws that force the U.S. government to borrow money, but then requires it to vote individually on whether to borrow the money or default, which economists say can cause economists to become aggressive. global economic collapse.
And over the past decade and a half, the debt-ceiling battles on Capitol Hill have become increasingly fierce, with the Republican-controlled House of Representatives repeatedly pushing the U.S. to the brink amid demands for spending cuts as the price of raising the debt limit.
Will it be a tougher fight next year? That depends on who wins this week’s election and whether the outcome empowers conservatives to use the debt limit as a tool to make policy demands.
There will be another government financial struggle
Funding for major parts of the federal government is set to expire on December 20, 2024, requiring a lame-duck Congress to deal with it after the election. But even if lawmakers resolve the issue by early 2025 or reach a full fiscal deal by the end of this year, the new Congress will go back to the drawing board and renegotiate the size of government with the president at some point next year.
Government funding bills and shutdown measures are subject to the Senate’s 60-vote threshold, allowing Congress or the White House to run the government in a bipartisan effort regardless of who controls it. But priorities can vary greatly depending on which party wins the election and how the divisions in Congress play out. A faction of hard-right House Republicans has called for a government shutdown unless they find spending ways that suit Trump. If they have influence next year, things could get messy.
Riding along with the government’s funding is the farm bill — an agriculture and food policy bill that must be passed every five years. The last one expired in 2023 and has been running on autopilot ever since. The next Congress will be asked to strike a long-term deal on issues like farm subsidies and food stamps.
A divided government could make each party equal partners in negotiations on the next round of financing and agricultural policy, with a “troika” for one party empowered to set the agenda.