WASHINGTON — Republicans in the U.S. Congress have released initial drafts of a sweeping budget package that would fulfill President Donald Trump‘s calls to cut taxes and reduce spending, though many details still need to be resolved.
Here is a summary of what they have proposed and what they have left out as of May 12. Budgetary estimates cover the next 10 years and are provided by the Joint Committee on Taxation and the Congressional Budget Office.
Taxes: What’s in
Makes permanent the lower income tax rates in Trump’s 2017 Tax Cuts and Jobs Act that are currently due to expire at the end of 2025.Boosts the standard deduction by an additional $1,000 to $1,500 until 2029.Extends increased alternative minimum tax and the enhanced deduction for “pass-through” businesses, such as sole proprietorships.Expands the Child Tax Credit to $2,500 from $1,000 until 2029, and keeps it at $2,000 after that, indexed to inflation.Raises the estate tax exemption from $14 million to $15 million.Extends tax breaks for multinational corporations.Exempts taxes on some tipped income, such as from hair care, spa treatments and other types of employment.Exempts taxes on overtime pay.Exempts taxes on interest payments on loans for domestic autos.Exempts up to $5,000 for contributions to scholarship funds for private schools.Allows taxpayers to deduct up to $30,000 for state and local tax payments, up from $10,000 now.Creates new $4,000 deduction for seniors.Allows parents to contribute up to $5,000 tax-free each year to “MAGA Accounts” for their children, to be used for school, housing and other costs when they reach adulthood.Raises taxes on the biggest university endowments from 1.4% to 21%.
What’s not included
Initial proposals do not include Trump’s suggestion to raise the top income tax rate on the highest-earning Americans, or end the “carried interest” tax break for income earned by private equity, venture capital and hedge fund managers.
Total cost: at least $4.9 trillion
Medicaid: What’s in
Requires able-bodied adults who have no dependents to work, volunteer or be in school at least 80 hours a month. Bolsters verification efforts that check whether participants and health care providers are eligible for Medicaid. Blocks regulations that make it easier to enroll.Excludes noncitizens from the program and penalizes states that use their own funds to provide coverage to illegal immigrants. Blocks regulations that required minimum staffing levels at nursing homes and other long-term care facilities.Prohibits funding for gender transition therapies for minors.Prohibits payments to large providers like Planned Parenthood that specialize in birth control, abortion and other reproductive health services.Limits state taxes on providers that are used to raise the federal government’s contribution.
What’s not included
Reduced payments to states that expanded eligibility under the Affordable Care Act.Changes to the way the federal government helps states pay for the program.
Total savings: $715 billion
CBO estimated that these changes would reduce enrollment in Medicaid by at least 7.7 million people 10 years from now. Medicaid currently covers about 71 million people.
Energy, environment, communications
Cancels funding for green-energy grant programs in the 2022 Inflation Reduction Act, including vehicle manufacturing, home efficiency upgrades, electricity transmission and wind power.Creates incentives for pipelines, natural gas exports and exploration.Repeals grant programs for purchasing electric heavy-duty vehicles.Repeals grants to reduce air pollution and greenhouse gas emissions. Repeals fuel-efficiency standards for automobiles and pickup trucks.Makes more electromagnetic spectrum bands for communication available for auction.Prohibits states from regulating artificial intelligence.
Total savings: $197 billion
Reporting by Andy Sullivan and editing by Scott Malone and Bill Berkrot, Reuters News Agency
