A few weeks ago the House of Representatives passed a budget resolution which focuses on changes in both tax and spending legislation. The budget resolution does not include specific changes to taxes or spending. Instead, it specifies which House committees need to change the programs they fund, and by how much.
The Trump Administration is also calling for reductions in taxes, based on the amount saved by reductions in these government programs. There is no plan to end deficit spending or to reduce the national debt. Our federal government has not had a balanced budget since the last year of Bill Clinton’s presidency.
The Fiscal Year 2025 House budget resolution calls for $1.7 trillion in spending cuts and $4.5 trillion in tax cuts.
There is an excellent analysis of the budget resolution online from the Wharton School of Business at the University of Pennsylvania. Both President Trump and DOGE Director Elon Musk have Bachelor’s degrees in Economics from Penn-Wharton.
The Penn-Wharton analysis says ” High-income households gain the most while lower-income households gain less or even lose, depending on how the spending cuts are distributed.”
The following committees have been directed to decrease their spending, and the amounts:
-
Agriculture $230 billion
-
Education and Workforce $330 billion
-
Energy and Commerce $880 billion
-
Financial Services $1 billion;
-
Natural Resources $1 billion
-
Oversight and Government Reform $50 billion
-
Transportation and Infrastructure $10 billion
-
Unspecified committee cuts $500 billion.
Three House committees will see an increase in spending:
-
Armed Services $100 billion
-
Homeland Security $90 billion
-
Judiciary $110 billion
The primary deficit would be increased by $2,798 billion, which is almost three trillion dollars.
What kinds of cuts should we expect to see? The largest is $880 billion in cuts from the Energy and Commerce Committee, which has jurisdiction over Medicaid, Medicare, and other federal health programs. $330 billion from the Education and Workforce Committee, which has jurisdiction over school funding, child nutrition, and workforce development. $230 billion from the Agriculture Committee, which has jurisdiction over the Supplemental Nutrition Assistance Program (SNAP) and farm subsidies.
Over the next few weeks, we will look at some of the programs which will probably have their funding cut, as well as the changes being proposed in our tax policies.