House Passes GOP Budget Plan as Holdouts Relent

The House of Representatives has passed the Republican budget plan, with holdouts eventually relenting to the pressure. The budget resolution, which sets the stage for advancing President Trump's legislative agenda, includes up to $4.5 trillion in tax cuts and a $4 trillion increase in the debt limit. The plan also directs various House committees to cut spending by at least $1.5 trillion over 10 years, with a goal of reducing spending by $2 trillion.

The budget resolution is a crucial step in the legislative process, allowing Republicans to pass some of their top priorities with a simple majority vote. However, the path to passage was not smooth, with at least four Republican budget hawks initially opposing the measure. Reps. Thomas Massie (Ky.), Victoria Spartz (Ind.), Warren Davidson (Ohio), and Tim Burchett (Tenn.) had expressed concerns about the level of spending cuts in the measure.

However, Speaker Mike Johnson (R-La.) and his leadership team managed to corral enough support for the budget resolution, working through conservative pushes for more spending cuts and addressing moderate concerns about potential reductions in Medicaid. While some conservatives remained firm in their opposition, moderate skeptics appeared to be softening on their resistance to the legislation.

The budget resolution lays out a $1.5 trillion floor for spending cuts across committees, with a target of $2 trillion. It also puts a $4.5 trillion ceiling on the deficit impact of any GOP plan to extend Trump's 2017 tax cuts and includes $300 billion in additional spending for the border and defense, as well as a $4 trillion debt limit increase.



The fate of the budget resolution remains uncertain, as the chamber is scheduled to vote on its final adoption around 6 p.m. on Tuesday. However, the vote could slip as opposition from conservative budget hawks puts the legislation in jeopardy. The Senate is also pursuing a narrower effort focused on boosting border security and defense spending, and it is unclear which side will win out in the end.

As the House and Senate continue to negotiate the details of the budget resolution, investors should keep a close eye on the developments, as the outcome could have significant implications for the economy and various sectors. The proposed cuts to government programs, such as Medicaid and SNAP, could impact healthcare, agriculture, and education industries, while the tax cuts could provide a boost to consumer spending and business investment.