Republicans May Not Be Able to Extend the Trump Tax Cuts
Six obstacles show why it won't be easy for them
After spending a long time debating whether to use one or two budget reconciliation bills to pass the Trump agenda of cutting immigration, investments in clean energy, taxes, and spending (outside of Medicare, defense and Social Security), Republicans in Congress have just decided to try pass everything in one big bill—and split it up into two bills—at the same time.
If this sounds like a contradiction, it’s because it is. And it doesn’t bode well for their chances of success.
It seems that House Republicans are going to try to pass the Trump agenda in one big bill, while Senate Republicans will proceed with moving quickly on a bill focused on the immigration crackdown, and then later in the year try to pass a second reconciliation bill that is focused on extending the 2017 Trump tax cuts. The idea appears to be that, after a few weeks or months, Republicans will see which chamber has made more progress, and then the other one will just scrap all of their work and get on board.
This perplexing approach is indicative of the high levels of dysfunction within the Republican Congress. It is also another sign of just how hard it is going to be for congressional Republicans to pass the Trump agenda into law—even an extension of the Trump tax cuts that should be easy for Republican majorities.
Republicans have the clearest path forward in the Senate. With 53 senators, the tiebreaking vote from Vice President-elect J.D. Vance, and only one Republican senator occupying a state that Kamala Harris won (Susan Collins in Maine), there is every reason to expect that the Republican Senate majority could ram a reconciliation bill agenda through the upper chamber. While the filibuster means that Senate Republicans will have to work with Democrats on everything outside of reconciliation bills and nominations (and Senate Republicans do NOT have the votes to eliminate the filibuster), they should have a strong enough majority to give Trump legislation that is at least close to what he wants on cuts to immigration, taxes, clean energy investments, and (non-defense, non-Social Security, non-Medicare) spending.
The same can most definitely not be said of the House. In fact, as I will explain below, the obstacles to passing the Trump agenda through the House are so severe that we should in no way consider it certain that the Trump tax cuts will be extended.
Here are the six major obstacles House Republicans face to extending the Trump tax cuts:
Narrow margin
At various times this year, Republicans will have majorities of 217-215, 219-215, and 220-215 (although 219-216 is a remote possibility, depending on the outcome of the special election for Rep. Elise Stefanik's soon to be vacant seat in New York's 21st congressional district). This means that, at best, House Republicans can only lose two votes and still pass a reconciliation bill (members of opposing parties never support reconciliation bills, so don't expect any Democratic votes on these in 2025-2026). At other times, Republicans will only be able to lose one vote, or even zero votes. This means they are starting with excruciatingly small margins and almost no room for error.
The vulnerable 14
According to the Cook Political Report, 14 House Republicans won their seats in 2024 by 5% or less. Given the high likelihood of Democrats improving on our 2024 performance in 2026, all of these 14 are extremely vulnerable, and they know it. Making these 14 take any difficult votes that could either hurt their districts, such as by cutting green energy investments where they live or by not raising the SALT deduction cap, is not going to be easy for the Republican leadership. The same can also be said for convincing these 14 to vote for unpopular provisions, such as extending the portion of the 2017 Trump tax cuts that benefited high income households.
Corralling each and every member of your caucus who represents a swing district to vote for a party-line bill is no easy feat, as we all learned in 2021-2022 with the Inflation Reduction Act. House Republicans will have the same problem that Democrats faced back then, only they will have to convince even more potentially vulnerable members to get on board than were necessary in 2022. Imagine having 14 Joe Manchins and Kyrsten Sinemas.
SALT caucus
There are eight to 10 Republican members of Congress, all of whom are from districts in high tax, blue states like California, New Jersey and New York, who will vote against any reconciliation bill that does not raise or eliminate the state and local tax (SALT) deduction cap that Republicans used to finance their 2017 tax cuts. From The Hill:
New York Rep. Mike Lawler (R) introduced legislation Wednesday to lift what he called “the unfair cap” on SALT deductions for single filers and $200,000 for married couples.
“This is a top priority for the Hudson Valley, and I’m committed to getting this done in the 119th Congress,” he declared.
Rep. Nick LaLota (R-N.Y.) told NBC News last month that between eight and 10 House Republicans could insist on raising the cap on SALT deductions.
“Two-seat majority; eight or 10 very SALT-y Republicans? You guys can do the math on that one,” he said.
That threatening language is coming from House Republicans in the SALT caucus themselves—I am not adding it in. It is also not really a threat. Two House Republicans who are in the SALT caucus and who were also in the House in 2017, Reps. Christopher Smith and Darrell Issa, voted against the 2017 Trump tax cuts, precisely because it included the SALT deduction cap. Rep. Elise Stefanik also voted against those tax cuts for exactly same reason, and if a Republican does manage to succeed her in Congress, he or she will be under immense pressure to do the same.
The problem here for Republicans is that they can't just get rid of the SALT deduction cap, because it is very popular among other House Republicans. They like punishing people in high tax blue states, after all. Further, the SALT deduction cap is one of the primary ways Republicans paid for the 2017 tax cuts. Raising the cap, or removing it entirely, would greatly expand the cost of any reconciliation bill, causing major problems for overall passage.
Debt ceiling holdout diehards
While it is not required that Republicans pass an increase to the debt ceiling in any of their potential reconciliation bills, that is one path they are considering. If they try to take that path, they will find it quite difficult. This is because there are two members of their own caucus, Reps. Andy Biggs of Arizona and Tim Burchett of Tennessee, who have literally never voted to increase the debt ceiling. Ever. Those two, on their own, make passing a debt ceiling increase with only Republican votes all but impossible.
If Republicans cannot pass a debt ceiling increase on their own, that means they will have to work with Democrats to pass one. This will actually give Democrats an opportunity to make demands on other policies, including those that will impact the reconciliation bills. This creates another unpredictable dimension to the Republican attempt to extend the Trump tax cuts.
Red districts that benefit from green investments
One of the primary ways that Republicans intend to finance their reconciliation bills is by eliminating many of the tax credits for renewable energy projects that were in the 2022 Inflation Reduction Act. However, a major problem for Republicans is that a lot of these tax credits are proving beneficial for red districts. Back in August 2024, 18 Republican members of the House—14 of whom are still serving in the House today—sent a letter to Speaker Mike Johnson urging him to preserve those green energy investments:
There’s increasing recognition among House Republicans that scrapping the entire suite of renewable energy tax credits codified in the Democrats’ 2022 climate law could prove to be politically unpopular — maybe even untenable.
More and more GOP lawmakers are coming forward to say they don’t want to repeal those Inflation Reduction Act credits if their party wins control of the House, Senate and White House in November — credits that are leading to thousands of new jobs and billions of dollars in spending around the country. (...)
[Buddy] Carter and [Mark] Amodei are Republican House members from Georgia and Nevada, respectively. And they were among the 17 House Republicans who joined [Rep. Andrew] Garbarino in a letter in August urging House Speaker Mike Johnson (R-La.) to preserve the credits in any tax overhaul package they might pursue next year through the budget reconciliation process, which allows lawmakers to bypass the Senate filibuster.
Combine this group with the SALT caucus, and with the widespread Republican refusal to cut Social Security, Medicare or defense spending, and it is getting difficult to figure out exactly how Republicans are going to finance extending the Trump tax cuts and their immigration crackdown.
Freedom caucus hardliners
Given the mounting problems of financing these reconciliation bills, some Republicans, such as the powerful Sen. Mike Crapo of Idaho, are suggesting that they use creative accounting methods. That is to say, these Republicans are arguing that they don't have to offset the $4 trillion price tag of extending the Trump tax cuts for 10 years at all because, since the tax cuts are law right now, extending them won't increase the deficit any more than current law.
This nonsensical argument that spending a billion dollars a day won't cost you anything in the future if you have already been spending a billion dollars a day every day for the past seven years is, thankfully, not accepted by all Republicans. In particular, 11 board members of the hardline House Freedom Caucus sent Speaker Johnson a letter last week demanding that any reconciliation bill actually reduce the deficit. Instead of using creative accounting measures to accomplish this, at least one of those 11, the ever-obstreperous Rep. Chip Roy, is even saying that raising the corporate tax rate should be on the table. I'm sure that will go over really well with the rest of the Republican caucus.
Add these six factors together and there really is no guarantee at all that Republicans are going to be able to pass an extension of the Trump tax cuts.
We can make things harder for Republicans by helping Democrats put in respectable, competitive performances in the special elections for the two vacant House seats in Florida's 1st and 6th congressional districts. These two special elections will take place on April 1, which will almost certainly be before Republicans in Congress are able to pass an extension of the Trump tax cuts.
In November 2024, the Democratic candidates in these districts received 34.0% and 33.5% of the vote respectively. if Democratic nominees in the upcoming special elections can put up much better numbers—say, 40% or more—it will solidify the narrative that the 2026 House elections are looking good for Democrats. This will really make life difficult for the 14 House Republicans who won by 5% or less in 2024.
If you would like to help Democrats perform well in these upcoming special elections, the best thing you can do right now is to make a contribution to the Democratic Congressional Campaign Committee (DCCC). The DCCC is the national party committee tasked with helping Democratic House candidates in swing districts and special elections. They can help provide the Democratic nominees in these districts with the staff, advertising budgets and voter turnout operations they need to run competitive campaigns.
Also, every step of the way, at Bowers News Media and Wolves and Sheep, we will continue to provide news explainers on the 2025 special elections, the 2026 midterms, the fight against the Trump/Republican legislative agenda, and ways for you to take impactful actions on all three.
My, my, my...MY! Thanks for all the good information!!! Would it help if McConnell was running things, or is he, sort of? Excellent post!!!