Republicans brought the president’s tax cuts one step closer to reality, but Wall Street remains on edge about the fiscal costs.
Bond investors squirm over the budget
House Republicans overcame bitter differences to deliver President Trump a major victory on Thursday.
Minutes ago, they narrowly passed a spending bill that packs in huge tax cuts and guts many of Joe Biden’s signature policies on student-debt relief and climate transition efforts.
The next hurdle is the Senate, where Republican lawmakers — especially those looking to preserve elements of Biden initiatives and Medicaid entitlements — could claw back some cuts. Whatever the outcome, investors remain worried about the costs. Bond yields ticked higher moments after Speaker Mike Johnson banged his gavel in triumph.
What’s in the bill? Here is a handy guide of the latest changes. Notable provisions include a $4 trillion boost to the nation’s debt limit (a move that fiscally hawkish Republicans have traditionally staunchly opposed), and the creation of $1,000 “Trump accounts” for newborns.
What’s not quite in there: Trump’s campaign promise for a straightforward slashing of the corporate tax rate to 15 percent, from 21 percent on Thursday, for domestic manufacturers. Companies can trim their tax bill, especially by bringing more production back to the United States and spending R.&D. money domestically, but it’s unclear how much they would save, and who would qualify.
“It could be because the revenue math didn’t work,” Garrett Watson, director of policy analysis at the Tax Foundation, told DealBook.