Senate GOP releases FY2025 budget for tax reconciliation bill

02 April 2025

Senate Republican leaders April 2 released an FY2025 budget resolution that would unlock the reconciliation process and provide the Finance Committee an instruction for up to a $1.5 trillion deficit increase for tax cuts. Under a current policy baseline, the roughly $4 trillion cost of Tax Cuts & Jobs Act (TCJA) extensions wouldn't be counted, meaning the $1.5 trillion could accommodate additional tax cuts, which Finance Committee Chairman Mike Crapo (R-ID) previously suggested could include changes to the Child Tax Credit and tax proposals put forward by President Trump. Tax increases are also possible.

The resolution sets a current policy baseline. The language calls for allowing the Budget Chairman to make adjustments for "more realistic assumptions regarding current tax policy, which may include extending provisions under Public Law 115-97 (131 Stat. 2 2054) (commonly known as the 'Tax Cuts and Jobs Act of 2017') in the baseline in order to prevent massive tax increases on working families and small businesses, and to align treatment of tax policy with major Federal spending programs, without raising revenue, by the amounts provided in such legislation for those purposes, provided that such legislation would not increase the deficit over the period of the total of fiscal years 2025 through 2034."

Senate reconciliation instructions in the resolution released today include:

Finance Committee	Not more than $1.5 trillion deficit increase
Commerce Committee	Not more than $20 billion deficit increase
Armed Services Committee	Not more than $150 billion deficit increase
Homeland Security & Governmental Affairs Committee	Not more than $175 billion deficit increase
Judiciary Committee	Not more than $175 billion deficit increase
Agriculture Committee	Not less than $1 billion deficit reduction
Banking Committee	Not less than $1 billion deficit reduction
Energy & Natural Resources Committee	Not less than $1 billion deficit reduction
Environment & Public Works	Not less than $1 billion deficit reduction
Health, Education, Labor & Pensions	Not less than $1 billion deficit reduction

The House reconciliation instructions remain unchanged from the House resolution, including instructions to Ways & Means for a $4.5 trillion net deficit increase to cover TCJA extensions that is reduced if total savings falls short of $2 trillion, and to Energy & Commerce for at least $880 billion in spending cuts.

The resolution reflects provides for a $5 trillion increase in the federal debt limit, which the Senate Budget Committee said is enough to extend into 2027.

The Senate may try to vote on the resolution this week, with the process capped by a vote-a-rama process of multiple amendment votes.

The budget and related materials are available here.

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Contact Information

For additional information concerning this Alert, please contact:

Washington Council Ernst & Young

Any member of the group at (202) 293-7474.

Document ID: 2025-0805