House and Senate Republicans are at odds over the duration and fiscal implications of extending President-elect Trump’s tax cuts, which are set to expire at the end of 2025. These differences have sparked an early intraparty debate, as both chambers begin laying groundwork for tax policy in the upcoming legislative session.
House Republicans, led by Speaker Mike Johnson (R-La.), are exploring a more cautious four-year extension of the tax cuts, citing concerns about their potential impact on the federal deficit. According to sources familiar with the discussions, this strategy aims to avoid alarming fiscal conservatives wary of adding more to the national debt, which currently stands at a staggering $36 trillion.
The shorter extension, proponents argue, would result in a smaller budgetary score from the Joint Committee on Taxation (JCT), making it more palatable to deficit-conscious lawmakers. A 10-year extension, in contrast, is estimated to add over $4 trillion to the deficit, a figure that could deter fiscal hawks in the narrow Republican House majority.
Incoming Senate Majority Leader John Thune (R-S.D.) and other Senate Republicans, however, are pushing for a longer-term extension of at least 10 years. Thune emphasized the importance of providing businesses and families with stability and certainty. "It’s certainly aspirational,” Thune said of a 10-year extension. “But it’s always going to be what the traffic will bear. We’ve got to figure what the House can pass and what we can pass.”
Senate Finance Committee Chair Mike Crapo (R-Idaho), a key advocate for the 2017 Trump tax cuts, has proposed a controversial budget scoring approach. Crapo argues that extending the cuts should be viewed as maintaining current policy rather than a new fiscal cost, which would significantly reduce its budgetary score. “The failure to stop tax increases from happening is being considered a deficit,” Crapo said in a recent interview. He noted that allowing the cuts to expire would result in a $4 trillion tax hike, with $2.5 trillion falling on individuals earning less than $400,000 annually.
While Crapo’s approach has gained traction among Senate Republicans, some conservative House members view it as a budgetary gimmick. “A very large portion of this—if not all of it—should be paid for by following through on President Trump’s promise to downsize government,” a conservative GOP aide said.
The House’s slim majority next year means Republican leaders cannot afford many defections, especially if Democrats unite against the bill. The departure of key lawmakers to join the Trump administration, including Rep. Mike Waltz (R-Fla.), further complicates the vote count.
Negotiations remain fluid, and no final decisions have been made. Republican leaders in both chambers acknowledge the need for a compromise that balances political feasibility with their broader tax policy goals.
.jpeg)
