Four big things the 2025 congressional winners must overcome

WASHINGTON — As voters head to the polls in Tuesday’s election, they will also elect a new Congress. And whichever party wins a majority in the House and Senate will have to decide how to deal with a number of consequential policy questions.

Whether it’s expiring tax cuts and health care subsidies, another round of government funding, or urgent measures like a debt limit extension and a new farm bill, Congress will have its hands full.

And the next president – ​​Donald Trump or Kamala Harris – will set the agenda along with the new Congress.

Here are four big things the 119th Congress must address.

Trump’s trillion-dollar tax cuts expire after 2025

Large parts of Trump’s 2017 tax law totaling $3.3 trillion expire at the end of 2025. And the question of what will be extended — and what will be allowed to expire — under the Tax Cuts and Jobs Act depends on which party wins this election.

This will be one of the most important tasks of the new Congress, as sweeping tax increases are at stake if lawmakers fail to act. When the expiring provisions expire, the standard deduction for taxpayers will be halved, the top rate for top earners will increase from 37% to 39.6% and the exemption from paying inheritance tax will be halved, among other changes.

Former President Trump has said he wants to fully extend expiring tax breaks to all income levels and seek deeper tax cuts. Vice President Harris and Democrats say they want to extend tax cuts for those making $400,000 or less while ending them for the wealthiest Americans.

Another issue at stake: the state and local tax deduction, or “SALT,” which Trump and Republicans capped at $10,000 in the 2017 law. This limit will reset to infinity at the end of 2025. Trump has wavered on the issue while Democratic leaders are determined to lift the SALT cap, which disproportionately affects Americans in blue, high-tax states like California and New York.

Numerous Obamacare subsidies are ending and risk spikes in premiums

An expansion of funding under the Affordable Care Act, passed by Democrats in 2021 and extended the following year, expires at the end of 2025. The funding expands premium tax credits to ensure Americans can purchase a silver “benchmark” plan on the Obamacare exchanges for no more than 8.5% of their income.

Will this money be extended? If it were to expire, many Americans would see their insurance premiums rise, which could put pressure on Congress to take action. Continuing funding is estimated to cost about $25 billion per year, according to a 2022 Congressional Budget Office analysis.

The result could be significantly different depending on the election. Harris called for an extension of the money and protection of the 2010 ACA, a key Democratic legacy signed by President Barack Obama. Republicans could have a harder time approving funding. Trump has long sought to unravel the ACA and called for replacing the law during a debate in September.

The debt ceiling must be increased again

The next debt ceiling battle is scheduled for 2025; The country will hit the debt limit on January 1 and begin taking “extraordinary measures” to pay the bills. These actions will likely take months, and the Treasury Department will later announce an “X date” by which Congress must act or risk a default.

The debt ceiling is one of the peculiarities of Congress: It routinely passes laws that force the U.S. government to borrow money, but then has to vote separately on whether to borrow the money or default on its financial obligations, which economists say A crisis could lead to global economic collapse.

And over the past decade and a half, battles over the debt ceiling have grown increasingly heated on Capitol Hill, with a Republican-controlled House of Representatives bringing the U.S. to the brink multiple times amid conservative calls for spending cuts as the price of raising the debt limit.

Will there be another intense battle next year? That depends on who wins this week’s election and whether the outcome empowers conservatives to use the borrowing cap as a vehicle for political demands.

There will be another battle over government funding

Funding for large portions of the federal government expires on December 20, 2024, so the lame-duck Congress will have to deal with it after the election. But regardless of whether lawmakers set the issue for early 2025 or reach a full funding deal by the end of this year, the new Congress will go back to the drawing board sometime next year and renegotiate the size of government with the president.

Government funding bills and stopgap measures face the Senate’s 60-vote threshold, making maintaining government governance regularly a bipartisan task, regardless of who controls Congress or the White House. But the priorities could be very different depending on which party wins the election and what the margins are in Congress. A faction of right-wing Republicans in the House of Representatives allied with Trump have pushed for government shutdowns if they don’t get their way on spending. If they make an impact next year, it could be chaotic.

In addition to state funding, the Agricultural Act is also used – a law on agricultural and food policy that is supposed to be passed every five years. The last one expired in 2023 and has been running on autopilot since then. The next Congress will face the challenge of reaching long-term agreement on issues such as farm subsidies and food stamps.

A divided government could make each party equal partners in negotiating the next funding and agricultural policy, while a “trifecta” for one party would empower it to set the agenda.