Economic Policy: What’s on the Horizon for Small Businesses and Families
Timing and strategy are at the heart of a growing debate among lawmakers as they chart the course for a major tax and economic reform package under the new administration. Senate Majority Leader John Thune (R-SD) suggests prioritizing border security and permitting reform within the first 30 days, leaving tax reform for later in the year. However, House Ways and Means Chairman Jason Smith (R-MO) disagrees, arguing that tax reform should be the first major legislative focus to ensure timely benefits for small businesses and families.
A key sticking point is how to handle the bill’s impact on the federal deficit.
- Senate Viewpoint: Finance Chairman Mike Crapo (R-ID) argues that extending the Trump Tax Cuts—currently established policy—shouldn’t require offsets through tax hikes or spending cuts.
- House Viewpoint: Budget Chair Jodey Arrington (R-TX) maintains the bill should be fully offset to avoid adding to the deficit.
Lawmakers largely agree on core elements of the tax plan, including:
- Extending the 2017 Trump Tax Cuts, such as the 20% deduction for S-corporations and small businesses.
- Introducing new measures, like eliminating taxes on tips, overtime, and Social Security benefits, which align with promises made on the campaign trail.
Why It Matters
These proposals have significant implications for small businesses, families, and overall economic growth. Tax cuts aimed at these groups could provide relief and fuel economic activity, but disagreements over timing and deficit impacts may slow progress.
The Economic Team
- Scott Bessent (Treasury Nominee): A Wall Street veteran with little D.C. experience, reflecting Trump’s preference for financial insiders.
- Kevin Hassett (Advisor): A seasoned policy expert from Trump’s first administration and the American Enterprise Institute, likely to advocate for traditional Republican economic principles.
While lawmakers are unified in their goal of delivering a major tax package, internal debates on timing, deficit considerations, and specifics will shape the legislative process in the months ahead. For small businesses and families, the stakes are high as Congress works to balance economic relief with fiscal responsibility.
