Trump’s proposed budget calls for a $4 trillion debt ceiling raise

A budget blueprint has been cleared by the Republican-led House of Representatives, the first step towards advancing President Donald Trump’s plan to cut taxes as well as increase funding for border security and the military. The proposal was passed by a narrow 217-215, with all Republicans but one voting for the measure and Democrats rejecting it (one Democrat did not vote).

Plan details: The budget plan calls for $4.5T in tax cuts, which would include the renewal of the cuts Trump introduced in 2017 that are set to expire at the end of the year. The plan also calls for cutting federal spending by $2T over ten years. To note, it instructs the Energy and Commerce Committee – which oversees Medicaid and Medicare – to find at least $880B in cuts. House Speaker Mike Johnson (R-LA) has insisted that the budget proposal aims to root out “fraud, waste and abuse” in Medicaid.

As for the national debt, which is currently more than $36.5T, the House proposal calls for raising the debt ceiling by $4T. According to think tank Center on Budget and Policy Priorities, the debt limit will likely be reached in November 2026 even with the $4T increase. In that case, the Treasury Department would have to resort to extraordinary measures to pay government obligations.

What’s next: The House vote is viewed as procedural, as the Senate last week voted for a contrasting budget blueprint. The Senate proposal does not include tax cuts or raising the debt ceiling. The House and Senate will need to reach an agreement to draft a legislation, which could take months and further divide lawmakers. The current government funding is set to expire on March 14.