Republicans are on the verge of a sweeping victory in Congress, but Raymond James says it won’t be easy for President-elect Donald Trump to sign the legislation he wants – including the tax cuts in his platform. As of Tuesday afternoon, Republicans gained 215 seats in the House of Representatives, while Democrats gained 206 seats, according to NBC News. Ed Mills, a Washington policy analyst at Raymond James, said Republicans will control the Senate with 52 seats to Democrats’ 47, but this time the Republican advantage in the House will be smaller. Significantly smaller. “Trump’s influence over congressional Republicans will be stronger in 2025, but his advantage in the House will be in the single digits (down from 47 in 2017). … A narrow majority in the House will The passage of any tax bill in 2025 becomes complicated,” he said. Mills said Republicans are expected to use the budget reconciliation process to pass any tax proposals from President-elect Trump. However, even when the party held a majority in the House of Representatives in 2017, he noted that 13 Republicans still voted against then-President Trump’s cut due to disagreements over the $10,000 limit on the state and local tax (SALT) deduction. tax proposal. The measure, known as the Tax Cuts and Jobs Act, was finally passed and took effect in 2018. Mills added that one of the points of discussion about how to fund this tax cut is repeal of the Inflation Reduction Act, another possible point of contention. “The narrow margin will make this goal more difficult, especially given the number of IRA-funded projects that congressional Republicans have in their districts,” the analyst said. Mills said that in order to prevent Republican lawmakers from Defecting on the tax bill, lawmakers could seek compromise on the SALT deduction, tariffs or Medicaid reform. Tobin Marcus, an analyst at Wolfe Research, also believes that passing the tax bill with narrow majorities in the House and Senate is a “complex challenge.” “Congress’s negotiations on this package will be complex, so there will definitely be issues that we don’t anticipate. But we think the high cost of extending the expiring personal tax provision beyond fiscal year 2025 will significantly constrain Republicans. Incremental tax cuts can be taken and will force them to include some real offsets, despite the reluctance of some parts of their coalition,” Marcus wrote in a research note on Tuesday.
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