By Richard Rubin and Siobhan Hughes

WASHINGTON -- Senate Republicans plowed ahead with their plans for trillions of dollars in tax-cut extensions and new breaks, completing a crucial budget vote to advance President Trump's legislative agenda just after his tariffs triggered a sharp downturn on Wall Street.

Lawmakers voted 51-48 early Saturday morning to adopt a fiscal framework for Trump's tax reductions and proposed new spending on border security and the military. Sens. Rand Paul (R., Ky.) and Susan Collins (R., Maine) broke with their party to vote against the budget. Democrats, who opposed the measure, used the overnight session to try to force Republicans into politically uncomfortable votes on such issues as Medicaid, Social Security and tariffs.

Passage of the framework marks an important step for Republicans, who are struggling to bridge internal differences about lawmakers' willingness to tolerate rising budget deficits and their appetite for spending cuts. Senate GOP leaders largely united lawmakers around the budgetary framework for the tax-and-spending package, urging them to move the process along and promising that any potential sticking points will get unstuck later.

But the Senate plan defers important decisions about the depth of spending cuts, and Republicans must eventually hash them out in binding legislation. The framework postpones a reckoning in the tug of war between House conservatives who say spending cuts should be tied to tax cuts and Senate Republicans who are wary of how the House plans might harm rural hospitals and Medicaid beneficiaries.

"One way or another, we're going to have to resolve it, right?" said Sen. Lisa Murkowski (R., Alaska). "You can do it now or you can do it later. And leadership has made the determination that they'll do it later, but it doesn't make it go away."

The budget process gives Democrats little control over the outcome, but they can force Republicans on the record in what lawmakers call a vote-a-rama. In a series of votes that kicked off Friday night, Democrats were highlighting who they think wins and loses from Republican policies.

"While the economy is burning, thanks to Donald Trump's reckless tariffs, the bill the Republicans are scrambling to pass is essentially a bailout for them and big corporations," said Sen. Ron Wyden (D., Ore.).

In one of the votes, Murkowski and Collins sided with Democrats to limit cuts to nutrition-assistance programs, but that effort failed. Sen. Dan Sullivan (R., Alaska) sided with Democrats on two amendments aimed at objecting to changes at the Social Security Administration.

Murkowski, Collins and Josh Hawley (R., Mo.) voted with Democrats in an attempt to strip out the House's potential Medicaid cuts. That fell short, but the split over Medicaid will return, and senators beyond those three have said they are wary of changes that could hurt people who rely on the health insurance program.

Republicans are pushing forward with Trump's tax plans just after the president announced steep tariffs on trading partners worldwide, which set off stock-market declines and sparked nervousness among congressional Republicans. They are eager to show progress on tax cuts, an issue where the party is largely on the same page with the president.

"We are united in making this proven tax policy permanent to provide the certainty that businesses need to make long-term investments that drive growth and stability for our families as they save and plan for the future," said Senate Finance Committee Chairman Mike Crapo (R., Idaho).

Republicans see the tax proposals -- new policies and extensions of expiring tax cuts -- as essential to economic growth. They are citing a White House analysis that projects a much larger economic bump from tax-cut extensions than do estimates from the Congressional Budget Office or the conservative-leaning Tax Foundation.

The combination of tax cuts and higher tariffs would shift the U.S. tax burden toward consumers at all income levels and away from upper-income households who pay much of the income tax.

Over the finish line

To get over the finish line, the House and Senate must agree twice -- sometime soon on a budget, then later this year on a detailed bill. They are using a fast-track process that allows them to dodge the Senate 60-vote filibuster threshold and pass the bill on simple-majority votes. Republicans have a 220-213 House majority and a 53-47 Senate edge, meaning they can lose only three votes in each chamber if all Democrats are opposed.

Republicans have stayed mostly united so far. Paul opposed the budget plan because he says a proposed debt-limit increase tied to the budget plan is too big. His attempt late Friday to reduce that $4 trillion or $5 trillion debt limit increase to $500 billion failed on a 5-94 vote.

The House could vote on the Senate's newly passed budget as soon as next week, a step that would formally kick off months of detailed negotiations on taxes and spending cuts.

There is, however, no guarantee the House and Senate can agree on a budget or again on an ultimate bill, and it may take repeated nudging from Trump to reach a final bill in what's known as budget reconciliation. Hard-right House conservatives are balking at endorsing the Senate's minimal spending-cut floors and higher debt limit.

Senate Majority Leader John Thune (R., S.D.) said any House attempt to change the budget would prolong the process.

"The sooner we get to reconciliation, the better," he said just after midnight Saturday.

The Senate plan would allow up to $5.3 trillion in net tax cuts over a decade. That is enough room to extend tax cuts scheduled to lapse Dec. 31, plus some version of Trump's plans to remove taxes on tips, overtime pay and Social Security benefits.

The Senate budget would lock in just $4 billion in spending cuts and aim higher in the actual bill. Senate Republicans who back significant spending reductions, including Rick Scott of Florida and Ron Johnson of Wisconsin, said they were comfortable advancing the budget now after getting White House assurances that Trump supports spending cuts.

Sen. Bill Cassidy (R., La.) said on the Senate floor that he was concerned about the rising national debt and displayed a chart showing the Senate plan making it increase faster. But he said he would support the budget because he worried that stopping it would increase uncertainty after the stock-market decline. Cassidy also said he got assurances that the subsequent bill would find ways to pay for the proposals.

The House, meanwhile, backs smaller tax cuts of $4 trillion to $4.5 trillion and calls for at least $1.5 trillion in spending reductions.

One of the biggest flashpoints ahead is Medicaid, the health-insurance program covering more than 70 million low-income and middle-income people. The House budget assigns most of its spending cuts -- $880 billion -- to the committee that handles Medicaid. Lawmakers have been talking about creating work requirements and reducing the federal government's share of costs, pushing more responsibility to states.

But some GOP senators are wary of Medicaid cuts. Hawley said he spoke with Trump on Thursday and that the president committed not to sign any bill that cuts Medicaid benefits.

Collins said the $880 billion target was a problem.

"I don't see how you can get to that amount without cutting Medicaid benefits," she said. "The last thing I want to do is to cut Medicaid for vulnerable people who are disabled or are seniors or cannot work."

Write to Richard Rubin at richard.rubin@wsj.com and Siobhan Hughes at Siobhan.hughes@wsj.com

(END) Dow Jones Newswires

April 05, 2025 02:44 ET (06:44 GMT)

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