The U.S. Senate has moved forward with President Donald Trump’s tax cut agenda and an increase in the national debt ceiling, potentially providing some stability to financial markets unsettled by recent tariff policies. Bloomberg reports that the Senate passed the budget resolution with a 51-48 vote, allowing Republicans to draft legislation to extend Trump’s 2017 tax cuts for individuals and closely held businesses, set to expire at the end of 2025.

Read also: Trump’s Tariff Blitz Adds to Global Shipping Turmoil

The resolution also permits $1.5 trillion in new tax cuts over the next decade and proposes a $5 trillion increase to the federal borrowing limit, aiming to prevent the Treasury Department from hitting the debt ceiling this summer. According to data from the IndexBox platform, this move could impact various sectors, including consumer goods and manufacturing, as businesses anticipate potential changes in tax obligations.

However, the budget resolution has sparked a debate over spending cuts, with the Senate proposing only $4 billion in reductions over a decade, significantly less than the $2 trillion initially envisioned by the House. This discrepancy has led to tensions between House and Senate Republicans, with some fiscal conservatives expressing dissatisfaction over the lack of substantial spending cuts.

As the resolution heads to the House, Speaker Mike Johnson faces the challenge of uniting his party to pass the measure, with some members advocating for more significant spending reductions. The final tax package is expected to be enacted between May and August, contingent on adherence to the budget resolution’s rules, allowing it to pass with Republican votes alone.

Source: IndexBox Market Intelligence Platform