President Trump faces key financial deadlines as he begins his second term

the president Donald Trump's His second term began on Monday, and his first year back in the White House will be marked by a series of fiscal policy battles with deadlines looming this year.

Among the financial issues that the Trump administration and the narrow Republican majority will face in Congress this year include the debt limit, financing the government to prevent a partial shutdown, along with the review of whether to extend the expired spending cap and Tax reduction.

Trump did not address these issues in depth in his inauguration speech, and it is unclear at this time how the White House and Republican lawmakers will proceed on issues such as the debt limit, the government budget and the spending cap — which require bipartisan support to pass. will do Both chambers of Congress

The first of those issues came into focus on Tuesday as the US reached the debt ceiling and the Treasury Department began using its “extraordinary measures” to continue paying government obligations to avoid a national debt default.

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The debt limit was roughly two years until Jan. 2, 2025, when it would technically be reinstated — though a planned transaction in a federal Medicare trust fund temporarily reduced the debt to create a window that lasted until Jan. 21. The then Treasury Minister Janet Yellen It announced on Friday that extraordinary measures to prevent any disruption to the federal debt service will take effect on Tuesday.

It is not clear exactly how long Treasury extraordinary measures In this case it will last. The duration of extraordinary measures depends on the size and timing of federal expenditures, as well as the receipt of tax payments. In recent instances where extraordinary measures have been taken, they have been expected to last anywhere from four and a half months to seven or eight months – and pressure has mounted on lawmakers to raise the debt ceiling before those measures run out.

While the debt limit debate rages on, the federal government faces another fiscal deadline this spring, with the government's budget due at midnight on March 14 — setting up a race to avoid a partial government shutdown. In late December, Biden, then president And Congress agreed on a short-term resolution that would have extended spending at previously agreed-upon levels through that date to avoid a shutdown during the holidays.

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In the second half of 2025, Congress and President Trump It will face the end of fiscal year 2025 and the need to pass appropriations bills for the upcoming fiscal year 2026, which begins on October 1.

The end of fiscal year 2025 will also mark its expiration Cost ceiling That was enacted under the Bipartisan Fiscal Responsibility Act of 2023, which also included the latest suspension of the debt limit. Although the law contained an outline of fee caps for the next four years, they were non-binding and intended as a discretionary guideline.

One of the most important deadlines is at the end of 2025, with the expiration of several key provisions of the Tax Cuts and Jobs Act (TCJA) of 2017 — Trump's landmark tax cut package and Congressional Republicans He was approved in his first term.

Lawmakers used the budget reconciliation process to pass the legislation, which allows it to bypass the Senate's 60-vote rule, but has long-term limitations. Budget deficit increases To comply with these rules, Congress often adopts specific policies to prevent the final bill from increasing the deficit beyond what the process allows.

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Among the most important rulings of the tax law that are expiring, we can mention the amendment of tax categories that were reduced at some income levels. The law also doubled the standard deduction used by most taxpayers to reduce their tax burden, from $6,500 to $12,000 for individual taxpayers and from $13,000 to $24,000 for married couples filing a joint return. give

particle for direct object Child tax credit It was also doubled by the TCJA from $1,000 to $2,000 per child, while also expanding the availability of the additional child tax credit and increasing the phase-out of the child tax credit so that more households are eligible.

To help offset the tax cuts and expand certain tax credits, the TCJA lowered the state and local tax (SALT) deduction limit to $10,000—another provision that expires at the end of the year. The salt deduction allows taxpayers who itemize their returns to deduct up to the maximum amount of income and property taxes assessed by state or local governments and is popular among taxpayers in relatively high-tax states.

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A daunting list of fiscal deadlines awaits policymakers in the coming months as the country's finances have become increasingly strained in recent years.

Cost increases in entitlement programs such as social security And in the midst of an aging American population, Medicare is a long-term trend that shows no sign of abating.

which has intensified since then covid pandemic It followed a period of historic inflation that encouraged the Federal Reserve to raise interest rates, which made the growing cost of servicing the more than $36 trillion national debt rise even faster.

Interest costs have risen so much that the cost of paying interest on the debt surpassed federal spending on Medicare and defense last year, making it the second largest category of federal spending.