The U.S. Senate passes budget resolution, Trump's tax cuts plan gets "key breakthrough"

The U.S. Senate narrowly passed a key budget resolution, clearing the way for the continuation of the Trump era tax policies and a significant increase in the debt ceiling. After a marathon "marathon-style" vote, the U.S. Senate passed a resolution titled "budget reconciliation" in the early hours of Saturday by a slim margin of 51-48. Two Republican senators, Susan Collins and Rand Paul, joined the Democratic camp in voting against it. The resolution will be sent to the Republican-led House of Representatives for consideration next week. The strategic significance of this budget resolution lies in unlocking the "budget reconciliation" mechanism, which will allow Republicans to bypass the Senate's filibuster rule. Through this process, Republicans can pass Trump's tax, border security, and military priority bills with a simple majority, without Democratic support. The passage of this resolution signifies an important step towards Trump's tax agenda and raising the debt ceiling, easing market uncertainties caused by Trump's trade policies and avoiding a potential debt ceiling crisis this summer. Fiscal suspense: Tax increase risks and debt issues Republicans warn that allowing the 2017 tax cuts to expire would result in a 22% increase in the average taxpayer burden. It is worth noting that part of the 2017 tax cut law, which reduced the top corporate tax rate from 35% to 21%, will not expire, while the individual tax cut part will expire. However, nonpartisan analysts point out that if Trump's agenda were fully implemented, it would increase federal government debt by about $5.7 trillion over the next decade. Senate Republicans argue that the cost is only $1.5 trillion, as they believe the impact of extending existing tax policies should not be included in the measure's cost. Market background: Trade policy shadows and economic uncertainty This debate is taking place against the backdrop of the market sell-off triggered by Trump's new trade tariffs policy. Economists warn that these tariffs will raise prices and may trigger an economic recession. Republican Senator Thom Tillis expressed his concerns to reporters, saying, "If we're still having this type of conversation three weeks from now, the distraction will be so great that it will slow down what we're trying to do." Democratic opposition: Republicans siding with the wealthy Senate Democratic leader Chuck Schumer harshly criticized after the vote, saying, "Trump betrayed the American people. Tonight, Senate Republicans joined in this betrayal. By voting for this bill, Senate Republicans stood with billionaires, opposing the middle class." Democrats warn that Republican goals will jeopardize healthcare assistance programs for low-income Americans. During the six-hour "vote marathon" meeting, Democrats proposed dozens of amendments aimed at repealing Trump's trade tariffs and protecting healthcare assistance, Medicare, and other social safety net programs, but all were rejected. For investors, the outcome of this political game may become clearer before the summer of this year, as the conversion of this budget resolution into an actual law will directly affect the direction of U.S. fiscal policy and market performance.