Spending, Tax Cuts, Drugs, Grocery Prices, War and China Still Dominate Agenda
Ready or not, 2025 is here. There will be new leaders in Washington but they will be facing old problems. Big promises have been made but realities remain the same.
Donald Trump returns to the White House. Republicans gained control of the Senate and nominally retained control of the House. The issues they will face remain unchanged – spending levels, tax cuts, post-pandemic grocery prices, border security, Chinese competition and raging wars in Ukraine and the Middle East. Homelessness and a lack of affordable housing remain major concerns.
Political tensions also remain high over reproductive health, the abortion pill and gender-affirming care. New concerns are emerging over the use of psychedelic drugs to address PDST and other mental illnesses.
One of the first dramas in the new Congress will be confirmation hearings for Trump Cabinet appointees, several of whom are controversial, One of his picks already dropped out. Others are addressing concerns about vaccine skepticism, ties to Russia and excessive drinking. No one has voiced concern about Trump appointing his criminal defense team to top jobs at the Department of Justice.
Trump will introduce a new wave of issues – mass deportation of undocumented immigrants, higher import tariffs, reversing Biden environmental policies, eliminating taxes on tip income, seizing the Panama Canal, laying claim to Greenland and invading Mexico. His “Department of Government Efficiency” has been tasked with trimming $2 trillion in federal spending.
A lone gunman triggered a new wave of public discontent with private health insurance when he gunned down a top healthcare executive in downtown New York. The gunman faces state and federal murder and terrorism charges. The health insurance industry faces greater scrutiny.
Other factors in play include political unrest in Canada, Germany, France and South Korea and looming expiration of the last remaining international anti-nuclear pact. Other than Trump fantasizing about pushing the red button, it’s unknown how he will deal with global nuclear competition even as more nations pursue nuclear ambitions.
Online political discourse has become even more toxic as liberal combatants abandon Elon Musk’s X and, following Mark Cuban’s advice, join the new rival platform Bluesky, which was started by Twitter co-founder Jack Dorsey. Trump uses his Truth Social platform to announce policies and pummel opponents.
Closing Out 118th Congress
The final days of the 118th Congress signaled problems that will face the 119th Congress when sworn in on January 2. Because of a narrow majority in the House, a stopgap funding bill went through three iterations before passing just before a midnight deadline Saturday to avoid a pre-holiday government shutdown.
The GOP majority in the House will be even narrower at the start of the new Congress until three departing Republicans (two are Trump Cabinet choices) are replaced in elections this spring. As the stopgap funding issue revealed, the House GOP caucus has at least 37 members who won’t necessarily fall in line with Speaker Mike Johnson – or President Trump.
The stopgap spending measure, which passed without raising or eliminating the debt limit as Trump requested, expires next March, which could lead to a redux of what happened in this Congress.
One of the casualties was the Rural Schools and Community Self-Determination Act that would have reauthorized $80 million for rural schools, roads and wildfire prevention. The 24-year-old statute that enjoys bipartisan support passed the Senate in November but never came a vote in the House after it became tied up in a political dispute over healthcare spending.
Congress did manage to send a Pentagon spending bill to President Biden. And the Senate quietly approved funding for pediatric cancer research after it was dropped from the stopgap spending measure. The House had previously approved the expenditure.
President Biden signed a batch of bills on Christmas Eve including ones to protect teenagers living in residential treatment facilities, set anti-hazing standards on college campuses and prevent members of Congress from collecting pensions if convicted of crimes related to public corruption. He also signed the bill designating the bald eagle as the national bird.
Biden gained more media notice for commuting the death penalties for 37 federal prisoners to life in prison without parole. He vetoed a bill to create 66 new federal judgeships.
The 2017 Trump Tax Cut
High on Trump’s new year agenda will be extending and perhaps expanding the tax cut he pushed through in 2017 that expires in 2025. Incoming Republican Senate Majority Leader John Thune has recommended pushing tax legislation off the calendar until later in the year. Speaker Johnson appears more eager to move on it sooner than later.
Senate and House Democrats are likely to oppose the tax cuts that favor the wealthy and corporations. That could change depending on what else is added such as an end to taxing tips or Social Security income.
The most formidable obstacle is how much the tax cut will reduce federal revenue and accelerate increased debt. The 2017 tax cut reduced federal revenue by $2 trillion. Extending it would potentially double that revenue loss. That prospect is likely why Trump pushed to eliminate the debt ceiling in the year-end stopgap funding measure.
Trump Initiatives
Trump has promised to start mass deportations of undocumented immigrants on day one of his presidency. That may be overly optimistic because of the enormous cost of deporting millions of people and the slog it would take in Congress to authorize the necessary spending. Trump also has mentioned restarting construction of his southern border wall.
He also promised to unleash billionaires Elon Musk and Vivek Ramaswamy to recommend how to slash trillions in federal expenditures. Musk used his X platform to lambast the bipartisan stopgap spending deal, which led House Republicans to trash the compromise. What finally passed had far fewer pages, but basically the same spending level.
Trump may be on firmer executive ground when keeping his promise to impose higher import tariffs, even though there is growing pushback about resulting disruption and job loss that might be triggered. Economists warn higher tariffs could reignite inflation. Based on history, the action could trigger a destabilizing trade war.
Trump has pledged to stop the war in Ukraine, and he may be forced to deal with the fallout of rebels gaining control of Syria. In recent speeches, Trump, perhaps projecting himself as a new Thomas Jefferson purchasing Louisiana, has threatened to seize the Panama Canal to lower shipping rates, invade Mexico to battle drug cartels and obtain Greenland because it contains 20 percent of the world’s rare minerals. He also suggested Canada should become the 51st U.S. state as he mockingly referred to the Prime Minister as Governor Trudeau.
Serious Emerging Issues
Military readiness is creeping to the top of the national to-do list as the number of global hotspots grows. Russia’s invasion of Ukraine is entering its third year and has morphed into a proxy war between Western nations and the new axis of Russia, China, Iran and North Korea.
Flashpoints include Chinese aggression against Taiwan and The Philippines, Iran’s response to Israel’s degradation of its proxies, increasing North Korean belligerence, economic unrest in Lartin America and ceaseless civil war in Africa.
Trump wants to restrict America’s role as the world’s policeman, but he also has stressed “peace through strength”. The question will be whether Trump 2.0 chooses to prepare for war or engage diplomatically to prevent war. An early test may be renewing diplomacy with Iran, which has been weakened by Israeli attacks on its proxies in Gaza and in Lebanon.
Global competition has extended to space. More than 70 nations have space agencies, 16 have launched their own spacecraft and 22 have the capacity to launch missiles. Only the United States, China and Russia have sent humans into space. The next major objective for NASA is returning humans to the moon as a prepatory step to sending humans to Mars.
Western European nations, Japan and India align with the United States and NASA on space efforts. There is another working bloc consisting of Eastern European nations, Mexico, Vietnam, Cuba and Venezuela. China, North Korea, Iran and Canada appear to be moving forward on their own.
Cybersecurity has emerged as a top concern in light of increasingly sophisticated cyber attacks and cyber spying. The issue is tied to concerns over online privacy and cyber theft. The future of artificial intelligencefalls into a similar bucket as AI assistants and services proliferate before regulatory ground rules can catch up.
The cost of healthcare and health insurance haven’t ever receded to the political background, but may be headed for the spotlight again under a Trump presidency. As he did in his first term, Trump has teased about having a grand new plan. During his 2024 campaign, he said his team was working on some ideas.
The closest any Team Trump member came to disclosing an idea was when JD Vance advocated for cheaper health insurance plans for young, healthy adults. That prompted sharp responses about how separating the healthy from older adults would result in much higher insurance costs with pre-existing health conditions – one of the problems addressed by the Affordable Care Act.
Data indicates that 150 million Americans are enrolled in Medicare or Medicaid, which makes them a target for cost-cutting. Defenders of the programs say the focus should be on combating fraud and abuse. Health care concerns also exist for programs serving U.S. military personnel, veterans and Native Americans.
