The House defeated the bill with 235 votes against, 174 votes in favor. Speaker Mike Johnson faced a major setback as his revised funding bill to avert a government shutdown failed in the House yesterday, despite backing from President-elect Trump and Elon Musk. The proposal, which included a two-year debt ceiling suspension and over $100 billion for disaster relief, was rejected as Democrats, frustrated by GOP infighting and last-minute changes, withheld support, while 38 Republicans also voted no. With the shutdown deadline looming and internal divisions deepening, Johnson must scramble for a new solution.

CBO analyzes tariff policies proposed by incoming Trump administration. The Congressional Budget Office (CBO) evaluated the economic and budgetary effects of imposing a permanent 60 percent tariff on Chinese imports and a 10 percent tariff on all other imports, with the assumption of retaliatory tariffs on US exports, and cautions that its projections are highly uncertain, given the lack of historical precedent for tariffs of this magnitude. The CBO projects an initial one-point increase in inflation by 2026, with poorer households facing the largest loss in purchasing power due to higher spending on goods. While the tariffs are expected to reduce GDP by up to 0.6 percent over the next decade, the agency estimates a potential $2.7 trillion reduction in the federal deficit, which could boost private investment and partially offset the economic slowdown. But businesses may delay investments, and supply chain adjustments could add costs. 

Senate nears advancement of Social Security Fairness Act amid cost concerns. The Senate is nearing a final vote on the Social Security Fairness Act, a bipartisan bill that would increase Social Security benefits for about 3 million public sector workers by repealing the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). These decades-old rules reduce benefits for individuals with public sector pensions. While the Senate advanced the bill with a 73-vote majority, critics, including Sen. Thom Tillis, highlighted its $196 billion cost over 10 years and its potential to accelerate Social Security insolvency by six months.

TPC shows who benefits and who loses from extending major provisions. TPC’s Margot Crandall-Hollick and Joe Rosenberg unpack how extending each of the TCJA’s major provisions would affect taxpayers in different income groups. The key takeaway of the TPC analysis: Specific provisions of the TCJA have very different distributional effects depending on a household’s income level.

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