Four big deadlines in 2025 that will put Congress and Trump on a collision course

With control of the White House and both chambers of Congress, the GOP will wield its leverage as it seeks to make key policy changes from the Biden administration. However, lawmakers must also grapple with major 2025 deadlines crucial for funding the government and other high-stakes issues. 

Here are four of the biggest deadlines Congress must juggle in next year’s new session. 

1. Debt Ceiling 

Chief among lawmakers’ to-do list is the nation’s debt limit, which will be reinstated on Jan. 2 after the threshold was raised by then-House Speaker Kevin McCarthy (R-CA) and President Joe Biden in the summer of 2023. 

Raising the debt ceiling is crucial for the country to continue borrowing money to pay off its existing debts and financial obligations. But once that limit is reinstated next year, it will force the Treasury Department to use the cash it has on hand until either it runs out or the ceiling is once again lifted. 

Lawmakers won’t need to deal with the limit right away as it’s not yet clear when the so-called “X date” will be. That date is the projection when the United States will no longer be able to pay off its loan payments and a default could occur, likely resulting in a global economic spiral. 

The U.S. has never failed to pay back its loans, and both parties want to avoid a default at all costs. However, reaching an agreement often takes weeks of negotiations and is usually not solved until the last minute. 

Those negotiations especially dragged out in 2023 when some conservative members of the GOP-controlled House threatened to tank any deals with the Democratic-led Senate and White House unless significant spending cuts were made. 

It’s unclear whether similar fights will occur this time, as Republicans will have control of the White House and both chambers of Congress. However, House GOP leaders will have the slimmest of margins to work with when members are sworn in on Jan. 3, giving them no room for error. 

2. Sequestration

Congress will have an April 30 deadline to pass a Fiscal Year 2025 budget to avoid mandatory sequestration cuts of 1% to defense and nondefense funding levels as part of a 2023 bipartisan debt-limit agreement. Most mandatory programs like Social Security are exempt. 

The deadline is technically in January, according to the Committee for a Responsible Federal Budget, but the penalties do not take effect until May.

The federal government is currently operating on a so-called continuing resolution with Fiscal Year 2024 spending levels as Republicans grapple with whether to strike a deal with Democrats and pass a 2025 budget or try to punt into the new administration and Congress. The government is set to shut down on Dec. 20 unless additional funding is approved. 

3. Trump Tax Cuts

Lawmakers must reckon with if and how long to extend tax cuts implemented by the first Trump administration in 2017 totaling $3.3 trillion. Those cuts are projected to expire by the end of 2025. 

It’ll be one of the biggest tasks for the new Congress, and it could risk major tax hikes if it is not dealt with before the deadline. 

House Republicans are already planning to make those tax cuts one of their top priorities in Trump’s first 100 days in office, although it’s not yet clear how long the extension would be. 

There is also a desire among some for a longer-term solution, with House Majority Whip Tom Emmer (R-MN) previously telling the Washington Examiner there may be talk “about making the Trump tax cuts permanent.” 

To do so, Republicans are looking to use a procedure known as budget reconciliation to advance their agenda and circumvent their Democratic foes in the Senate. Reconciliation needs only a simple majority and does not require the 60-vote filibuster threshold. 

But in a major warning to fellow conservatives, Sen. Thom Tillis (R-NC), who sits on the Senate Finance and Banking Committees, didn’t believe the votes currently existed in the GOP’s narrow majorities to pass a tax bill or new spending through reconciliation unless they can woo over unnamed deficit hawks. He also noted any GOP lawmaker’s increased leverage to make other demands. 

“It’s infinitely more complex to get a reconciliation outcome in this cycle,” Tillis said. “The key is going to be addressing all these coalitions that are likely going to threaten an insufficient number of votes unless they get their priorities.”

He foreshadowed that Trump will need to be a “very, very important part of the process” and that the GOP’s past arguments that tax cuts are paid for by growing the economy won’t cut it this time around.

“I’ve heard more than three people say that they won’t vote for a tax package that’s not fully offset,” Tillis added. 

4. Obamacare subsidies

Also expiring at the end of 2025 are increased and expanded health insurance subsidies for the Affordable Care Act, known as Obamacare.

The boosted subsidies for monthly health premiums were put in place by Democrats under President Joe Biden’s American Rescue Plan and extended in the Inflation Reduction Act, only through 2025. The pandemic-era enhanced financial help lifted the household income cap to qualify for subsidies above the 400% federal poverty line threshold. 

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

With a 10-year price tag of $335 billion, Republicans will put them on the chopping block. The party says major changes are in store for the Obama-era law under Trump’s second term, with Republicans ready to move on from years of failed attempts to repeal it entirely.

“The ACA is so deeply ingrained that we need massive reform to make this work,” House Speaker Mike Johnson (R-LA) said in the days before the elections. “We got a lot of ideas on how to do that.”