Congress Passes FY2025 Budget Blueprint, Paving the Way for Tax Reforms

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On Thursday, April 10, the House of Representatives narrowly approved a budget resolution that lays the groundwork for extending key parts of the 2017 Tax Cuts and Jobs Act (TCJA) and advancing other major priorities, including fiscal reform, energy policy and national defense. Speaker of the House Mike Johnson and Senate Majority Leader John Thune vowed to include $1.5 trillion in spending cuts in the final bill.

This budget sets up the reconciliation process, allowing legislation to pass the Senate with a simple majority vote-sidestepping the usual 60-vote requirement. Supporters say the goal is to boost American manufacturing, support small businesses and drive domestic investment.

Republicans have signaled strong interest in implementing several fiscal priorities, including extending or making permanent the 20% pass-through business income exemption, continuing 100% bonus depreciation and preserving lower income tax rates.

For marine manufacturers, many of whom are structured as pass-through entities, the 20% deduction and full bonus depreciation would offer critical financial relief and encourage reinvestment in operations and equipment.

What's Next?

The passage of the budget resolution marks the beginning of the legislative process. Congress will now draft detailed legislation that reflects the priorities outlined in the blueprint. Reaching bicameral agreement on the final legislation may require a lengthy process requiring significant negotiations. According to Johnson, the House and the Senate will work collaboratively on a final bill. "We have bills drafted," he said. "Most of them have been scored already. Now we go through the process of marking it up and finding the equilibrium points with everybody so that all those interests are met."