House Passes Budget Framework, Advancing Trump’s Agenda and R&D Tax Relief Pathway

After months of intra-party wrangling, the House of Representatives passed a pivotal budget resolution last Thursday with a narrow 216–214 vote. The measure unlocks the fast-track reconciliation process and sets the stage for what Speaker Mike Johnson and former President Trump have dubbed “one big, beautiful bill” — a sweeping legislative package encompassing permanent tax relief, border security investments, energy policy expansion, and deep spending cuts.

Why This Matters: Permanent R&D Tax Fixes Now on Track

For U.S. innovators and tax professionals, the budget’s passage clears a critical hurdle for advancing long-awaited R&D tax provisions. Specifically:

• Full, Immediate Expensing of R&D Costs
• Elimination of the Section 174 5-Year Amortization Rule
• Clearer Long-Term Guidance for Strategic Tax Planning

The business community, particularly in high-growth and innovation sectors, has strongly supported the restoration of these provisions since the 2022 changes disrupted immediate deductions for research expenses.

A Balancing Act Between Growth and Fiscal Restraint

The House victory followed intense lobbying and a late push by GOP leaders to assure conservative holdouts that spending cuts would follow. Speaker Johnson emphasized that the resolution commits to at least $1.5 trillion in spending cuts, while still preserving essential safety-net programs — a position that helped sway skeptics like Rep. Andy Ogles (R-TN) and others in the House Freedom Caucus.

Senate Majority Leader John Thune stood beside Johnson at Thursday’s press conference to publicly reinforce Senate alignment. While he avoided locking in a specific dollar amount, Thune acknowledged the growing consensus around the $1.5 trillion goal, stating:

“We’re certainly going to do everything we can to be as aggressive as possible… not only making our federal government more fiscally sustainable, but also [pursuing] deficit reduction.”

This delicate unity between House and Senate Republicans will be critical as they now move into the legislative drafting phase.

What Happens Next?

Now that the reconciliation process is unlocked, Republicans will begin marking up the actual legislative components of the larger package. Here's what’s expected:

• Week of May 5: Tentative markup timeline for the House Ways and Means Committee, which will craft the core of the tax package.
• Legislative Coordination: House and Senate committees are being urged to closely collaborate, especially due to differing instructions between chambers.
• Debt Ceiling Deadline Pressure: With the CBO warning that the “X date” on borrowing could arrive as early as late May or June, lawmakers are racing to act before economic uncertainty intensifies.

The ultimate goal is to deliver a comprehensive legislative package — with tax cuts, spending reforms, and border investments — to President Trump’s desk before Memorial Day.

Looking Ahead

While key details remain fluid, the message from Washington is clear: tax relief is a top GOP priority, and bipartisan signals are aligning toward a restoration of R&D expensing under Section 174. ABGi USA will continue to monitor developments and provide timely updates and strategic guidance for clients navigating this evolving landscape.

Read more insights on R&D tax reform and Section 174 here.