U.S. President Donald Trump touted the passage of a Senate budget blueprint Friday and said the deal would be the precursor to the biggest tax cuts in American history.
Senate lawmakers voted largely on party lines late Thursday to pass a fiscal 2018 budget resolution that will likely be supported by Congress and could pave the way for tax cut legislation in the coming months. The Thursday agreement also includes a mechanism which will enable the tax code to be re-written on the basis of a simple majority vote in the chamber, as opposed to the 60 votes needed at present. Republicans hold 51 of the 100 seats in the Senate, against 49 held by Democrats.
“This resolution creates a pathway to unleash the potential of the American economy through tax reform and tax cuts, simplifying the overcomplicated tax code, providing financial relief for families across the country, and making American businesses globally competitive,” the White House said in a statement.
Analysts at Goldman Sachs wrote late last month that the Senate proposals could translate to around $1.5 trillion in tax cuts that are spread over the next ten years, and equivalent to around 0.6% of current GDP.
Nonetheless, the Senate’s passage lifted global stocks overnight and pushed benchmark 10-year U.S. government bond yields 4 basis points higher to around 2.37%, the highest in a month, and lifted the dollar index 0.2% higher against a basket of six global currencies to 93.52 in early European trading.
Wall Street futures are also trading higher, indicating a 81 point gain for the Dow Jones Industrial Average and a 4.75 point, or 0.2% advance, for the broader S&P 500.