The next market focus of "Trump 2.0," is the timeline at the end of May?

The Republican leadership is close to reaching an agreement to extend Trump's 2017 tax cuts by the end of May, with an increase in the debt ceiling included as part of the bill.

On March 26, Bloomberg reported that Republican leaders stated they are nearing consensus on extending Trump's 2017 tax cuts and raising the debt ceiling, with Congress hoping to approve this economic plan by the end of May.

House Speaker Mike Johnson said, "I don't want to get ahead of the Senate too much, but it sounds like we won't be too far apart, which is a good thing, so we will be able to move forward."

Johnson noted that the Senate is "gradually accepting" the increase in the debt ceiling as part of the legislation. Senate Majority Leader John Thune believes that "consensus is forming" around the debt ceiling plan, which has previously been a major obstacle between the two chambers for weeks.

The Republicans hope to achieve a legislative victory to calm the markets shaken by Trump's tariff policies. "We need to bring stability to the markets," Johnson stated, adding that negotiators need to provide certainty so that people can "make decisions about expanding their businesses and jobs."

Despite the positive attitude from leadership, significant divisions remain within the Republican Party. A plan approved by the House earlier this month called for raising the debt ceiling by $4 trillion as part of tax legislation, while Senate Republicans have been slow to accept this.

At least two senators—Josh Hawley of Missouri and Tommy Tuberville of Alabama—have expressed their opposition to the House plan, as it could cut Medicaid and other health programs used by their constituents. Kentucky Republican Senator Rand Paul stated that he would never vote in favor if the tax plan included an increase in the debt ceiling.

Including the debt ceiling in the tax bill puts pressure on the Republicans to pass legislation before the government is unable to pay its bills on time. Economists expect this situation to arise this summer or early fall unless Congress intervenes.

There are also dissenting voices in the House, where Republicans hold an extremely slim majority. Arizona Republican Congressman David Schweikert has repeatedly warned that the tax bill should be offset by spending cuts or other revenue-generating measures to reduce the federal debt burden. This view is not particularly popular among Republican leadership.

To pass the tax plan by the end of May, negotiators from both the House and Senate will need to reach an agreement on a joint proposal. Thune has set the week of April 7 as the deadline for the Senate to pass a budget resolution outlining the tax cuts.