As his second term begins, President Trump faces key fiscal deadlines.

President Donald Trump His second term began Monday, and his first year back in the White House is shaping up to be a big time in fiscal policy battles this year.

Fiscal issues facing the Trump administration and a narrowly Republican Congress this year include the debt limit, funding to avoid a partial government shutdown, expiring spending caps and considering tax cuts.

Trump didn’t discuss these issues in depth during his inaugural speech, and it’s unclear at this point how the White House and GOP lawmakers will proceed on issues like the debt ceiling, government funding and spending caps — which will require bipartisan support to pass. Both Houses of Congress.

The first of these issues came into focus on Tuesday as the US reached the debt ceiling and the Treasury Department began using “extraordinary measures” to continue paying the government’s obligations to avoid a default on the national debt.

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The debt limit was technically in place for two years until Jan. 2, 2025 — though a proposed transaction in the federal Medicare Trust Fund temporarily reduced the debt to create a primary that would last until Jan. 21. Then Treasury Secretary Janet Yellen announced on Friday that extraordinary measures would be implemented on Tuesday to prevent any disruption in federal debt payments.

It is unclear exactly how long the Treasury’s unusual measures will last in this case. The duration of extraordinary measures depends on the amount and timing of federal spending and the receipt of tax payments. While the extraordinary measures were recently in place, they were predicted to last anywhere from four-and-a-half months to seven or eight months — putting pressure on lawmakers to raise the debt limit before those measures expire.

As the debt ceiling debate plays out, the federal government faces another budget deadline this spring, with government funding ending at midnight on March 14 — setting up a race to avoid a partial government shutdown. In late December, then-President Biden and Congress agreed on a short-term continuation solution that would extend spending until that date at previously agreed levels to prevent a holiday shutdown.

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In the year In the second half of 2025, Congress and President Trump They must approve appropriations bills for the end of fiscal year 2025 and for fiscal year 2026, which begins on October 1.

In the year The end of 2025 also marks the end of spending limits imposed under the bipartisan Fiscal Responsibility Act in 2023, which also contained the latest debt ceiling ban. Although the bill included a list of spending limits for the next four years, they were non-binding and intended as optional guidance.

One of the most important deadlines is the expiration of several key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) at the end of 2025 — the historic tax cut package that Trump and congressional Republicans passed in his first term.

Lawmakers used the budget reconciliation process to pass the legislation, which allows it to bypass the Senate’s 60-vote legislative filibuster but contains limits on long-term budget deficit increases. To comply with those rules, Congress often waives specific policies so as not to raise deficits beyond what the final draft process allows.

The federal deficit will continue to grow, and the Congressional Budget Office has solutions.

Among the key provisions of the expired tax code are revised tax brackets that are reduced at certain income levels. The law also raised the standard deduction used by most taxpayers to reduce their tax burden from $6,500 to $12,000 for individual taxpayers and from $13,000 to $24,000 for couples filing a joint return.

The TCJA doubled the child tax credit from $1,000 to $2,000 per child, expanded the availability of additional child tax credits and phased out the child tax credit so that more households were eligible to claim it.

To offset the tax cuts and expansion of certain tax credits, the TCJA lowered the state and local tax (SALT) deduction to $10,000—another way it expires at the end of the year. The SALT deduction allows taxpayers filing their returns to reduce the income and property taxes assessed by state or local governments up to the limit and is popular with taxpayers from relatively high-tax states.

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The dire fiscal deadline that awaits policymakers in the coming months comes as the nation’s fiscal situation has worsened in recent years.

As America’s population ages, spending on entitlement programs like Social Security and Medicare is a long-term trend that shows no signs of abating.

That has worsened since the start of the Covid-19 pandemic after the Federal Reserve prompted interest rates to rise, prompting a rapid increase in the cost of servicing the already growing national debt of more than $36 trillion.

Interest costs rose sharply, making the cost of paying interest on the debt the second-highest federal outlay after spending on Medicare and Defense exceeded the previous year’s total.