In a largely bipartisan 357-70 vote, the US House of Representatives passed a $78 billion tax bill on Wednesday. The bill is being called the Tax Relief for American Families and Workers Act of 2024 and includes a child tax credit expansion and reinstates business deductions that were rescinded during the Trump administration. It now goes to the Senate for a vote.

Maya MacGuineas, President of the Committee for a Responsible Federal Budget, joins Yahoo Finance to discuss the bipartisan tax bill and what should be added to the bills to better help Americans.

MacGuineas elaborates on the nature of the bill: "We have seen temporary tax policies used as a gimmick for many, many years, and it's getting worse, not better. That's definitely part of this bill, which will be paid for on a temporary basis. If you look at those policies... the cost of the bill could be as high as almost $650 billion over a decade. So, I think we have to look at the actual intentions of the policies and understand that by sort of gimmicking them through certain time windows, we really could be putting huge amounts of pressure on the budget and in the next couple of years at a time where we ill afford to do so because of the huge debt we already have."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video Transcript

[AUDIO LOGO]

AKIKO FUJITA: Well, the House passing a $78 billion tax bill late Wednesday, putting Congress closer to expanding that child tax credit. The bipartisan bill is expected to help millions of low-income households, but it also provides key tax breaks to businesses and now heads to the Senate. Let's get to our next guest, Maya MacGuineas, Committee for a Responsible Federal Budget president, to discuss more. Maya, good to talk to you today. I can't help but note the vote here, approved by a vote of 357 to 70. It's not often you get bills like that today in such a polarized environment. What's your read on this bipartisan bill and its fate in the Senate?

MAYA MCGUINEAS: It is not often that you get to bills that have bipartisan support like that at all. And when you do, they are almost always debt-financed. So one of the notable things about this is that this bill is actually offset. They have made the point that our debt is so large that new policies, whether it's spending or tax, should be offset so that they don't add to the debt so that's even further progress.

There's still a couple of reservations I would point out about the bill, which is temporary tax policy is not the right way to do tax policy. What we really need is more certainty. But I think it does have broad-based support. And it may well pass in the Senate. There's not quite as much support there so far. There's still some reservations. But I think we could see this bill move forward and possibly become law by paring the child tax credit with some business credit tax-- some business taxes that are otherwise expiring or expired.

- And Maya, as we look out in terms of what's not potentially being extended further, what sort of costs are we looking at there? Because I know that you noted that some of it might be understated at this point.

MAYA MCGUINEAS: Yeah, exactly. So on one hand, I think it's really good that they made the effort to pay for this bill. On the other hand, we have seen temporary tax policies used as a gimmick for many, many years. And it's getting worse, not better. And that is definitely part of this bill, which would be paid for on a temporary basis. But if you look at those policies, which everybody intends to make permanent-- their supporters all do. The cost of the bill could be as high as almost $650 billion over a decade.

So I think we have to look at the actual intentions of the policies and understand that by gimmicking them through certain time windows, we really could be putting huge amounts of pressure on the budget in the next couple of years at a time where we can ill afford to do so because of the huge debt we already have.

AKIKO FUJITA: Maya, you put out a statement yesterday on the back of this tax deal but also talking specifically about the potential expansion of the SALT deduction cap and your concerns coming along with that. Walk me through that and how you view that in the context of just where the federal deficit is today.

MAYA MCGUINEAS: Yeah, that's right. I mean, so SALT is a very contentious issue because it affects people very differently, depending on the states they are in. And there has been a strong, strong push by people in high income tax states to do something about SALT. SALT was a really important policy that helped offset a tiny bit of the Trump tax cuts. They were clearly not offset. They added trillions of dollars to the national debt. But SALT was one of the really important pay-fors that was part of that. And there's been pressure ever since to undo it.

We have real concerns about doing that in a way that would, again, add to the fiscal gap that we already have, and in a way that's also inefficient and highly regressive tax policy. So if we end up having that portion of the bill, or as a sidecar, pass, which I'm less-- I don't think it's going to. It's going to be a very large tax cut for the wealthy. And again, here's the fiscal situation we're facing. We are facing a country that has not passed a budget for the year that we are already one third of the way through, has debt that's about to reach record levels and interest payments that are the fastest-growing part of the budget.

We cannot be adding more to the debt, particularly in a period of high inflation. We should be bringing it down. So I have grave concerns about anything that would make the fiscal situation worse. By the way, we should actually focus on passing a budget before we do anything on tax policy. That should be the first step for any country, business, and certainly for the United States.