Trump’s Budget Approved with Narrow Margin, Remittance Tax Included
President Donald Trump’s massive budget for the United States in 2026, which includes a 3.5% tax on remittances received in Mexico and worldwide, has been approved by the House of Representatives. The approval came with a narrow margin of 215 to 214 votes, indicating the contentious nature of the budget.
What Does This Mean?
The remittance tax remains vulnerable to potential cancellation in the Senate, as the budget proposal will likely face opposition from those who disagree with it. The process leading to this budget is expected to be lengthy, challenging, and tedious for all parties involved.
For Americans, this budget signifies future hardships due to significant cuts in government services for the underprivileged. However, many Americans may not be concerned about the remittance tax since they perceive it as a burden for foreigners. Consequently, there might not be widespread protests regarding this tax.
For Mexico and the global community, this budget implies drastic changes to US immigration laws. The treatment of undocumented immigrants will likely become harsher and more stringent, with long-term implications.
The Reconciliation Process
Following the House approval, the budget now moves to the Senate under a parliamentary process known as “Reconciliation.” This process aims to reconcile the language and concepts used by legislators in both chambers of Congress, eliminating discrepancies in budget descriptions.
This year, the Reconciliation process is particularly crucial as it eliminates dilatory tactics from an additional process called “Filibustering,” which senators use to derail, distort, and ultimately eliminate legislative proposals they oppose. Under normal Senate rules, a single member can obstruct debate, requiring 60 out of 100 votes to silence them.
However, when debating a budget under the Reconciliation process, the rules only require a simple majority of 51 votes for approval. With 100 senators, the majority vote is half plus one.
Why the Delay?
The primary reason for the delay is that the US fiscal year, governing the federal government’s budget, begins on October 1st. The 2025 fiscal year ends on September 30th, giving ample time for the budget process.
In a letter to senators on May 2nd, the presidency stated:
- “The 2026 Budget proposes unprecedented increases for defense and border security. For Defense, an annual 13% increase to surpass $1 trillion; and for National Security, a historic investment of $175 billion. This will ensure complete border security.”
- “$325 billion in the budget resolution would be financed through the Reconciliation process.”
Ironically, the cost of border surveillance in this budget will be borne by both legal and illegal immigrants, as government immigration-related fees skyrocket.
Budget’s Impact on Immigrants
The Reconciliation process includes burdensome charges specifically targeting the migrant population in the US:
- Applying for immigration status will now cost hundreds of dollars.
- Prohibitions against undocumented workers receiving public assistance will be renewed.
- The remittance tax, a significant concern for Mexico and the global community, will be included.
Surprisingly, many US legislators were unaware of the remittance tax proposal. This lack of knowledge among lawmakers, both Republican and Democrat, led to the eventual reduction of the tax from 5% to 3.5%. Some senators were even opposed to incorporating the tax into the budget.
Moreover, Americans are largely uninformed about the actual border security expenditures. Despite five months of reduced migrant volumes, Trump intends to spend heavily on border security.
The English-language US press has largely overlooked the remittance tax proposal, which is surprising given Trump’s plan to allocate over $160 billion through the Department of Homeland Security (DHS) for new surveillance equipment and thousands of new immigration and border patrol agents over the next four years.
The vague descriptions of expenditures in the budget allow President Trump to allocate funds according to his preferences, a tactic he employed during his first presidency.
Previously, I reported that the US plans to spend $46.5 billion on constructing new border barriers that have never existed between Mexico and the United States.
The budget triples spending on detaining irregular immigrants. New detention centers will house those apprehended attempting to enter the US and those already living in the country.
In 2024, ICE’s detention budget was $3.43 billion. By 2026, it will triple to over $9.3 billion annually for the following five years, starting from 2025.
In 2024, this budget funded the simultaneous detention of 41,500 migrants across various states. This number will also triple.
It’s hard to think of another country in history with such massive detention levels of foreigners. These private immigration prisons, owned by individuals with connections in government and Congress, charge over $200 per day per detainee and also hold those awaiting deportation.
ICE has already requested proposals from contractors for new detention facilities. Adding another $3 billion to the Office of Refugee Resettlement’s budget for detaining unaccompanied minor migrants who arrive at the border completes the picture.
There will also be $15 billion for increased deportations. The budget increase includes:
- $14.4 billion for transportation and expulsion of foreigners
- $500 million for expulsion through land borders
- $100 million for repatriation of unaccompanied minor immigrants
The US has been facing a shortage of ICE agents for years, with over 22,000 vacancies. To address this, the 2026 budget proposes spending $16.2 billion on hiring new immigration agents across ICE, CBP, and the Border Patrol.
The budget allocates $8 billion for hiring and salaries of 10,000 new agents. Furthermore, it includes $4.1 billion for hiring 3,000 new Border Patrol members, 5,000 CBP field officers, 200 aerial and maritime operations agents, and 290 support staff.
To prevent current agents from changing jobs and to encourage new applicants for border guard positions, the budget sets aside $2.05 billion for retention bonuses and recruitment incentives.
All these substantial expenditures will need funding, and the answer, as you might have guessed, is the new remittance tax. This significant counterbalance against Mexican lobbying efforts to abolish the remittance tax is crucial context for understanding the budget’s implications.
The critical question now is: Which factor will weigh more heavily in senators’ decisions?
Care to Guess the Outcome?
Given the aforementioned points, it’s essential to understand what Washington DC refers to when discussing financing border security expenditures through the remittance tax via the Reconciliation process.
