“Reconciliation 2.0” is a live exercise for the immediate future, fueled by the Congressional Republicans’ search to restore funding to the Department of Homeland Security, the emerging need for supplemental appropriations, and a desire to require proof of citizenship for voter registration. Whether 2.0 is real by the time the House and Senate return from the scheduled Easter Recess is another question, but the dynamic has shifted towards an attempt to pursue a narrow, security-focused reconciliation package that includes ICE funding, a war supplemental, and farm/disaster aid-Republican priorities that Democrats are unlikely to help pass (but for the disaster aid). A reconciliation bill may also include any elements of the SAVE America Act (which requires proof of citizenship prior to registering to vote) that can survive the Senate Parliamentarian’s reconciliation review.
Up until now, Senate GOP Leadership has been bearish on a second reconciliation bill, in part because they didn’t know what the purpose would be (or what could unify their members) and in part because of skepticism that the House could pass anything. At the same time, bicameral Republican Leadership has been resistant to breaking off ICE funding from the remainder of the DHS funding bill. Despite Democratic entreaties to simply fund those parts of DHS both sides agree on, Republicans have believed that they hold the moral high ground and that pressure will continue to build on funding all of DHS given growing airport security delays.
Over the last week, however, Senate Republicans have largely shifted, and they now view the best way out of the DHS funding impasse is by accepting the Democrats’ demand to fund all of DHS but ICE while later using budget reconciliation to fund ICE and the war supplemental-the latter item contributing substantially to the evolved mindset. Last Sunday, Leader Thune floated an outline of the new approach to President Trump: a full DHS CR but without ICE funding, while pursuing a reconciliation bill for ICE, the war supplemental, and potentially other Republican priorities that cannot achieve 60 votes in the Senate (e.g., the SAVE America Act). This new strategy would help alleviate two of Thune’s current problems – a DHS shutdown and a fractious GOP debate over the SAVE America Act.
Trump rejected Thune’s proposal on Sunday, posting on Truth Social that the Senate should eliminate the legislative filibuster and pass SAVE America before doing anything else. On Monday, a group of Republicans led by Sens. Daines, Britt, Graham, and Moreno spent a couple of hours with the President and floated Thune’s notion again. They returned to the Capitol that evening indicating that they thought the President would agree to support the strategy.
Unfortunately, Senate Democrats have yet to take Republicans up on the latest proposal. The latest Democratic counteroffer, sent back early this afternoon, appears to insist upon all of the reforms to ICE they have previously demanded in exchange for ICE funding, even for a bill that doesn’t fund ICE at all. Still, there is some optimism that a deal could come together this week given the looming two-week recess, Member skittishness to leaving town with DHS issues unresolved, and TSA lines growing longer at more airports. President Trump is also pressuring Congress to stay in session, albeit with more focus on SAVE America than anything else.
An additional obstacle emerged late yesterday by way of House and Senate conservatives. Both Senator Mike Lee and the House Freedom Caucus have publicly criticized the new strategy, noting that the SAVE America Act is unlikely to clear Senate parliamentary hurdles under reconciliation rules. Moreover, despite being a supporter of a second reconciliation effort, Speaker Mike Johnson has dug in on the DHS funding side, saying he does not want to break ICE off from the larger appropriations bill. Meanwhile, the President has largely stayed on the sidelines-at least publicly-and is more focused on the war in Iran.
Further complicating the picture is the timeline. There is an extended process around reconciliation that begins with the requirement of a unified budget resolution. That budget includes reconciliation instructions that set general numbers for each instructed committee to achieve. Both House and Senate Budget Committee chairs (Arrington and Graham) have said they will move expeditiously through their respective committees, and markups are possible after recess. But even a fast process will take several weeks to go through committee and the chambers’ respective floors. On the Senate side, the budget resolution is subject to 50 hours of debate, equally divided, and untold number of amendments (politically perilous for those in cycle). That is before all before the legislating portion of reconciliation begins.
Moreover, there is nowhere near unanimity among the GOP that this is the best approach, nor is there agreement that it is the last best way to enact elements of the SAVE America Act. There is also disagreement as to whether and how much of the notional funding package – which could run into the several hundred billion range – should be offset, and how (also politically perilous). And there is disagreement over which committees should receive reconciliation instructions at all. In short, the vote count is as tight as the timeline.
OUTLOOK/ANALYSIS. The odds of Reconciliation 2.0 moving are increasing, with Members beginning to coalesce around a narrow security-focused package as the most optimal vehicle for ICE and CBP funding, supplemental war funding, farm/disaster aid, and elements of the SAVE America Act. Still, major hurdles remain for any reconciliation bill to become law this year given narrow margins and tight timelines.
The X factor, as always, is President Trump. Should he engage and support an emerging Leadership strategy, the odds of success substantially increase. In the meantime, it is difficult to speculate as to what, aside from ICE, emergency funding (DoD, Ag, FEMA), SAVE America Act-like policies might be included. For example, it is not clear that the tax writers will want instructions – both W&M Chairman Jason Smith and Senate Finance Committee Chairman Crapo have been cool to another round of reconciliation, in part due wariness that they would have to produce offsets, and the fraught politics of healthcare-related policies in their respective jurisdictions.
If the Senate can get through this week and fund DHS (less ICE), we anticipate there will be greater discussion about the path forward for reconciliation over the coming break. Notably, ICE will continue to operate given it has multiple years’ worth of mandatory appropriations under the OBBBA.
In addition to a FISA extension additional items that the Senate may consider in the Spring include energy permitting reform, digital assets market structure, Kids Online Safety and, if necessary, the next iteration of housing reform-all of which are subject to bipartisan negotiations. Should the odds of reconciliation increase, Democrats’ willingness to engage on these issues may very well wane.
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