Trump Demands “Skinny” Reconciliation 2.0. President Trump began his day as the first sitting president to sit in the audience as the Supreme Court conducted oral arguments over the Administration’s attempts to end automatic birthright citizenship. This evening, President Trump is slated to address the nation for the first time since military action began February 28 in Iran. In between, the President made further news this afternoon by calling on the House and Senate GOP to send him party-line budget reconciliation legislation by June 1 that would fund elements of the Department of Homeland Security (DHS) that Congressional Democrats have made clear they will not vote for, at least absent policy changes the Administration is unwilling to make.
In the President’s words:
“That’s why we are going forward to fund our incredible ICE Agents and Border Patrol through a process that doesn’t need Radical Left Democrat votes, and bypasses the Senate Filibuster (which should be repealed, IMMEDIATELY!), working in close conjunction with House Speaker Mike Johnson and Senate Leader John Thune. We are going to work as fast, and as focused, as possible to replenish funding for our Border and ICE Agents, and the Radical Left Democrats won’t be able to stop us. We will not allow them to hurt the families of these Great Patriots by defunding them. I am asking that the Bill be on my desk NO LATER than June 1st.”
2.0: Border Patrol and ICE Funding. While the President did not explicitly instruct Congressional Republicans to restrict the bill to Border Protection and ICE, his nod to working “as fast and as focused as possible” is a clear signal that he is opting to try to get a quick win with a narrowly focused bill that can unite Republicans, rather than tempting fate with a more protracted process on larger legislation that might not do so. Of note: Trump is not calling for this round of reconciliation to be used to fund the supplementary needs of the Department of War, or for aid to farmers or other emergency assistance.
This construct is aligned with Senate Majority Leader John Thune, who, in conversations with the President, GOP Senators and fellow Congressional GOP leaders has made clear that he believes Congress can deliver a Border Protection/ICE funding bill to the President’s desk quickly using budget reconciliation, while leaving other items for later discussion. Under this emerging plan, Reconciliation 2.0 would include roughly $60 billion in mandatory appropriations meant to cover Border Protection and ICE operations for the duration of Trump’s term.
This funding is not likely to be offset given that it is replacing annual discretionary appropriations that are also not offset, thereby reducing the frictions that often prevent GOP members from achieving consensus and the near-unity necessary to advance such legislation. And, on a parallel track, the House would also pass the Senate-passed DHS bill that Senate Democrats agreed to last week, which funds each of the additional parts of DHS (including Customs, Coast Guard, FEMA, and TSA).
Timing. Trump is calling for a two-month process, which might sound like a lot of time but in budget reconciliation terms would represent lightning quick action. By way of example, Trump’s first reconciliation bill in 2017 (Tax Cuts and Jobs Act) took the entirety of 2017 to produce, and the One Big Beautiful Bill Act enacted last year took months of planning and an additional six months to execute. The reconciliation process is meant to be cumbersome, and GOP majorities are tiny, especially in the House.
In order for budget reconciliation legislation to go live, the House and Senate must first each pass identical budget resolutions that instruct relevant committees to report legislation consistent with those instructions. It is only after the House and Senate have enacted a unified budget that the legislative portion of the process can begin. In the Senate, there is 50 hours of debate (equally divided) on the budget resolution itself, and both the budget resolution and the legislation that follows (which can be debated for up to 20 hours) are subject to unlimited germane amendments.
But while Reconciliation 1.0 (OBBBA) was a multi-committee bill requiring months of careful planning and consensus building, under this construct 2.0 would be much simpler, meaning Congress could potentially move much faster. Notably, with the President’s seal of approval, we might see a markup of the budget resolution in the Senate as soon as late April. In line with this plan, at this point, we anticipate that just two committees – Judiciary and HSGAC – would receive reconciliation instructions. That means other Committees – including Ways & Means and Finance, which have jurisdiction over both taxes as well as Medicare (and, in Finance’s case, Medicaid) would not be involved directly in the reconciliation process.
While there have been some high-profile disagreements between House and Senate Republicans over the last week regarding how to fund DHS, this afternoon Leader Thune and Speaker Johnson released a joint statement in which they make clear they are committed to pursuing the skinny reconciliation plan described above. Therefore we anticipate the House Budget Committee to move quickly as well, with the precise timeline still TBD. Once the Senate and House have both enacted identical resolutions, legislating can begin.
OUTLOOK/ANALYSIS. Today’s news represents a stark shift from several weeks during which divisions among Republicans have dominated during debates on DHS funding as well as on the SAVE America Act. While it is not a foregone conclusion that Congressional Republicans will be able to successfully move forward on a narrow bill, the fact that President Trump, Leader Thune and Speaker Johnson have aligned is a significant step forward. Reconciliation 2.0 – long thought by Congressional Leaders to be impossible – is very much possible, and on a tight timeline, but only if Republicans are disciplined enough to keep it narrow, meaning war and other funding are likely left out. Even if successful, Congress will one way or another also have to grapple with items not included in 2.0 including supplementary war funding, disaster aid, and other items.
Another critical point to watch is whether MAGA-aligned House Republicans, who have voted for this funding without budget offsets many times as part of the regular appropriations process, are on board with voting for it in the reconciliation construct without offsets. It also remains to be seen whether there will be an effort to include elements of the SAVE America Act – for example by conditioning election assistance funding to states on compliance to voter registration requirements – as part of the process.
We will have more to say as to how this impacts the Congressional agenda for the coming months, but we still expect efforts on market structure reforms, housing, energy permitting, kids online safety, and NDAA to continue, albeit with uncertain outcomes.
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