Good evening,
After hearing from President Trump last evening, House Republicans huddled today in a series of conference-wide discussions and breakout sessions to attempt to coalesce around a reconciliation timeline and strategy.
Leadership Reports
Speaker Mike Johnson kicked off the leadership panel by continuing to exhort his colleagues to rally around the one-bill strategy, reiterating his belief that it was the best way to ensure the President’s agenda could pass through the tight-margins of the House. He also emphasized the importance of approving a budget resolution in a timely manner, telling members that voting for the budget did not bind them to voting for the final bill and that any red lines should be leveraged on final passage. Finally, he forecasted that while the deficit reduction targets enshrined in the budget reconciliation instructions might be less than certain members had hoped for, he would encourage House committees to go above and beyond the minimum cuts required-adding that he would happily support $2.5 trillion in cuts and would even vote for $8 trillion in cuts if that were on the table.
Majority Leader Steve Scalise followed by outlining a number of upcoming agenda items for the floor, as well as a notional calendar for tackling reconciliation (slides attached). As of today, House leadership’s preferred timeline calls for completing the budget process through both the House and Senate in February, completing committee markups of the individual reconciliation pieces in March, and turning to floor consideration in April so as to send a bill to the President’s desk by May. This is already a backslide from leadership’s initial draft timeline, however, and further delays remain possible, if not likely.
Instructed Committees on Reconciliation
Of note, Leader Scalise also detailed the House committees that are currently in line to receive reconciliation instructions, including those projected to be required to reduce the deficit and those permitted to increase the deficit (though no specific target reduction or increase figures were detailed).
Deficit Reduction Committees include:
- Agriculture
- Education and Workforce
- Energy and Commerce
- Financial Services
- Oversight and Government Reform
- Natural Resources
Deficit Increase Committees include:
- Armed Services
- Homeland Security
- Judiciary
- Ways and Means
- Transportation and Infrastructure
Committee Breakouts
A number of chairs from the above committees then held a series of breakout sessions to further detail the policy proposals in their respective jurisdictions that they envisioned moving through a reconciliation bill. For example, Homeland Security Chair Mark Green and Judiciary Chair Jim Jordan walked through a number of measures needed to secure the border that could total $110 billion or more, ranging from physical infrastructure and drones to detention beds and additional ICE and CBP agents.
Meanwhile, Energy and Commerce Chair Brett Guthrie relayed that potential estimated savings from IRA rescissions have dropped significantly with President Biden shoveling funding out the door on his way out, but that billions in unobligated funds were still in play. Greater savings in E&C remain possible through repealing the EPA tailpipe emissions rule, repealing the Department of Transportation CAFE standards, reauthorizing FCC spectrum auction authority, and pursuing reforms to Medicaid.
Finally, Ways and Means Chair Jason Smith gave a primer on the 2017 Tax Cuts and Jobs Act in the context of other historical tax reform efforts, while arguing that government had a spending problem rather than a revenue problem and that it remained his preference to pursue long-term, pro-growth tax policy. Few other notable details or decisions were reached in this session, however.
The retreat will conclude tomorrow with another morning panel on reconciliation and a wrap-up discussion.
OUTLOOK/ANALYSIS. Slowly, the contours of Congressional Republicans’ ideal reconciliation package are coming into view. From substantial border security spending, defense plus-ups, and tax policy on the deficit increase side of the ledger, to rolling back Biden-era rules and regulations (i.e. student loans, IRA, energy policy, EV subsidies, work requirements, Medicaid) on the deficit reduction side of the ledger, House Leadership is moving forward with its vision to craft “one big, beautiful bill.”
However, multiple major landmines remain. For one, the President admitted during his opening remarks that he did not care whether reconciliation was one bill or two bills, much to the chagrin of Speaker Johnson who hoped to finally put that question to rest at this week’s retreat. Moreover, while House Leadership is smart to request flexibility from the membership when it comes to outlining precise deficit reduction targets in the budget resolution, it is not clear that the party’s fiscal hawks will go along with a budget resolution that allows for a net increase in the deficit by as much as $1 trillion or more. One such notable member, Representative Chip Roy (TX), skipped this week’s retreat, saying he did not want to “have the same rah rah conversations” that called for “unity without purpose.”
Finally, left almost entirely out of this week’s discussions were the fast approaching March 14 government funding deadline, its interplay with leadership’s reconciliation timeline, and the unanswered question of how and where to raise the debt ceiling. Judiciary Chair Jim Jordan, for example, rightly voiced concerns with the optics and member blowback that could arise from moving a bipartisan omnibus spending and disaster aid bill-similar to that which was pursued but ultimately abandoned in December-while committees were simultaneously marking-up the party-line reconciliation bill.
While this week’s summit at Trump Doral certainly served as an important forum for members to offer feedback and feel more bought into the reconciliation process, many of the most consequential questions remain unanswered and leadership is now firmly on the clock to begin putting pen to paper.
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