While House Republicans continue their internal discussions in an effort to unify on a one-bill reconciliation strategy, Senate Republicans are in parallel working on the first of what would be a two-budget reconciliation approach.
Senator Graham just released a draft skinny budget resolution to be marked up Wednesday of next week. In contrast to the House GOP, which prefers a one bill approach, the skinny budget resolution calls for a first round of legislation that spends approximately $345 billion on mandatory border security ($175 billion); defense ($150 billion); and Coast Guard (~$20 billion). Tax legislation would be saved for a second round of reconciliation later in the year. This stands in contrast procedurally to the House GOP’s preferred one-bill approach.
In addition to those spending instructions, the skinny budget proposal contains a series of instructions to various committees directing each to save $1 billion or more from within their jurisdictions, While the saving instructions are minimal so as to provide flexibility, the expectation is that each committee will exceed its minimum requirement and that the legislation will be fully offset with non-tax revenue (note – no Ways and Means instruction is included). While it would eventually be up to each instructed committee to produce offsets from within its jurisdiction, some of the non-tax sources of revenue that have been discussed as likely include student loan provisions (HELP Committee); oil and gas lease sales (Energy Committee); and likely some health policy provisions in the purview of the Senate Finance Committee.
Outlook/Analysis. It remains to be seen how the House GOP’s continuing internal discussions dovetail with the Senate GOP’s planned markup for next week. That said, absent clear agreement soon among House Republicans on a budget framework, it is highly likely that Senate Budget will move forward next week, and that the Senate would prepare to consider the resolution on the floor soon thereafter.
As a reminder, the budget resolution does not itself craft policy or create law; its principal purpose in this case is to arm the reconciliation process for a narrow first-step reconciliation bill. In order to do that, both the House and Senate must agree to a budget resolution in identical form. The differences in approach between the House and Senate will have to be ironed out before reconciliation – whether in one stage or two – before reconciliation can begin.
That said, there’s little doubt that the Senate action this week has reinvigorated House GOP discussions. The ultimate path forward therefore remains murky. While the Senate is determined to move forward on its own, a breakthrough by House Republicans could ultimately impact the Senate’s approach. We will keep you apprised as events continue to unfold.
###