During a meeting of the House GOP Conference this past weekend, senior representatives speaking for President-elect Trump and the House GOP Leadership jointly declared their intention to pass one single reconciliation bill to encompass border security, expiring tax cuts, energy production, and possibly an increase in the debt limit and defense spending, paired with mandatory offsets. Assembling a single large-scale bill is a shift from the “two-bill” strategy that has been championed by Senate Majority Leader Thune and is supported by most Senate Republicans, incoming Deputy Chief of Staff for Policy Stephen Miller, and members of the House Freedom Caucus, among others. The two-bill approach calls for quick passage of border security funding, energy production and defense spending through reconciliation in Q1, to be followed by major tax legislation later in 2025.
Trump’s personal opinion on reconciliation sequencing had been unclear, but in a Truth Social post late Sunday he called for “one powerful Bill.” In addition to border, energy, and tax policy, Trump also said the bill will include language on “No Tax on Tips” and stated “it will all be made up with tariffs, and much more, from countries that have taken advantage of the U.S. for years.” Then, despite his Sunday post, Trump said on the Hugh Hewitt show this morning that while his preference is one bill, he is also still “open” to a two-bill strategy (as envisioned by Senate Republicans) so long as his priorities are passed quickly.
Yesterday, Speaker Mike Johnson said the House is seeking to pass a budget resolution (necessary for reconciliation) in early February, with House passage of a reconciliation bill by the first week of April. He also stated that the goal is to have a bill on President Trump’s desk in May; specifically, no later than Memorial Day, which is May 26.
To meet this ambitious timeline, Republican Leadership will need to move aggressively to confront the many policy and political hurdles that stand in the way of passage, including:
- Passage of budget resolution: As previously mentioned, both chambers will need to pass an identical budget resolution providing reconciliation instructions to various committees. In the Senate, the budget resolution will be subject to a “vote-a-rama” where Members can offer non-binding amendments on any topic.
- Looming government funding deadline: The current continuing resolution (CR) expires on March 14, and GOP leadership will need to thread the needle on government funding right in the middle of its reconciliation process.
- Debt limit: In response to Trump’s 11th hour debt limit demands during the recent CR fight, House Leadership pledged to include $2.5 trillion in mandatory spending cuts/10 years in exchange for a $1.5 trillion debt limit increase in a reconciliation bill.
- Offsets: Finding consensus on $2.5 trillion in spending cuts will be difficult given intraparty disagreements on policies including SALT, changes to the IRA, Medicaid, and tariffs.
House GOP Weekend Retreat at Fort McNair
Many of these policies were discussed at the House GOP’s Leadership retreat this past weekend at Fort McNair. Highlights included:
- Speaker Johnson/Senate Majority Leader Thune fireside chat
- Jason Smith breakout session, outlining themes for TCJA renewal:
- Make American Families and Workers Thrive Again
- Make Rural America and Main Street Grow Again
- Make America Win Again
- Johnson-led breakout session on spending cuts with E&C Chairman Guthrie, OGR Chairman Comer, and Education & Workforce Chairman Walberg:
- Comer: civil service reform, federal benefits reform
- Walberg: student loans, other higher ed issues
- Guthrie: spectrum auctions, IRA rescissions, Medicaid savings
Reconciliation Path Forward Remains Complicated
Despite the greater level of detail in Member discussions, there are still major differences to be bridged between the House and Senate GOP before a budget resolution and reconciliation bill (or bills) can be realized. First, there remains the question of process: one bill or two. Second, there are significant process differences relating to the duration and magnitude of tax legislation. Some of those differences are reflected in discussions relating to use of a current policy (vs. current law) baseline, with Senate Republicans largely on board for a long-term tax bill, but some House Republicans more skittish about the deficit impact. Given their razor thin majority, President-elect Trump and Congressional leaders will have their work cut out for them to unify the GOP on these issues. Indeed, vote counting purposes is a major reason why those pushing a single reconciliation bill believe saving border security for a larger tax bill is necessary.
The hard work of getting Republicans to unified support of a tax program is now underway, and the President-elect will be meeting with different factions of the House GOP later this week to discuss these issues and more.
House Outlook
In addition to the Chamber hosting today’s Joint Session to count (and certify) the electoral ballots for President and Vice President (now completed), the House will be focused on messaging bills for much of the initial weeks of the new Congress. This week, their work includes H.R. 29, the Laken Riley Act, and H.R. 23, the Illegitimate Court Counteraction Act (sanctions on the ICC). The House Rules package enables closed rule consideration of 10 more bills ranging from immigration and border security to legislation to prohibit a moratorium on hydraulic fracking.
Given that the House must reconstitute itself, much of the business of these early weeks will be organizational, particularly in the committees as they finalize new staff, adopt their own internal rules, and finalize subcommittees. We do not expect the House to be fully “up and running” until February.
Senate Week Ahead
This week, we expect the Senate to pass its organizing resolution for the 119th Congress, formally establishing committee ratios and allowing members to be seated on committees. The Senate may vote on whether to proceed to Senator Britt’s Laken Riley Act legislation as well before the week is out.
We also expect Committees to begin noticing hearings for next week on several of Trump’s nominees, including Hegseth/DOD (Jan. 14), Rollins/USDA (Jan. 15), Noem/DHS, and Rubio/State, among others.
Also this week:
- Monday: Joint session of Congress to count electoral votes in House chamber (now completed)
- Tuesday: the first day that legislation can be introduced, bills can be co-sponsored, and Statements for the Record can be submitted.
- Tuesday – Thursday: remains of the late President Carter will lie in state in the Capitol rotunda.
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