Tomorrow at 10:00 AM, the House Budget Committee is scheduled to markup Speaker Mike Johnson and Chairman Jodey Arrington’s proposed budget resolution. The relevant portion begins with Title II on page 34, whereby the resolution provides reconciliation instructions to eleven different House committees.
Taken together, these instructions set the parameters for the “one, big beautiful bill” advocated by House Leadership, encompassing everything from border security, military readiness, and domestic energy production, to extension of the Tax Cuts and Jobs Act, deficit reduction, and a $4 trillion increase in the debt ceiling.
In particular, the instructions require a net floor of $1.5 trillion in deficit reduction, the bulk of which would be required to come from Energy and Commerce ($880 billion), followed by Education and Workforce ($330 billion), and Agriculture ($230 billion).
On the tax front, the resolution permits the Ways and Means Committee to report instructions that increase the deficit by no more than $4.5 trillion. Chairman Jason Smith previously estimated that his panel would need at least $4.7 trillion to cover a 10-year extension of TCJA, to say nothing of President Trump’s additional campaign promises, such as “no tax on tips,” that would require further budgetary headroom. As such, we view the odds of the final tax bill being shorter than 10 years as increasing, better enabling it to fit within these scoring parameters.
As of this evening, however, House Leadership remained uncertain if they would have the votes to advance the resolution through committee and eventually the House floor, with the loudest complaints coming from Freedom Caucus members who are calling for an even greater amount of deficit reduction (approx. $2-2.5 trillion in savings).
Representative Eric Burlison (R-MO) stated he was “inclined not to support” the resolution and stated he would need a promise from President Trump that the savings would go beyond $1.5 trillion to change his mind. Likewise, Budget Committee Member Ralph Norman (R-SC) called the proposed cuts a “teardrop in the ocean.” Other potential no’s include Reps. Chip Roy (R-TX), Tim Burchett (R-TN), Andy Biggs (R-AZ), Thomas Massie (R-KY), Paul Gosar (R-AZ), Tom McClintock (R-CA), Victoria Spartz (R-IN), and Eli Crane (R-AZ).
Meanwhile, the Senate Budget Committee led by Chairman Lindsey Graham began marking up its own budget resolution today that would narrowly address the border security and defense spending components of the above outlined resolution-offset by agreed-upon savings-while deferring the broader tax discussion to later in the year. Completion of the Senate budget markup process is expected sometime tomorrow, with the potential for Senate floor action next week, further placing pressure on the House of Representatives to act.
OUTLOOK/ANALYSIS. As of this writing, all indications are that House Leadership is prepared to roll the dice on tomorrow’s committee markup and force the Freedom Caucus budget hawks to go on record, tapping President Trump to exert pressure on any holdouts as necessary.
Even so, tomorrow is only the first step in the reconciliation process-and arguably the easiest one at that. Moreover, with the House still planning to depart for a one week recess on Friday, the resolution will take on a multitude of arrows between committee markup and House floor consideration later this month, particularly on the anticipated cuts and reforms to Medicaid, TANF, and SNAP that are required to reach $1.5 trillion in savings. This pressure campaign could very well impact the votes of moderate Republicans.
Perhaps Sir Winston Churchill said it best: “This is not the end. It is not even the beginning of the end. But it is perhaps the end of the beginning.”
We will keep you posted on all relevant developments tomorrow in the House and Senate Budget Committees that hold the key to President Trump’s second term legislative agenda.
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