Here are four dynamics from Punchbowl News you should keep an eye on as Congress moves into the really difficult part of advancing Trump’s agenda.
1) Timing. Speaker Johnson and Senate Majority Leader Thune need to find a compromise budget resolution that can eventually win the support of conservative House Republicans, who will oppose any attempts to scale back spending cuts.
That compromise budget resolution won’t come to the House floor until early April, most likely. That’s when two new House Republicans from Florida will be sworn in. (Although New York GOP Rep. Elise Stefanik can now exit for her U.N. gig.)
Johnson wants to send a reconciliation package to Trump by the early part of May. Thune told us Tuesday night that Johnson’s timeline is “possible” but noted that there are many more steps to go.
2) Medicaid. One of the critical fights will be over cuts to popular programs, especially Medicaid. In passing the budget resolution, House Republican leadership convinced wobbly moderates that the Senate would likely water down the hundreds of billions of dollars in Medicaid cuts called for in the House’s plan.
The real challenge for the House GOP will be accepting that Senate Republicans don’t have an appetite for giant spending cuts.
3) Tax policy. Perhaps the most important demand of Senate Republicans is that the 2017 tax cuts be made permanent. This is Thune’s red line, as he made clear once again last night. The House’s budget plan doesn’t realistically allow for permanence. Thune also hinted that there could be changes to the $4 trillion debt-limit increase included in the House bill, a nod to some GOP senators’ opposition to using reconciliation for this purpose.
There’s openness on the House side to using the scoring method that Senate Republicans want to employ to make permanent extensions feasible without having to dip into huge offsets because of reconciliation rules.
But along with the tax instructions, there’s lots of policy to work out between the chambers. For one, Senate Republicans have far less of a reason to set a higher cap on deducting state and local taxes, a key demand for a handful of House Republicans from blue states.
This is news: Key Hill Republicans and Trump administration officials are huddling at the White House complex this afternoon to work on nailing down tax plans, with more meetings to come. The meeting is expected to include Treasury Secretary Scott Bessent and White House National Economic Council Director Kevin Hassett on the administration side. From the Hill, it’ll include Johnson and Thune along with the tax committee chairs, Rep. Jason Smith (R-Mo.) and Sen. Mike Crapo (R-Idaho).
4) Trump. The next few months will test Trump’s patience and discipline. Hill Republicans can’t pass a reconciliation package without the president staying engaged and taking cues from congressional leaders on where he could be helpful. Remember, in 2017, Trump nearly blew up the tax bill on several different occasions.