WASHINGTON — Congressional Republicans last week handed President Donald Trump a crucial win in a major spending battle on Capitol Hill. Now, they’re turning to the next big task: Remaining unified to negotiate, draft and pass their budget bill to score the president numerous policy wins in one fell swoop.
Congress approved a spending measure last week to extend government funding levels through the end of the fiscal year, a bill that narrowly passed after a majority of Democrats opposed the package. Trump played a major role in getting nearly all Republicans to vote yes, noting the spending bill was crucial to avoid a shutdown and “give us some needed time to work on our Agenda.”
“Conservatives will love this Bill, because it sets us up to cut Taxes and Spending in Reconciliation, all while effectively FREEZING Spending this year,” Trump wrote in a Truth Social post last week, urging Republicans to get the shutdown deadline out of the way so the party could continue working on the massive budget resolution working its way through Congress.
That package — often referred to by Trump as his “one big, beautiful bill” — passed the House in a nail-biter vote in February, and Senate Republicans are now parsing through the legislation before holding their own vote on the matter — with some saying changes must be made first.
Here’s a breakdown of what Republicans want to include somewhere in the legislation, and where things stand as lawmakers continue hashing out negotiations to get everyone in the GOP conference on board.
Tax cuts
One of the biggest components of the budget reconciliation package — also one of the most complicated and, therefore, contentious components — is language to extend Trump’s 2017 Tax Cuts and Jobs Act. Under the resolution, the House Ways and Means Committee would be given $4.5 trillion to extend those tax cuts before they expire at the end of the year.
While the extensions have been met with approval by most in the GOP conference, they have faced skepticism by some fiscal hawks who are concerned with reducing the nation’s deficit.
To ease those concerns, House leaders adjusted language to give the Budget Committee power to “adjust the dials” depending on how much government spending is slashed. For example, if committees are able to surpass the $2 trillion target and eliminate $2.5 trillion in spending, the amendment would increase the amount of money allocated to extend the tax cuts, and vice versa.
The package now sits in the Senate where Republican lawmakers are warning they need to make crucial changes to the tax portions before approving it en masse.
For example, Senate Majority Leader John Thune, R-S.D., has openly suggested making the tax cuts permanent rather than just extending them over the next decade. Details of the legislative text have not yet been finalized, but senators have proposed extending the cuts while also reviving some business tax benefits, expanding the child tax credit, and more.
Republicans on the Senate Finance Committee met with Trump on Thursday to continue discussions on the reconciliation bill, although no decisions were finalized.
“I don’t know that we solved anything,” Thune told reporters after the meeting. “We got what we needed — just some kind of direction and feel for where the president wants all this to land.”
Meanwhile, House leaders have been urging their Senate colleagues to speed up the process, hoping to get to work on drafting the bill as early as next month.
Questions remain on where to find spending cuts
A big question mark in the talks to extend tax cuts is where Republicans will slash funding to offset those costs.
That variable has raised concerns among several on Capitol Hill, particularly Democrats who have accused their GOP counterparts of looking at welfare programs such as Medicaid and Social Security to foot the bill.
“What is their goal? It’s worth repeating again and again and again, and we will: Donald Trump and Republicans are trying to give billionaires a tax break and have you pay the cost,” Senate Minority Leader Chuck Schumer, D-N.Y., said on the Senate floor last month. “The end game is the same: tax cuts for billionaires paid for on the backs of working and middle class Americans.”
While Trump has vowed not to touch Medicaid or any other welfare program, that may be easier said than done for Republicans hunting for spending cuts.
A recent study by the Congressional Budget Office, a nonpartisan agency that provides budget and economic information to Congress, showed that lawmakers would likely need to slash Medicaid funding to cover the lost tax revenue from extending the 2017 tax cuts.
The budget resolution passed by the House instructs the Energy and Commerce Committee, which oversees Medicaid, to find at least $880 billion in cuts over the next decade.
In the CBO’s budget projection, Medicaid accounts for roughly 93% of non-Medicare related mandatory spending in that time period. When one removes Medicare, Medicaid, or the Children’s Health Insurance Program from the equation, funding under the committee’s jurisdiction is only $381 billion.
Of that amount, more than half is already paid for by collection programs or user fees, according to The Washington Post, meaning that even if the committee slashed programs under the remaining $135 billion, it would still fall far below the $880 billion target outlined in the budget.
Border security
Another major component of Trump’s reconciliation package is funding to go toward securing the southern border.
Because of how the reconciliation process works in Congress, specific policies cannot be passed in the funding package. Instead, the resolution just approves a certain amount of money Congress can allocate to the Department of Homeland Security.
The House-passed budget resolution outlines a $300 billion increase in mandatory spending, split between the committees on Homeland Security, Judiciary and Armed Services. The details of how that amount will be split or how funds will be spent has not yet been determined.
But Republicans have aired a number of proposals to strengthen security at the southern border, such as spending money on border wall construction, increasing Border Patrol personnel, investing in updated technology to secure the border, and increasing bed space at detention centers, among other things.
Republicans have disagreed over how quickly to move on border spending, with those in the Senate arguing Congress should pass a standalone reconciliation bill allocating border funds while negotiations on the tax cuts portion drags on. However, GOP leaders in the House have maintained the party should pass just one single reconciliation bill to ensure all priorities are approved at once.
Energy production
Another component of the reconciliation bill includes funds to promote energy independence and deliver on Trump’s campaign promises to become “energy dominant.”
As a result, the resolution focuses on advancing policies that bolster energy independence while reducing the country’s reliance on foreign countries. Additionally, lawmakers are looking at ways to streamline regulation approval processes and reduce bureaucratic oversight.
One such proposal being pushed by Utah Sen. Mike Lee is to include the Regulations from the Executive in Need of Scrutiny Act, or REINS Act, somewhere in the reconciliation package to increase congressional oversight of major federal rules.
Meanwhile, some Republicans are pressing to preserve clean energy tax credits in the reconciliation bill, urging their colleagues to maintain a provision passed in former President Joe Biden’s Inflation Reduction Act.
More than 20 House Republicans penned a letter last week arguing those energy tax credits were crucial to meeting Trump’s goals of becoming energy dominant, according to Politico. Those members even went so far as to threaten their support on the final package if those credits are not included.
“We have 20-plus members saying, ‘Don’t just think you can repeal these things and have our support,’” said Rep. Andrew Garbarino, R-N.Y., who organized the letter, according to the outlet.
That could put the package in peril as House GOP leaders will need nearly every Republican on board to get the legislation across the finish line. Details included in the reconciliation package won’t be finalized for several weeks.