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February 10, 2025
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THE TOP
The race for reconciliation
Happy Monday morning.
House Republican leaders are looking to cut federal spending by $2 trillion to $2.5 trillion as part of their reconciliation push, according to multiple sources familiar with the talks.
House GOP negotiators now believe they will have to dig deeper into Medicaid spending to meet those targets, including potentially cutting benefits for enrollees, according to these sources. This will be a complicated political challenge. Some House Republicans are going to be skeptical about slashing Medicaid spending so heavily, and the White House will have to agree as well. We scooped last week that Republicans were eyeing $4.7 trillion in tax cuts.
Then there’s another dynamic at work: Senate Budget Committee Chair Lindsey Graham (R-S.C.) plans to mark up his own budget resolution on Wednesday that includes more than $340 billion in new funding for border security and the Pentagon over four years, as well as energy policy changes, all of which will be offset by spending cuts. Speaker Mike Johnson has pleaded with Graham to hold off on a markup. So far, Graham hasn’t agreed.
“I hope the House will move forward soon, but we cannot allow this moment to pass, and we cannot let President Trump’s America First Agenda stall,” Graham posted on X Friday. Graham played golf with Trump on Saturday in West Palm Beach, Fla.
Meanwhile, Johnson spent the weekend in Louisiana. He joined Trump for the Super Bowl on Sunday evening. Appearing on “Fox News Sunday” from the Caesars Superdome in New Orleans — the Super Bowl venue — Johnson again urged Graham to stand down.
“I appreciate the Senate’s zeal, we have it in the House as well,” Johnson said. “But as I reminded my friend Lindsey, I have about 170 additional personalities to deal with and he’s only got 53 on the Republican side there.”
Johnson said he’s been “reminding” the White House that House Republicans, in his view, can only pass a single reconciliation bill. Graham’s strategy calls for two bills: the defense-border-energy package now with an extension of the 2017 Trump tax cuts later this year.
And it gets worse for House Republicans. Johnson hinted that the Budget Committee may not mark up the GOP package this week as promised.
“We were going to do a Budget Committee markup [this] week. We might push it a little bit further because the details really matter,” Johnson said.
The Senate’s two-bill strategy may look awfully appealing to the White House once the Budget Committee starts moving a resolution on Wednesday and Thursday. In fact, it’s already the preferred option of many hardline House Republicans.
The House is in session today through Thursday, and then members leave for a weeklong Presidents Day recess. The Senate will be in session next week.
Huge cuts to Medicaid — plus changes to food stamps and other social safety net programs — even as Republicans push tax cuts for wealthy Americans and corporations may become politically difficult. States that expanded Medicaid coverage via Obamacare or during the Covid-19 pandemic could get hit hard.
Block granting Medicaid and instituting work requirements are under discussion. But if Republicans decide to start tinkering with benefits through per capita caps, reducing the federal contribution or other programmatic changes, that becomes more difficult. Children, low-income and rural communities would be inordinately impacted.
Rep. Jeff Van Drew (R-N.J.) told us last week that he was worried about potential cuts to Medicaid.
“I’ll be very blunt — Medicaid isn’t just something for people who don’t want to work or on welfare,” Van Drew said. “Seventy-million people in this country get their health care through Medicaid now, because we increased the limits.”
Government funding. The federal government runs out of money in 32 days. Republicans and Democrats aren’t close to a topline spending number. In fact, House and Senate Republicans still aren’t on the same page when it comes to FY2025 spending.
There’s also been a back-and-forth between Johnson and House Minority Leader Hakeem Jeffries as to whether there is a stalemate in the talks. Johnson says there is, Jeffries and other Democrats say there isn’t. Or at least it’s not their fault anyway.
We’ve been crystal clear in our view that Washington is drastically underestimating the chance for a government shutdown after March 14.
Sen. Andy Kim (D-N.J.) was on NBC’s “Meet the Press.” Kristen Welker asked him if he would be willing to shut down the government over some of Elon Musk’s moves. Here’s what Kim said:
We’ll note that a number of Democrats won’t vote for a shutdown. Yet remember that if there’s no spending deal, there will be an automatic sequester in mid-April across the board.
— Jake Sherman and John Bresnahan
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NOMS, NOMS, NOMS
Gabbard, Kennedy set for confirmation votes this week
Senate Republicans are preparing for a second straight week where they’re using all of their floor time on confirming President Donald Trump’s Cabinet nominees.
At the end of last week, Senate Majority Leader John Thune teed up five more Trump nominees for consideration. But if Senate Republicans want to confirm all of those nominees this week, it would require a time agreement with Democrats.
Senate GOP leaders are prioritizing confirmation votes for former Rep. Tulsi Gabbard (Hawaii) and Robert F. Kennedy Jr., two of Trump’s more controversial Cabinet picks.
Tonight, the Senate will vote to invoke cloture on Gabbard’s nomination to be the director of national intelligence. Gabbard, once seen as the most at-risk nominee, won over Sens. Susan Collins (R-Maine) and Todd Young (R-Ind.) last week to advance out of the Senate Intelligence Committee.
Gabbard is unlikely to be defeated on the floor, although GOP Sens. John Curtis (Utah) and Mitch McConnell (Ky.) are two swing votes to watch.
If cloture is invoked, it would set up a confirmation for Gabbard late Tuesday night or early Wednesday morning, given the 30 hours of post-cloture time required. We don’t expect Democrats to yield back any of that time.
After Gabbard, the Senate will turn to confirm Kennedy to lead the Health and Human Services Department. Kennedy convinced a top critic, Sen. Bill Cassidy (R-La.), to back him in committee and seems on track to be confirmed. McConnell, a childhood survivor of polio, isn’t likely to vote for Kennedy. But we don’t see four GOP ‘no’ votes on Kennedy, especially given Cassidy will be a ‘yes.’
Thune on Thursday filed cloture on three further nominations: Brooke Rollins to be secretary of agriculture, Howard Lutnick for secretary of commerce and former Sen. Kelly Loeffler (R-Ga.) to be small business administrator. It remains to be seen whether these nominees will get confirmation votes this week.
The other big confirmation news this week will take place inside the Senate Judiciary Committee. The panel will vote Thursday on Kash Patel’s nomination to be FBI director. Democrats were able to delay the nomination for a week under Judiciary Committee rules. But Patel looks ready to be moved forward despite new reports about his financial holdings in foreign companies, including Chinese fashion brand Shein and a Russian filmmaker with Kremlin ties.
— Max Cohen
APPROPRIATIONS WATCH
House GOP appropriators do little as DOGE runs wild
House Republican appropriators have shown little problem with President Donald Trump and Elon Musk snatching the power of the purse from Congress.
In fact, some are downright embracing it. Just take a look at what House Appropriations Committee Chair Tom Cole (R-Okla.) told us:
Given Trump’s iron grip on the GOP, it’s hardly surprising that he and Musk have generally encountered minimal resistance from Republicans on Capitol Hill as they embark on a dramatic reshaping of the federal bureaucracy.
But it’s still striking that even Republicans on the House Appropriations Committee — an exclusive panel that oversees more than $1.7 trillion in annual spending — are OK with ceding some of their very own power to the White House.
Cole acknowledged that the Trump administration’s desire to challenge the Impoundment Control Act, a 1974 law that mandates that the executive branch spend funds appropriated by Congress, is a “controversial” tool but also argued it’s “not unprecedented.“ On Musk’s stunning dismantling of USAID, Cole called it a “valuable exercise” that shed light on misuses in congressional funding.
Other House GOP appropriators also agreed that funding should be paused so the Trump administration can review it. Rep. Robert Aderholt (R-Ala.), the chair of the Labor-HHS subcommittee, said he’s not worried that the Trump administration is encroaching on Congress’ spending power.
“Most Republicans would agree with President Trump that there needs to be some holding up, some funding that was probably out of line of how it would be spent,” Aderholt said.
To be clear, not all House GOP appropriators are on board with everything. Rep. Steve Womack (R-Ark.), the THUD cardinal, told us he’s fine with the funding pause but wants to ensure Congress has the final say on appropriations.
“I’m an Article 1 guy,” Womack said, referring to Congress’ coming before the presidency in the Constitution.
Some members didn’t mince words. “The law is the law,” Rep. Hal Rogers (R-Ky.) said of the Impoundment Control Act, noting it has stood up to previous court challenges.
Senate Republicans haven’t been much more vocal during the DOGE blitz. Senate Appropriations Committee Chair Susan Collins (R-Maine) complained publicly about the now-withdrawn funding freeze imposed by OMB as well as the USAID dismantling. But Senate GOP leaders haven’t done much to stop it either.
Democrats now want assurances from Republicans that any funding deal they agree to will be implemented. Rep. Rosa DeLauro (Conn.), the top Democrat on the House Appropriations Committee, said the GOP needs to “grow a spine.”
Republicans are too scared to go against Trump and Musk, DeLauro insisted.
“There is no one standing up,” DeLauro said. “I believe my Republican colleagues are frightened of what kind of retribution there may be.”
— Melanie Zanona, John Bresnahan and Samantha Handler
THE CAMPAIGN
Scott’s 55-seat strategy
At the NRSC’s winter retreat in Palm Beach, Fla., this weekend, Chair Tim Scott declared an ambitious goal of netting Republicans 55 Senate seats after the 2026 midterms.
Scott identified six battleground states in 2026: Georgia, Michigan, New Hampshire, Maine, North Carolina and Ohio. To get 55 seats, Republicans would have to protect Sens. Susan Collins (Maine), Thom Tillis (N.C.) and Jon Husted (Ohio) while flipping two Democratic seats.
The best Republican flip chance is in Georgia, where Scott told senators that Republicans “have an opportunity to knock off [Democratic Sen. Jon] Ossoff.” We reported how Republicans are lobbying GOP Gov. Brian Kemp to jump in the race.
Beyond the six battleground states, Scott name-checked Minnesota, Virginia and New Mexico as additional reach opportunities to “maybe even stretch for 56.” Those states have Democratic incumbents up for reelection in places President Donald Trump lost by between four and six points.
Scott also reiterated his plea to “put red state races to bed early” and encouraged incumbents to raise money aggressively to fend off any surprise challenges. It’s an approach the NRSC is repeatedly pushing after Sen. Deb Fischer’s (R-Neb.) too-close-for-comfort win in November.
Throughout the weekend, Republican senators heard from National Economic Council Director Kevin Hassett about the White House’s economic message. Senate Leadership Fund President Cory Gardner and Executive Director Alex Latcham also held a moderated panel.
Job moves: Chandler Smith Costello is joining P2 Public Affairs as a principal. Prior to this role, Smith Costello was the deputy director of public affairs for the SEC during the previous Trump administration and spent nearly a decade on Capitol Hill before that.
— Max Cohen and Mica Soellner
📆
What we’re watching
Monday: The House Rules Committee will meet to set the floor procedure for the Midnight Rules Relief Act.
Tuesday: The House Homeland Security Committee will hold a hearing on China’s investment in Western Hemisphere ports.
The House Ways and Means Committee will hold a hearing on IRS modernization.
Federal Reserve Chair Jay Powell will testify in front of the Senate Banking Committee.
The House Financial Services Committee will hold a hearing on digital assets.
Wednesday: The House Financial Services Committee will also hear from Powell.
The House Judiciary Committee will hold a hearing on the “censorship-industrial complex.” Matt Taibbi will testify.
The House Energy and Commerce Committee will hold a hearing on AI in manufacturing.
The House Oversight Committee will hold a hearing on government waste.
The Senate HELP Committee will hold a confirmation hearing for former Rep. Lori Chavez-DeRemer (R-Ore.) to be labor secretary.
The Senate Commerce Committee will hold a hearing on “Greenland’s geostrategic importance to U.S. interests.”
The Senate Budget Committee will mark up its budget resolution for reconciliation.
Thursday: The Senate Budget Committee has Day Two of its markup.
The House Foreign Affairs Committee will hold a hearing entitled “The USAID betrayal.” Former Rep. Ted Yoho (R-Fla.) and former Bush-era USAID Administrator Andrew Natsios will testify.
The Senate Judiciary Committee will hold a vote to confirm Kash Patel as FBI director.
Top officials for Southern Command will testify in front of Senate Armed Services.
Senate HELP will hold a hearing to consider the nomination of Linda McMahon to be secretary of education.
— Jake Sherman
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