The Archive

IN THIS EDITION

How Johnson views where the House is on reconciliation

Inside the House’s effort to roll back regulations

Can Senate Republicans pull off permanent tax cuts?

Senate Judiciary jumps into tech fights

The Vault: Warren draws a line on stablecoin reform

THE TOP

How Johnson views where the House is on reconciliation

Happy Thursday morning.

News: The DCCC raised $9.5 million in January, a record for the first month of an off year. House Democrats, who outraised Republicans all last cycle, need to flip only a few seats to win the majority in 2026.

House is in the house. President Donald Trump’s decision to back the House’s budget resolution is a big victory for Speaker Mike Johnson, who has been engaged in a cold war with Senate Republicans over both strategy and tactics on enacting the GOP agenda.

Trump’s pronouncement Wednesday that he preferred Johnson’s “one big beautiful bill” to Sen. Lindsey Graham’s (R-S.C.) narrow spending blueprint has shifted the balance of power decidedly toward the House — for now.

Despite Trump’s comments, Senate Republicans are moving ahead with their budget resolution, but it’s widely seen as a backup plan for now. We expect a Senate vote-a-rama to begin this evening and last through the early morning hours of Friday.

The fate of Trump’s legislative agenda – and how fast it passes — now falls directly on the 53-year-old Johnson, who has done everything in his power to line up with the president.

Trump’s decision came as a surprise to almost everyone in the Capitol, including Senate Majority Leader John Thune, who said he wasn’t given a heads up by the White House. Trump had kept everyone guessing about his true intentions, saying on multiple occasions that he didn’t care about whether it was one package or two.

In an interview Wednesday, Johnson said he never doubted Trump’s preference, even if the speaker did think that Senate Republicans “underestimated the challenge” the House faces.

Yet Thune vowed to plow ahead with passing his own budget resolution, which includes $340 billion in new Pentagon and border-security money, including funding for Trump’s border wall between the United States and Mexico. The Senate package would also make changes to federal energy policy and is fully offset by cuts in mandatory spending.

So Trump is giving Johnson the space to try to pass his resolution, but will have the Senate working in the background in case Johnson fails.

“We believe that the president also likes optionality,” Thune told reporters Wednesday. “Hopefully we’ll be able to, whether it’s one bill or two bills, to get all of the things the president has outlined… across the finish line.”

Vance’s play. There are those in the White House — Vice President JD Vance among them — who view the Senate’s process as more efficient. The Senate wants to hand Trump an early victory while pushing a thorny debate on extending the 2017 tax cuts to later this year.

As we scooped, Vance said multiple times during a closed-door GOP lunch Wednesday that he’s “not telling you what to do” and that Trump is fine with the Senate’s track as a “plan B.” Vance told Republicans that Trump “won’t attack you” for moving forward with Graham’s budget resolution.

But Vance’s posture frustrated some senators who still see the issue as unresolved. Multiple GOP senators told us they believe Vance is on their side but was simply trying to manage Trump’s public alignment with the House rather than get everyone on the same page.

As for timing, House Majority Leader Steve Scalise told us Wednesday that he expects the House Republicans to pass their budget resolution next week. Johnson said it may take “a few more days” after next week.

Other reconciliation news. A few other items stuck out from our conversation with Johnson.

1) The speaker said he isn’t concerned about Trump telling Sean Hannity on Fox News that he doesn’t want to touch Medicaid but rather rid the hugely popular program of waste, fraud and abuse:

2) We asked Johnson about one of the biggest challenges he has to solve: how to extend the 2017 tax rates with just $4.5 trillion in spending cuts to offset any tax changes. Ways and Means Committee Chair Jason Smith (R-Mo.) and other tax writers have been skeptical this is enough space to renew those rates. Plus, Trump has other priorities he is asking for: the elimination of tax on tips, Social Security and overtime pay; adjusting the deduction tap on state and local taxes; eliminating tax breaks for sports team owners; and closing the carried interest loophole.

The speaker said he’s waiting on a few developments “that might have a big effect” on the reconciliation bill, namely the Congressional Budget Office’s score of the tariffs Trump has instituted, as well as formally quantifying any savings from DOGE.

— Jake Sherman, John Bresnahan and Andrew Desiderio

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THE AGENDA

Inside the House’s effort to roll back regulations

News: House Republican leadership plans to target 10 Biden-era regulations using the Congressional Review Act in the coming weeks, looking to unravel rulemaking on a broad swath of topics that impact a wide range of industries.

House Majority Leader Steve Scalise, who controls the legislative agenda and is spearheading the CRA push, said he’s been coordinating with Senate Majority Leader John Thune to ensure Republicans choose the best rules to target for overturning.

Reminder: CRAs allow Congress to overturn rules promulgated by the executive branch within 60 days of the rule being published in the Federal Register.

“President Trump got to sign 16 into law in his first term, and he knows how powerful they were, because Joe Biden was not able to reverse any of those,” Scalise said in an interview.

Here’s the list of CRAs that the House Republican leadership is planning to put on the floor:

1) The California Clean Air Act Waiver. Congress gave California a waiver to impose stricter emissions standards than those laid out in federal law. Republicans say this drives up costs for consumers and complicates the regulatory climate.

2) Waste Emissions Charge for Petroleum and Natural Gas Systems. The Inflation Reduction Act of 2022 put into place a “waste emission charge” on methane waste from oil and gas facilities. Republicans say this drives up prices for consumers. This is expected on the floor next week.

3) Energy Conservation Standards for Consumer Gas-fired Instantaneous Water Heaters. This rule tightens conservation standards for gas-fired instantaneous water heaters. This is also expected on the floor next week.

4) General-Use Digital Consumer Payment Applications. The Consumer Financial Protection Bureau finalized this rule in November to expand the agency’s supervision to “larger participants” in payment apps.

5) Digital Asset Sale. The IRS published a rule this summer for reporting the profits of crypto transactions for tax purposes.

6) Energy Conservation-Appliance Standards, Certification and Labeling. This rule adds new labeling standards for the Energy Department’s conservation standards.

7) OCSLA Oil and Gas Sulfur Operations: High Pressure, High Temperature. This Interior regulation tightens standards on offshore drilling equipment.

8) NESHAP for Rubber Tire Manufacturing. This rule creates new standards for rubber tires and is aimed at limiting dangerous chemicals.

9) Protection of Marine Archaeological Resources. This requires oil and gas operators and lessees to provide an archeological report for exploration on the Outer Continental Shelf.

10) Commission Guidance Regarding the Listing of Voluntary Carbon Credit Derivative Contracts. This creates a standardized marketplace to buy and sell carbon credits.

So as you can tell, there’s a lot here related to the energy industry, which is a priority of Scalise and Speaker Mike Johnson. And, as always, some of these CRA votes could put Democrats in a tough spot, Republicans say.

– Jake Sherman and John Bresnahan

THE TAX FIGHT

Can Senate Republicans pull off permanent tax cuts?

President Donald Trump dealt Senate Republicans a blow Wednesday in the seemingly never-ending struggle over how to move his agenda on Capitol Hill. Trump sided with the House GOP’s reconciliation roadmap right as the Senate began floor consideration of its own plan.

However Congress decides to package top GOP priorities — one bill, two bills — Senate Republicans are gearing up for an arguably more consequential fight on the substance of the legislation.

Senate GOP leaders have drawn a red line on the need to make the expiring 2017 Trump tax cuts permanent. That’s not feasible under the House’s budget resolution, which would give the tax committees $4.5 trillion of room for tax cuts.

It doesn’t include a “current policy baseline,” which Republicans view as the only realistic way to make the Trump tax cuts permanent. This scoring method would consider extensions of existing tax policy cost-free and get around Senate reconciliation rules that otherwise end up requiring big offsets down the line.

So can Senate Republicans secure that victory?

Their big challenge is that with a razor-thin House margin, Republicans and the Trump administration have to consider what can get through the House — or risk getting nothing.

The Senate view: Senate Budget Committee Chair Lindsey Graham (R-S.C.) addressed concerns about the House budget resolution’s tax instructions Wednesday.

“The bill they proposed doesn’t meet President Trump’s tax agenda, making the tax cuts permanent. And that would be a problem here,” Graham said.

Here’s what is working in the Senate GOP’s favor.

1) Senate Finance Committee Chair Mike Crapo (R-Idaho) debuted his big push for the current policy baseline very early — back in November. If Senate Republicans can secure the baseline, that’s a major win for Crapo.

2) The Trump administration also wants to make the 2017 tax law permanent.

3) The House is open to Crapo’s gambit but wants more certainty that the current policy baseline would pass muster with the Senate parliamentarian and be workable, given that it’s never been used in reconciliation before, according to sources familiar with the discussions.

Here’s baseline news: Sen. Elizabeth Warren (Mass.), the Banking Committee’s top Democrat, is launching a new inquiry into Republicans’ effort to use the current policy baseline with Sens. Catherine Cortez Masto (D-Nev.), Michael Bennet (D-Colo.), Mark Warner (D-Va.) and Peter Welch (D-Vt.).

In a letter to the nonpartisan Joint Committee on Taxation, the senators seek answers from the office about whether there is any precedent for using a current policy baseline. The Democrats also pose a series of questions aimed at how unusual the GOP’s baseline maneuvering would be and argue it amounts to “magic math” and a “sleight-of-hand.”

They ask whether extending policies popular with Democrats would be deficit neutral under a current policy baseline too.

Read the letter here.

Also, in House news: Ways and Means held a meeting for GOP committee members’ chiefs of staff and warned about what a $4.5 trillion cap in reconciliation means for the tax bill.

The message was that under the reconciliation instruction, tax writers will have to dig further into revenue raisers, repeal more clean energy tax credits than some members may like, or cut down how long the bill extends the Trump tax cuts in order to make that number work, according to multiple sources at the meeting. There are tough trade-offs ahead.

— Laura Weiss and Samantha Handler

Senate Judiciary jumps into tech fights

The Senate Judiciary Committee is working to make sure it remains a big player in the tech debate as the Senate Commerce Committee moves quickly to tackle thorny issues in this arena.

Here’s what Chair Chuck Grassley (R-Iowa) said when we asked if he wants Judiciary to have a voice in tech policy along with Commerce: “That’s why we’re having those hearings. It’s quite obvious.” Fair enough.

During a Grassley-led hearing yesterday on “Children’s Safety in the Digital Era,” lawmakers were eager to detail how they’re moving forward with issues in Judiciary’s jurisdiction.

Sen. Dick Durbin (D-Ill.) said he’d be bringing back with Sen. Josh Hawley (R-Mo.) the Stop CSAM Act, which would make it easier for victims of online child exploitation to have the material removed and would expand internet companies’ liability.

Durbin also said he’ll introduce a bill with Sens. Lindsey Graham (R-S.C.), Sheldon Whitehouse (D-R.I.), Amy Klobuchar (D-Minn.), Marsha Blackburn (R-Tenn.) and Hawley to sunset protections against civil lawsuits for websites over their users’ posts. That shield, under a controversial provision known as Section 230, has prompted fierce pushback by the tech industry when Congress tries to change the policy.

Last year, the Senate did pass two tech-focused bills that originated in the Judiciary Committee — both of them efforts to tackle the proliferation of nonconsensual nudes — and the panel moved several bills to the floor. Still, measures that attempt to change Section 230, like Durbin’s Stop CSAM Act, have largely fallen flat.

Tech issues on the Judiciary agenda will be following tech bills that the Commerce Committee already advanced. The Commerce Committee pushed through the TAKE IT DOWN Act, which also tries to deal with the posting of explicit deepfakes and or nonconsensual nudes. The bipartisan bill from Senate Commerce Committee Chair Ted Cruz (R-Texas) is in a strong position to be enacted. It was passed by the Senate last week.

Cruz’s panel also advanced his bill to keep kids off social media. Meanwhile, the Kids Online Safety Act, a bipartisan bill to regulate social media design for young users, also went through Commerce last year, as did a kids and teens privacy bill that came close to passing.

Hawley said he’d prefer the Senate start with his and Durbin’s exploitation bill and detailed a potential strategy to use unanimous consent to keep trying to move the bill through if it again makes it to the floor.

“I will do everything in my power to get it put on the floor,” he said. “If that means I have to UC it every week for the calendar year, I will absolutely do it.”

— Ben Brody and Lillian Juarez

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