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How Republicans are planning to structure their budget resolution

Republicans question Vance’s push against Houthi strikes

The Vault: Democrats ask OGE to investigate Lutnick’s Tesla boosting

A conversation on U.S. defense tech

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How Republicans are planning to structure their budget resolution

Happy Friday morning.

There are just 59 days until Memorial Day, Speaker Mike Johnson’s deadline for getting a massive reconciliation package to President Donald Trump’s desk.

We have some new reporting about the compromise budget resolution that Republican leaders must push through both chambers in order to unlock the 50-vote threshold for passage in the Senate — and give a win to Trump.

The compromise resolution, which Republican lawmakers and aides are crafting behind the scenes, will likely include two sets of extremely different budget-cut instructions: a minimum of $3 billion in spending cuts for Senate committees and a $1.5 trillion floor for cuts from the House.

Why the big disparity? We’ll explain.

GOP congressional leaders want to set the Senate’s spending cut target low enough to make rank-and-file Senate Republicans comfortable and give them lots of options down the line. The Senate is stressing the need for wiggle room which, crucially, will help ensure compliance with the so-called Byrd Rule in the next — and more complicated — phase of the arcane reconciliation process.

At the same time, Republican leaders need to make the House instructions high enough to give conservatives hope that Congress will somehow enact trillions of dollars in spending reductions.

This two-tier approach may or may not expedite the passage of the compromise budget resolution. Senate Republicans are in a different place than their House GOP counterparts. But it delays the big fights over how much money Republicans are going to cut from the federal government — and where they will cut it.

More details: Senate Republicans are planning to instruct the Senate Agriculture, Energy and Natural Resources, and HELP committees to each cut at least $1 billion, making up the $3 billion floor for cuts. This is hundreds of billions of dollars less than what House Republicans have specified.

They’d also maintain the same spending instructions that are in the Senate-passed “skinny” budget resolution for border security and Pentagon funding. That means instructing Senate committees to spend up to $150 billion on defense, which is more than the House’s $100 billion maximum. This is a big priority for Senate defense hawks.

Senate Republicans want to take a similar approach to the tax committee instructions, giving some more breathing room in the Senate number. But they still need clarity from the parliamentarian on the “current policy baseline,” a way of scoring tax cuts that will dramatically reduce the cost. The parliamentarian needs to issue a ruling on this before Senate Republicans move forward with a compromise budget resolution vote.

If Senate Republicans can use the baseline tactic, that will change what the final instructions look like for the House and Senate tax committees. That’s because the baseline would make extending much of the 2017 tax cuts cost-free, and GOP deficit hawks would still want to see offsets for other portions of the tax package.

This strategy for the compromise budget resolution and the Senate’s instruction numbers isn’t set in stone yet. But it’s what Republicans are proceeding with right now with the hopes of putting a compromise resolution on the Senate floor as soon as next week.

The political risks: We’re now going to go deep into whether this compromise budget resolution can get the votes to pass. It could spook House deficit hawks who insisted that their reconciliation instructions lock Republicans into deep cuts.

But first, it’s got to get through the Senate, which has its own fiscal conservatives to contend with.

We don’t expect a huge level of opposition in the Senate, but there are a handful of Republicans whose votes GOP leaders need to lock down. They can’t lose more than three votes. Privately, the leadership feels good where they are but won’t take anything for granted.

Sen. Rand Paul (R-Ky.) is a no as long as the budget resolution includes a debt limit increase, which it likely will — to the tune of $5 trillion.

Sens. Ron Johnson (R-Wis.) and Mike Lee (R-Utah) both want more aggressive spending cuts than the House’s $1.5 trillion floor, especially alongside a debt-limit hike.

“I’d have to see language. I’m very skeptical of that though,” Lee said of the plan to set a lower spending-cut floor for Senate committees.

Here’s Johnson on what he needs to see before voting for the budget resolution:

Then there’s Sen. Josh Hawley (R-Mo.), who’s demanding a commitment on passing his bill to reauthorize a radiation compensation program that lapsed last year. Hawley has been working to get this over the finish line for months.

“I’m not gonna vote for a debt ceiling increase unless leadership commits to helping Missourians poisoned by nuclear radiation… If the leader wants it, it will happen,” Hawley said.

Some deficit hawks are on board with the plan, though. Sen. Rick Scott (R-Fla.) said he’s comfortable with it, but will want to see bigger spending cuts in the final reconciliation bill.

In the end, the biggest factor will always be Trump. Johnson and Senate Majority Leader John Thune will need him to lock down votes. If a small number of GOP lawmakers stand in the way at any stage of the reconciliation process, they’ll feel the heat of holding up Trump’s entire legislative agenda. This is the critical card that Republican leaders will be able to play again and again.

— Jake Sherman, Laura Weiss, Andrew Desiderio and John Bresnahan

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WASHINGTON X THE WORLD

Republicans question Vance’s push against Houthi strikes

The infamous Signal group chat where top Trump administration officials were discussing U.S. airstrikes in Yemen has sparked a political furor that includes a bipartisan inquiry into concerns that classified or highly sensitive information was communicated on an unsecure platform.

Yet brewing under the surface are Vice President JD Vance’s messages in the chain. Vance argued against striking Houthi terrorists, which stunned many Republicans despite knowing full well that the views Vance expressed are in line with his long-held beliefs on foreign policy.

Vance lamented that the strikes would amount to “bailing out Europe again.”

In a subsequent tranche of messages published by The Atlantic on Wednesday, Vance said he was “not sure the president is aware how inconsistent this is with his message on Europe right now.” Vance noted that European nations would benefit more from the strikes than the United States because a much higher percentage of European trade runs through the areas Houthi terrorists are disrupting.

President Donald Trump ultimately ordered the strikes, prompting cheers from GOP leaders. But the messages showed that Vance is consistent in his foreign policy views even when the cameras are off, no matter how intensely Republicans disagree with his position.

“I would rather see debate than no debate,” Sen. Mike Rounds (R-S.D.) said, before adding: “I disagree with [Vance’s] assessment personally.”

Sen. Thom Tillis (R-N.C.), a defense hawk who has sparred with Vance over Ukraine aid, nodded to Vance’s consistency as well. The Signal messages not being intended for public reveal only served to underscore Vance’s views on Europe, dispelling any notion that this is just for show or simply intended to play to the MAGA base.

Vance’s argument in the text chain is born out of a belief that European nations aren’t doing enough to provide for their own security. Many Republicans agree with that general notion. But they don’t think it’s a reason to not go after terrorists who threaten U.S. interests. These Republicans were heartened that Vance was in the minority within Trump’s national security team.

“Let’s just say I’m glad that President Trump’s position won out in this particular moment,” said a GOP senator who was granted anonymity to deliver a candid evaluation. “It’s a stunning admission to say you hate the Europeans so much that you’re willing to abandon our own responsibilities.”

Vance’s team declined to comment.

The internal deliberations that played out on the Signal chain were normal for major national security decisions, although this would usually happen in a more secure setting.

Vance’s allies in the Senate said it showed that Trump isn’t surrounding himself with yes-men.

“They all thought it was private. It wasn’t. They learned their lesson from it,” Sen. Jim Banks (R-Ind.) said. “President Trump likes and respects JD. He likes having him around. And I think it says a lot that JD can flag concerns, speak up. I think President Trump expects that.”

Newsy McConnell speech: Sen. Mitch McConnell (R-Ky.) accepted an award Thursday night at the U.S.-Ukraine Foundation. The former Senate GOP leader not only doubled down on his support for Ukraine, but also had some harsh words for the Trump administration’s ongoing peace talks with Russia.

McConnell called out Trump’s advisers, though not by name, and said they are essentially urging the president to ignore history. Here’s an excerpt:

The Kentucky Republican went on to slam the “embarrassing naivete” of Trump’s team. He said that unless the U.S. changes course, “the outcome we’re headed for today is the one we can least afford: a headline that reads ‘Russia wins, America loses.’”

— Andrew Desiderio

PUNCHBOWL NEWS EVENTS

A conversation on U.S. defense tech

On Thursday morning, we hosted “A Conversation on U.S. Defense Tech,” an event that featured networking and a fireside chat about the growth of technology used for national security. During the event, Punchbowl News Founder Jake Sherman sat down for a conversation with Jane Lee, founder and chair of the Software in Defense Coalition and Veronica Daigle, president of national security practice at Red Cell Partners. Thank you to the Software in Defense Coalition for partnering with us on this event.

Joining us: Elliot Seckler of the Office of the Secretary of Defense; Max Stahlberg of the United States Space Force; John Gill of the Defense Innovation Unit; Spencer Davis of the Information Technology and Innovation Foundation; Meghan Murphy of the Meridian International Center; Julian Plamann of the National Guard Association of the United States; Heather Hopkins of Amazon Web Services (AWS); Mike Brandhuber of Vita Inclinata Technologies; John Galer of the Aerospace Corporation; and Howard Weitzner of Ernst & Young.

… AND THERE’S MORE

Job Moves. Erica Suares, who was a senior adviser to former Senate Majority Leader Mitch McConnell, has joined American Policy Ventures, an organization designed to “de-risk the work of cross-partisan policymaking and collaboration for our nation’s leaders.” Suares will be a senior vice president.

Suares was McConnell’s liaison to Senate Republican offices during her tenure with the Kentucky Republican. She is also an alum of former Sen. Jim DeMint’s (R-S.C.) office, the Heritage Foundation, Mitt Romney’s 2012 campaign and the George W. Bush White House.

News: Elect Democratic Women is endorsing Rebecca Cooke in Wisconsin’s 3rd District. Cooke was the Democratic candidate in the race in November and narrowly lost to Rep. Derrick Van Orden (R-Wis.) while outrunning the top of the ticket. EMILYs List also recently endorsed Cooke.

— Max Cohen

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