Will reconciliation hit the House floor today?

IN THIS EDITION

A late night turns into an early morning – and big day for Johnson

News: Thune defends push to block California climate waivers

Dems wait on Mills in Maine

DCCC outraises NRCC … again

ICYMI: The Future of Medicine, the Legislative Landscape

THE TOP

A late night turns into an early morning – and big day for Johnson

Happy Wednesday morning.

Speaker Mike Johnson and House GOP leaders are finally getting there.

The House Rules Committee is in session, preparing the Republicans’ reconciliation bill for floor consideration. Johnson hopes to hold a rule vote today, followed by a floor vote on the full package as early as this afternoon or evening. He is incentivized to move quickly.

To give you a sense of just how long this Rules hearing will last, the committee finished hearing testimony from the first panel just before 4:30 a.m. The panel included the chair and ranking members of the House Oversight, Budget, Armed Services and Financial Services committees.

The second panel includes top lawmakers on the House Homeland Security, Judiciary, Natural Resources and Transportation and Infrastructure committees.

The third panel will include the chairs and ranking members from the most important committees – Agriculture, Energy and Commerce, Education and the Workforce and Ways and Means. We haven’t even gotten to Democratic amendments yet – 537 amendments have been submitted to Rules.

Most importantly, we should also note that, as of press time, the House Republican leadership hasn’t released its manager’s amendment for the reconciliation bill.

This will include all of the changes to the package that Johnson has been forced to negotiate, including a new SALT cap, changes to Medicaid work requirements and tweaks to clean-energy tax credits from the Inflation Reduction Act.

CBO released a score on the existing mega-package on Tuesday night. In response to queries from House Minority Leader Hakeem Jeffries and Rep. Brendan Boyle (Pa.), ranking Democrat on the Budget panel, CBO found that the GOP plan would increase the deficit by $2.3 trillion over a decade. This would trigger automatic spending cuts in Medicare and other programs without congressional action.

It would also boost the incomes of the richest 10% of Americans while lowering the incomes of the lowest 10%, CBO assessed.

Boyle called the GOP bill “absolutely devastating” for working Americans.

Republicans routinely trash CBO scoring and analysis as shoddy and unreliable, so they’ll ignore these findings. But there are already protestors huddling outside the Capitol decrying hundreds of billions of dollars in proposed cuts to Medicaid.

GOP wheeling and dealing. There have been major changes to the bill in the last 24 hours. The most significant is the overhaul to the state-and-local tax deduction provision approved by the Ways and Means Committee.

Johnson has discussed with blue-state Republicans a new structure that would lift the SALT cap from $10,000 to $40,000 for those making $500,000 or less.

The income cap and deduction limit would escalate by 1% every year for a decade. This is short of what the SALTers wanted – they wanted to fix the so-called marriage penalty. And it’s more than what many in the House Freedom Caucus will be willing to accept.

But HFC is also expecting changes that it will be happy with. Johnson has discussed with conservatives phasing out IRA tax credits for clean-energy investment and production tax credits beginning in 2028. In the original text, the credits began to phase out after 2028. The deal Johnson has discussed with the HFC would also include a carveout for nuclear tax credits.

We’re already hearing an argument from the House Freedom Caucus that Johnson should delay a vote on the package. Conservatives argue that Johnson is seeking to meet an arbitrary deadline – Memorial Day. Some have begun to say that the GOP leadership should revert to two bills, an idea that the House and Senate Republicans leaders nixed months ago.

Johnson will most likely start out with two no votes on the floor: Reps. Chip Roy (R-Texas) and Thomas Massie (R-Ky.). Depending on attendance, he’ll have one or two more to spare.

Bottom line. So can Johnson hold a vote today? Yes. If House GOP leaders get the manager’s amendment out at some point this morning, he could hold a vote late today. GOP and Democratic lawmakers will both gripe that they didn’t have enough time to review the changes – and that will be a legitimate complaint.

But for many reasons, Johnson wants to go today. No. 1: He’s hell bent on meeting this Memorial Day deadline. No. 2: Republicans expect to have attendance problems beginning Thursday. No. 3: These bills rarely get easier to pass as time goes on.

All of the changes that Johnson is making will make it more likely that the Senate is going to make significant alterations to the package.

Thune’s ‘big problem’ on SALT. Let’s talk about the Senate. Senators will certainly want to change the phase out of IRA provisions. Johnson’s proposed SALT deal could be a problem with the Senate Republican Conference.

Senate Majority Leader John Thune is a longtime opponent of boosting the SALT cap.

We interviewed Thune Tuesday and asked the South Dakota Republican what he thought of Johnson’s Monday night offer — a four-year $40,000 cap for couples making under $751,600 — and whether it would fly in the Senate. Thune seemed shocked that the SALTers would reject that offer.

“This is purely a House play and designed to deal with the political challenge they have to get to 218,” Thune said. “But, I mean, that seems like an incredibly generous offer.”

One more thing: Thune alluded to possible markups in Senate committees once the legislation arrives from the House. But that’ll be dictated by the House’s timing and what senators think of the proposal.

“I’m a regular order guy. I think you can improve the product,” Thune said. “But obviously, depending on what happens in the House and the timeline we have to work with, getting committees up and going and doing their thing takes a while — and how ready the product is for prime time… There are certain things the Senate wants to have its imprint on.”

Democrats’ messaging push: House Majority Fund, a Democratic group aligned with House Democratic leadership, issued talking points for members on the bill. Here’s their memo.

The dos: Focus on how the legislation will raise prices, hurting the vulnerable while benefitting the wealthy.

The don’ts: Stress deficit increases, use “overly technical economic arguments,” “hyperbolic rhetoric” such as a “murder budget.”

“Avoid statements about ‘tax cuts for the rich’ without mention of consequences to everyday Americans,” the memo says.

– Jake Sherman, Laura Weiss, John Bresnahan, Andrew Desiderio and Ally Mutnick

Happening tomorrow: Small Business and Supplier Development with SBA Administrator Kelly Loeffler. Jake Sherman will lead the conversation, followed by a fireside chat with Andrea Albright of Walmart and Jeff Picken of Beaumont Products. Don’t miss it — RSVP now.

THE SENATE

News: Thune defends push to block California climate waivers

Senate Majority Leader John Thune is diving into a contentious fight over the Senate’s institutional prerogatives, guiding his conference through a complex and potentially risky high-stakes standoff with Democrats.

On Wednesday, GOP senators will effectively vote to disregard the Government Accountability Office — and the Senate parliamentarian by extension — in order to use the Congressional Review Act to block California’s ability to set strict environmental standards.

During an interview in his Capitol office Tuesday, Thune defended what he called a narrow assertion of congressional authority. And he dismissed the notion that Republicans are setting a precedent that weakens the filibuster.

“Obviously the Democrats are going to scream bloody murder and say you’re undermining the filibuster,” Thune told us. “This is a very narrow, very novel case in which you’re dealing not with legislation but with an administrative ruling by an executive branch agency.”

The backstory. Senate Republicans have used the CRA to overturn several Biden administration regulations, taking advantage of the expedited floor consideration and simple-majority vote threshold allowed under the 1996 law.

But Wednesday’s move, which Republicans have been debating internally for weeks, has set off a partisan firestorm centered around the chamber’s own rules.

Senate Democrats warn that defying GAO — which says the waivers don’t qualify as rules under the CRA — will set a precedent that expands the scope of the CRA and chips away at the legislative filibuster.

In the weeds. The debate has forced Senate GOP leaders to confront difficult questions about how it may impact the institution long-term. Thune has already ruled out voting to overrule the parliamentarian when it comes to reconciliation.

It has also exposed a fresh bit of hypocrisy. Just a few years ago, nearly every Democratic senator voted to scrap the legislative filibuster, even as they’re warning today that overruling the parliamentarian would mean going nuclear.

Thune and Senate Majority Whip John Barrasso spent the last few weeks persuading GOP holdouts concerned about the precedent that could be set by overruling GAO.

Thune consulted with Sen. Mitch McConnell (R-Ky.), the former GOP leader who told colleagues he supports moving forward with the CRA votes. And the South Dakota Republican said the issue has been “fully vetted” by his conference.

At the same time, Thune acknowledged today’s votes will be unprecedented and that they “could create a precedent for the future, but it’s very narrow about the CRA.”

“The question before the body is, is the GAO gonna decide this or not?” Thune said. “For the most part, our members feel comfortable saying this is something Congress ought to be heard on.”

Dems respond. Democrats claim Republicans will be establishing a new standard for CRA consideration: that Congress can trigger the CRA’s expedited procedures and filibuster bypass even if GAO says it doesn’t qualify as a rule under the CRA.

Sen. Alex Padilla (Calif.), the Rules Committee’s top Democrat, detailed this possibility in a recent memo to Senate offices.

Thune countered that this is an unusual case in which GAO, which usually sides with Congress, is constraining lawmakers’ authority.

“You can’t anticipate everything that’s gonna happen in the future,” Thune said. “[But] I don’t think you can draw a broad application to this narrow set of circumstances.”

But Sen. Ron Wyden (D-Ore.) warned that a future Democratic-controlled government would use the GOP move to “revisit decades worth of paltry corporate settlements, deferred prosecution agreements, and tax rulings that were overly favorable to multinationals and ultra-wealthy individuals.”

— Andrew Desiderio and John Bresnahan

THE SENATE MAP

Dems wait on Mills in Maine

How thin is the Democratic bench to take on Sen. Susan Collins (R-Maine)? Their top recruit, Gov. Janet Mills, will be 78 on Election Day and isn’t even sure she wants to run.

But especially now with Rep. Jared Golden (D-Maine) passing on a statewide campaign, Mills is Democrats’ best bet to save her party’s chances of knocking off Collins.

Sen. Angus King (I-Maine) summed up the dearth of Democratic challengers succinctly when we asked his thoughts on the Senate race.

“There isn’t one yet, as far as I know,” King said.

Why Maine matters: Senate Democrats need to oust Collins, the only Republican up for reelection in a state President Donald Trump lost. But the fifth-term incumbent, who is also a septuagenarian, is politically savvy and formidable, leaving many ambitious Maine Democrats wary of challenging her.

Mills, first elected in 2018, is serving her last term as governor. Mills is popular and instantly upped her national profile by sparring with Trump at the White House over transgender athletes.

The governor isn’t eager to run for another office. But Mills is listening to the argument that she is the strongest candidate and has an obligation to consider it, per people familiar with her thinking. The clash with Trump has made Mills more receptive to recruitment entreaties but she is in no hurry, they said.

“It’s a big mystery,” said Rep. Chellie Pingree (D-Maine), when asked if she thought Mills would run. “She’s been saying to people, ‘Yeah, I’m thinking about it.’”

The race dynamics: Jordan Wood, former Rep. Katie Porter’s (D-Calif.) chief of staff, is the only notable Democrat in the race as of now. But national Democrats don’t view Wood as a serious candidate who can defeat Collins.

Part of Democrats’ recruitment problems stems from the race to replace Mills in the Blaine House. A wide-open gubernatorial contest is far more appealing. Among those running or preparing to run: former Maine State House Speaker Hannah Pingree, energy executive Angus King III, former Maine Senate President Troy Jackson and Maine Secretary of State Shenna Bellows.

Senate Democratic recruiters could try to convince one of them to jump to the Senate. But none have Mills’ stature statewide. Because she would enter with a high name ID, Mills can afford to wait months to enter the race and still mount a strong campaign.

The GOP view: Collins, 72, hasn’t officially announced she’s running for a sixth term. But Collins has said she intends to run and told local outlet WABI she expects to “make a formal announcement later this year, towards the end of the year.”

Republicans are gleeful about the Democratic recruiting struggles. “Nobody likes losing, and numerous Democrat candidates seem to have figured out losing is exactly what will happen if they challenge Susan Collins,” NRSC spokesperson Nick Puglia said in a statement.

In a statement, DSCC spokesperson Maeve Coyle said “Democrats will have a strong candidate in Maine” and attacked Collins for paving the way for the overturning of Roe v. Wade.

— Ally Mutnick and Max Cohen

THE CAMPAIGN

DCCC outraises NRCC … again

House and Senate Democratic committees had more cash banked at the end of April than their GOP counterparts, per campaign-finance filings due Tuesday.

The DCCC raised just over a million dollars more than the House GOP campaign arm and had nearly $13 million on hand. The NRCC, however, paid down its 2024 debt. House Democrats have not.

The NRSC outraised the Senate Democratic campaign arm by nearly $3 million but ended April with more in debt than it had cash on hand.

The full breakdown: The DSCC raised $5.6 million, spent $6.7 million and ended with $13 million in the bank and $9.5 million in debt.

The NRSC raised $8.3 million, spent $5.6 million and ended with $6.3 million in the bank and $8 million in debt.

The DCCC raised $8.1 million, spent $9 million and ended with $32.9 million in the bank and $4 million in debt.

The NRCC raised $7 million, spent $10.5 million and ended with $20.3 million in the bank and no debt.

Another fundraising nugget: David Hogg’s PAC, Leaders We Deserve, spent $579 on a ClassPass subscription. A spokesman for the PAC described it as a fitness benefit offered to the group’s employees.

– Ally Mutnick

SPECIAL PROJECTS

ICYMI: The Future of Medicine, the Legislative Landscape

In case you missed it: The second installment of The Future of Medicine series went live on Tuesday, laying out the legislative landscape for the regulation of drugs entering the market.

We reported how Hill Republicans are aiming to roll back provisions in the Medicare Drug Price Negotiation program that treat small and large molecule drugs differently. Plus, we detailed how the White House’s prescription drug pricing executive order is being received among GOP lawmakers.

Read the article here and don’t forget to listen to the podcast too.

— Max Cohen

MOMENTS

CLIPS