🔵 The Portal: Reconciliation rifts

IN THIS EDITION

The under-the-radar reconciliation rifts

What we’re watching

Consequential week for House, Senate appropriations

THE TOP

The under-the-radar reconciliation rifts

Happy Monday morning.

Welcome to your second week of The Portal, our Monday and Thursday morning newsletter that dives deep into all things policy and legislation. The Portal with Enbloc AI is Punchbowl News’ latest product that makes you better at your job.

House lawmakers return to Washington this week, refueled after a week-long recess and ready to fight with their Senate colleagues.

While the House was out, Senate Republicans released a key piece of their reconciliation bill, the Senate Finance text. Now that we have the full picture of the Senate GOP’s pitch, House Republicans will do their best to push the Senate to change language that won’t be palatable in their chamber.

“We can’t make everybody happy. Maybe we can’t make anybody happy. Some people are going to have to settle for a ham and egg sandwich without the ham,” Sen. John Kennedy (R-La.) said. “But that’s why God made votes.”

Kennedy said before senators worry about the House, Senate Republicans have their own differences to hash out. That’s true, but we still expect House Republicans to come back into town with plenty of complaints.

The biggest cross-chamber disagreements will be over the most controversial issues that the GOP have been bickering over for months:

— How far to go on health care provider tax restrictions.

— Food assistance (SNAP) and Medicaid work requirements.

— How much to lift the cap on state and local tax deductions (SALT).

But there’s several other measures in the Senate bill, or in some cases not in the Senate text at all, that will be hard to swallow for certain House Republicans. Let’s take a look at the contentious issues that aren’t getting a lot of attention.

EV fee. The Senate didn’t include a $250 annual registration fee on electric vehicles and a $100 fee on hybrids proposed by the House Transportation and Infrastructure Committee. The fee was going to be another revenue stream for the depleting Highway Trust Fund, an important step forward for the transportation panel ahead of major highway bill talks.

The House transportation committee already had to strip a vehicle registration fee from its reconciliation text. Losing the EV fee would be another loss for the panel that is struggling to find ways to boost the highway fund.

Sen. Bernie Moreno (R-Ohio), who had pushed Senate GOP leadership to include the fees in the Senate Finance text, said the issue was that the fees were annual. Moreno said senators were concerned that there was no way for the federal government to collect the annual fees.

“What we got to do is make it a one time fee,” Moreno said. “That’s going to make it much more efficient.”

A House aide said the panel will monitor what happens in the Senate and then gauge how to move forward.

Doc fix. Another provision left out of the Senate Finance section would have reversed a physician pay cut from Medicare.

The measure, commonly referred to as the “doc fix,” was a priority for Rep. Greg Murphy (R-N.C.). Murphy had received a commitment from House GOP leadership that the language would be included in the House’s version of the reconciliation text.

Sen. Roger Marshall (R-Kan.) who’s one of the bipartisan sponsors of a bill that would undo the pay cut, said there was some mixed messaging from physician groups that led to the Senate cutting out the provision. Marshall is working to get it back into the text, he said.

“There’s some political undermining going on,” Marshall said. “There’s been a huge effort by people that are trying to kill the whole bill and this is one more way they can take away one of the sweeters.”

Public lands. The Senate Energy and Natural Resources Committee included language that would allow for the sale of public lands, broadening a measure that failed to pass in the House.

Sen. Mike Lee’s (R-Utah) reconciliation text would make public land in 11 Western states eligible for sale, excluding Montana. There’s good reason for that. Montana Republican Ryan Zinke killed a similar measure in the House, except that one only applied to Utah and Nevada.

It’s unclear what may happen to this in the Senate. One Senate aide said it’s possible the measure doesn’t make it out of the Byrd bath, as Democrats can argue it violates the chamber’s reconciliation rules that require provisions to mostly affect spending and revenue as opposed to policy related.

Lee, in a post on X on Sunday night, said there will be changes to the provision in the coming days. It’s unclear what exactly that will be.

There may be enough Senate opposition to kill it before it even reaches the House. Montana GOP Sens. Steve Daines and Tim Sheehy are against the sale of public lands generally.

Sen. Thom Tillis (R-N.C.) has issues with the provision, too, saying he’s “working” on changes. Tillis’ state wouldn’t be affected, but he’s been a supporter of public lands.

If Lee’s proposal does make it to the House, we expect Zinke to put up another fight. Rep. Mike Simpson (R-Idaho) will also be a problem. Simpson is a staunch opponent of public land sales. Land in Idaho is included in the Senate bill, while it wasn’t included in the House version.

– Samantha Handler

THE WEEK AHEAD

What we’re watching

The House is back! House lawmakers will consider the first appropriations bill of FY2026, the MilCon-VA funding bill. The legislation received no Democratic support in committee.

The House will also consider several bills under suspension, including a resolution condemning the killings in Minnesota.

But the real action is over in the Senate. Senate Republicans are still figuring out their own reconciliation bill. They’re aiming to vote on their package this week, which would then kick it back to the House.

Monday: The House Rules Committee will meet to consider the appropriations bill.

The House Appropriations subcommittees on the Legislative Branch and Ag-FDA will markup their respective funding bills.

Tuesday: Senate Appropriations subcommittees will hold budget hearings on the Navy and the Department of Veterans Affairs.

The Senate Judiciary Committee will hold a hearing on how to protect the US from cartels.

The House Energy and Commerce Committee will hold a budget hearing with HHS Secretary Robert F. Kennedy, Jr.

The House Appropriations Homeland Security subcommittee will finish marking up its funding bill.

The House DOGE subcommittee will hold a hearing on codifying the DOGE cuts.

Wednesday: OMB Director Russ Vought will testify at the Senate Appropriations Committee on the administration’s rescissions package.

A Senate Appropriations subcommittee will hold a budget hearing for the Department of Justice.

The Senate Foreign Relations Committee will hold a meeting to consider several ambassador nominations.

The Senate HELP Committee will hold a nomination hearing for CDC director nominee Susan Monarez.

The Senate Commerce, Science and Transportation Committee will hold a meeting to consider several bills and Bryan Bedford’s nomination to be the FAA administrator.

Thursday: The Senate HELP Committee will hold a meeting to consider several Labor and Education Department nominations, including former Rep. Anthony D’Esposito’s (R-N.Y.) nomination to be the inspector general for labor.

The full House Appropriations Committee will markup the Legislative Branch funding bill.

The House Financial Services Committee will hold an oversight hearing on Rohit Chopra’s actions while leading the Consumer Financial Protection Bureau.

– Samantha Handler

FUNDING THE GOVERNMENT

Consequential week for House, Senate appropriations

Two big appropriations storylines to watch this week: the House will vote on the first FY2026 funding bill and OMB Director Russ Vought will face senators.

House and Senate appropriators have been on different tracks since the start of this appropriations season, but this week will reveal more about how they’re diverging. In particular, this week will show whether there’s any hints of bipartisanship that can be achieved in funding bills this year.

The House approach. In the House, no Democrats are expected to support the MilCon-VA funding bill that will come to the floor this week. The legislation would provide a 3% boost above FY2025 levels, but received no Democratic support in committee.

This is because House Republicans are trudging ahead on appropriations without buy-in from Democrats. House Appropriations Chair Tom Cole (R-Okla.) isn’t even coordinating with his counterpart, Senate Appropriations Chair Susan Collins (R-Maine).

The House funding panel will also wrap up more bills in committee, including the legislative branch bill, which will include funding for Capitol Police, and the Homeland Security Department funding legislation.

House Republicans are largely on track to hit their goals of getting the spending bills out of committee by the end of July. But there have been some snags.

Markups took so long last week that the panel had to punt meetings originally scheduled for this week — Financial Services and General Government, plus National Security, Department of State and Related Programs — to next week so members can finish up the Homeland Security and Agriculture funding bills.

Vought’s Senate return. The former Senate staffer’s appearance before the appropriators will determine both the fate of the Trump administration’s rescissions package and bipartisan FY2026 talks.

The $9.4 billion rescissions package is going through the Senate funding panel as it doesn’t currently have enough votes to make it through the full Senate. Vought’s job on Wednesday will be addressing senators’ concerns about cuts to PEPFAR and public broadcasting, Sen. John Kennedy (R-La.) said.

If Vought succeeds, that means the rescissions package will likely pass the Senate and bipartisan appropriations negotiations will fall apart. Sen. Patty Murray (D-Wash.), the top Senate Democratic appropriator, has warned it would be nearly impossible for Democrats to agree to a funding deal with rescissions on the table.

Plus, Vought would be more empowered to push the boundaries of the rescissions procedure. Vought has floated using “pocket rescissions” later this year. Most GOP appropriators we’ve talked to believe that procedure is illegal. We’ll see if that comes up at Vought’s appearance, too.

– Samantha Handler