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:
“What I’ve said is we have to have assurances that we’re going to be at a reasonable pre-pandemic level [of spending], and a process that ensures we’re going to actually achieve that… I’m not just talking about an aspirational number. I need a process that will actually achieve that spending level.”
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.
