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The first delay: House Budget panel likely to punt markup over spending cuts

The first delay: House Budget panel likely to punt markup over spending cuts

The House Budget Committee is unlikely to mark up a budget resolution this week, the first setback for Speaker Mike Johnson’s quest to enact President Donald Trump’s agenda, according to GOP leadership sources and lawmakers.

Hardline conservative House Republicans are “not even close” to a deal on the magnitude of spending cuts they expect in the reconciliation package, one lawmaker told us. House Budget Committee members held a call on Sunday to discuss the latest updates.

Johnson and House Majority Leader Steve Scalise have laid out an aggressive schedule to pass the bulk of Trump’s agenda, which had the Budget Committee slated to mark up the resolution to unlock reconciliation this week. Johnson said he expected the House to pass the resolution the week of Feb. 10. And he wanted the House and the Senate to wrap up consideration of the budget resolution by the end of the month.

The delay, although not at all fatal for Trump’s agenda, does speak to larger problems inside the House Republican Conference when it comes to just how deeply the GOP intends to cut spending — if it can.

Trump has said that Republicans can’t make changes to Social Security or Medicare as part of the reconciliation package (the rules don’t allow it anyway for Social Security), which leaves GOP lawmakers with only a part of the annual budget from which they can look for savings. As we noted in The Vault Sunday, House Republicans are looking at counting potential revenue from Trump’s new tariffs on China, Mexico and Canada as they consider the reconciliation bill’s deficit impact, even though the revenue wouldn’t come from congressional action.

But the House Republican Conference is a politically complicated place. Although it’s dominated by the hardline conservatives, Johnson’s slim one-seat margin means that the GOP can’t cut too deeply or they risk losing the middle of the conference. It’s a nearly impossible needle to thread.

The delay also will reignite other uncomfortable conversations for Republican leaders. Can the House pass a budget resolution at all? And, furthermore, will the Senate begin to move its own budget resolution and jam the House — without the steep cuts that the House GOP is demanding?

Another question. One of the big questions that GOP leaders need to settle in the budget resolution is the baseline Republicans use to calculate the cost of extending the 2017 Trump tax cuts.

This has been a key point of conversation — and contention — among House Republicans.

The GOP is looking to the Senate parliamentarian for guidance. That’s because the “current policy baseline” that top Republican tax writers want to use to make permanent for the Trump tax cuts easier hasn’t been done in reconciliation before.

There haven’t been clear answers from the Senate side on the issue as of this week, and House Republicans may not want to move forward with the baseline without that certainty. Senior Republicans have also sought guidance on the matter from the legal counsels for the Congressional Budget Office and House Republican leadership offices.

But the Senate GOP could still switch the baseline later on if the parliamentarian gives a sense it’s a workable option.

The current policy baseline would mean that extensions of the Trump tax cuts that expire at the end of the year are considered zero-cost, rather than adding up to more than $4 trillion over a decade. But the big win would be a path to permanency for the signature Republican tax law, or at least key parts of it.

To meet Senate reconciliation rules, the bill won’t be able to increase budget deficits outside the 10-year budget window. Finding hundreds of billions of dollars per year in offsets for that period of time is likely impossible for Republicans. But if the extensions are considered cost-free, that eases the problem.

That doesn’t mean it’s a guarantee in the House, where every decision is fraught right now thanks to the chamber’s razor-thin majority.

Correction: An earlier version of this story incorrectly suggested Medicare cannot be altered through the reconciliation process. It can.

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