Here’s something Speaker Mike Johnson should be worried about: Senate Republicans are gearing up to change the House’s reconciliation package.
The big questions are by how much, and can House Republicans live with those changes?
Johnson hopes to have the House GOP reconciliation package on the floor next week. If Johnson and his leadership team can pass it, then Senate Republicans will have several weeks to debate and revise the package to pass it before the debt limit needs to be raised in mid-July.
This is a hugely complex legislative vehicle that will directly impact nearly every American – plus the political outlook for President Donald Trump and the GOP-controlled Congress.
There’s widespread agreement that changes on issues ranging from tax credits to health care provisions will be necessary to satisfy different factions within the Senate GOP Conference, as well as the Byrd Rule.
But you should expect changes.
“We are, both the House and the Senate, trying to stay as close as we can on policies,” Senate Finance Committee Chair Mike Crapo (R-Idaho) said. “That being said, the House is going to have a different work product than we end up with here.”
That’s an unappealing prospect for many House Republican moderates wary of voting for controversial provisions that may be dramatically different once the Senate has its say.
Conservatives won’t like it either, especially if Senate Republicans balk at the hundreds of billions of dollars in spending cuts to Medicaid and other social safety net programs House Republicans are proposing.
“The goal is to make sure we do the best job possible so the things they might want to deal with are as limited as possible,” said House Majority Whip Tom Emmer, who huddled with Senate Republican whips on Tuesday.
Emmer added: “We’re gonna pass this bill and send it to them. When it gets to them, it’s their job to do what they need to do to that bill and get it back to us as soon as possible.”
Tax: GOP tax writers worked closely to tweak the 2017 tax cuts in an attempt to make the current policy baseline work in the Senate.
Republicans plan to use the accounting tactic to make the tax provisions permanent without needing big offsets down the line under reconciliation rules. Those adjustments — many of which grant some extra tax cuts — are in the Ways and Means Committee bill.
But beyond that, the Senate will still have a lot to work through, including revenue raisers in the package. There are GOP senators uneasy about the net $515 billion of clean energy tax credit repeals included in the House package.
“We’re gonna have a little bit of a different view, so we’ll wait to see what they come out with,” Sen. Shelley Moore Capito (R-W.Va.) said about the House’s clean energy provisions.
Senate Republicans also aren’t thrilled with a SALT cap above $10,000, which has to be included for Johnson to push this bill through the House.
GOP senators will push to make key business tax breaks for R&D, interest expenses and buying short-term assets like machinery permanent. House Republican tax writers would love permanence, but that’ll raise the bill’s cost. Ways and Means had to stick to an under $4 trillion price tag to please House deficit hawks, but the Senate could blow past it.
Ag: Senate Agriculture Committee Chair John Boozman (R-Ark.) said he’s coordinated with his House counterparts to include risk management tools in the farm bill section of the reconciliation package.
But there are larger problems ahead, as Boozman has raised concerns that some of the other House provisions won’t survive the Byrd Rule, including a partial rewrite of the farm bill.
“We’re going to wait and see what they mark up,” Boozman said.
House Agriculture Committee Chair GT Thompson (R-Pa.) told reporters on Tuesday that he’s held discussions with Boozman over this issue.
“We’ve worked with him, we’ve worked with the parliamentarians. Ultimately, the Senate will have the final say. But we’ve really done our due diligence to try to avoid any type of conflict with that Senate rule,” Thompson said.
Medicaid: Some of the most controversial House GOP policy moves – especially Medicaid cuts – are winning Senate converts, although Republican senators aren’t committing to backing the reconciliation package yet.
“I think it’s getting better,” said Sen. Jim Justice (R-W.Va.). Justice and Capito were among several red-state Republican senators concerned about House GOP proposals to alter how the federal government reimburses states for Medicaid recipients or impose per capita caps. These senators have lots of Medicaid recipients among their constituents too.
As it is, House Republicans are making less-sweeping FMAP revisions while imposing new work requirements and eligibility checks. But health care changes in the reconciliation bill will still result in 8.6 million Americans losing health insurance.
Sen. Mike Rounds (R-S.D.) summed up the fluid nature of the final package by noting that making the Trump tax cuts permanent and extending the debt limit are the only two must-pass provisions.
“Other than that, everything else is up for discussion for the most part,” Rounds said.
Also: Johnson met with the SALT Caucus Tuesday evening. They’re inching closer to finding a deal but it hasn’t happened yet. The group discussed different expiration dates for a higher cap – an earlier expiration date would lower the cost. The two sides broke up last night with the understanding that they would run numbers to figure out the costs and reconvene and hopefully notch a deal today.
One of the options under consideration was a $40,000 cap for individuals and an $80,000 cap for couples. This would be very pricey and would be a big win for SALTers.
