Steel yourself for a week of chaos.
Dow Futures are down more than 3% as of around 5 a.m.. Global markets are selling off once again because of President Donald Trump’s tariff regime. A good point here: If the market closes where futures are now, this will be the biggest three-day market sell off in nearly four decades.
Upon arriving in Washington on Sunday, Trump was asked about the market drop.
“Sometimes you have to take medicine to fix something,” Trump said.
Senate and House Republicans are beginning to panic. Although A) We don’t think that Congress will pass a bill to take tariff power away from the president. And B) It’s an open question as to whether the Hill can have any influence at all with the president on trade policy. Speaker Mike Johnson privately urged Republicans to trust Trump’s trade policies and stick with him on tariffs.
Trump wants to eliminate trade deficits with the world. That’s his goal. It may be time to listen to what he says and believe it.
Meanwhile, Trump returned Sunday evening from Florida, where he played in the Trump National Golf Club Jupiter senior club championship. He said he won.
Israeli Prime Minister Benjamin Netanyahu landed in Washington last night for meetings with Trump. The pair will hold a news conference at 2:30 p.m. Trump will also honor the Los Angeles Dodgers for their World Series victory.
The Capitol Hill agenda. This is yet another humongous week for Trump’s agenda.
Johnson and his Republican leadership team are pushing to pass the joint House-Senate budget resolution on the floor this week ahead of the Easter-Passover recess amid growing opposition from hardline conservatives and budget hawks.
Could it be done? Sure. They don’t have the votes now – we’ll get into that in a minute – but we have rarely seen House or Senate Republicans do anything that goes against the president’s will. The leadership is arguing against amending this resolution because of the problems it will cause with the Senate.
So our base case is that there will be a lot of crowing and complaining, but eventually House Republicans will fall in line and pass this budget resolution.
And the same will go for the eventual reconciliation bill — though they still have major issues to iron out.
The GOP leadership plans to have the House Rules Committee consider the resolution today ahead of a floor vote on Wednesday. This is a Monday-to-Thursday week for the House. So the GOP leadership is giving itself Monday night through Wednesday to whip and get to 217.
There are also new fears in the House Republican Conference about the impact of moving too slowly on the president’s agenda. Rep. Frank Lucas (Okla.), a veteran House Republican, said that Congress needs to show momentum in passing the president’s agenda to send a positive signal to the slumping stock market.
The pitch. On a conference call Sunday afternoon, Johnson made the pitch that it’s necessary to pass the budget resolution in order to get Trump’s agenda moving. Johnson’s message was similar to the case he laid out Saturday in a Dear Colleague to Republicans.
White House officials have already been lobbying GOP lawmakers to support the budget resolution.
The doubters. At the moment, though, Republicans are short of the requisite votes to pass it. That’s not strange for a Monday morning. It will take a lot of work and whipping to get the resolution across the finish line.
The main problem right now is the House Freedom Caucus and budget hawks.
Intrinsic in their complaints is that the resolution includes two sets of spending-cut numbers — a low floor for the Senate and a much higher target for the House. Senate GOP leaders say this is by design, to allow for maximum flexibility during the negotiations and to prevent Byrd Rule issues down the line.
The Sunday conference call gave a sense of the problems ahead.
Rep. Lloyd Smucker (R-Pa.) said he can’t support the resolution because he fears it gives the Senate too much power.
House Budget Committee Chair Jodey Arrington (R-Texas) said that he wouldn’t go into details about his problems with the resolution on the call, but said the measure is not faithful to Trump’s agenda.
Remember: Arrington is the Budget chair, so this is a massive slap in the face to the leadership and the White House.
Rep. Chip Roy (R-Texas) said on the conference call that he was opposed to the resolution. Roy has been railing against it since Saturday:
The GOP leadership’s strategy this week will be twofold:
1) They will enlist Trump to talk to House Republicans to push them to vote for the budget. It’s one thing to talk smack on a House Republican Conference call. It’s another thing to say no to the president.
2) The leadership will also say that the two sets of spending cuts represent the House’s position and the Senate’s position. And passing this resolution allows the two chambers to begin working on a final package.
Remember: The GOP leadership’s only real goal at every phase of this process is to create maximum pressure to move onto the next stage. That’s what they’ll do again this week.
Problems in the Senate. The vote-a-rama that preceded the Senate’s passage of the budget resolution early Saturday underscored how difficult it’ll be for Senate Majority Leader John Thune to reflect his members’ concerns during the next phase of negotiations.
Sen. Susan Collins (R-Maine) joined Sen. Rand Paul (R-Ky.) in opposing the budget resolution after an amendment to strike the House’s Medicaid spending-cut instructions failed.
That amendment, from Sens. Ron Wyden (D-Ore.) and Josh Hawley (R-Mo.), gave leadership a lot of heartburn, we’re told, and they worked feverishly to defeat it. Hawley, Collins and Sen. Lisa Murkowski (R-Alaska) backed it. Sen. Dan Sullivan (R-Alaska) was also in play, multiple sources told us.
But if Sullivan voted for the amendment, it would have passed — a nightmare scenario for GOP leaders who would have then needed to get enough support for a “wraparound,” the mechanism for killing amendments adopted during vote-a-rama.
Among the rank-and-file, many believe they’re being hung out to dry with Medicaid-related votes that could come back to haunt them. A GOP senator who was granted anonymity to give a candid assessment said leadership’s message to “suck it up” and stick together on these votes isn’t a good long-term strategy.
“They’re just bad votes for us,” the senator said. “And the counter-messaging is nonexistent.”
Medicaid isn’t the only pressure point. Murkowski laid out additional concerns on Saturday, including the “current policy baseline” and the debt-limit hike. Before the vote-a-rama, Sen. Bill Cassidy (R-La.) railed against the baseline tactic.
