The 5 things we learned during reconciliation

IN THIS EDITION

Five takeaways from the GOP reconciliation drama

Who’s up, who’s down?

Doctor readies run against Valadao

The Future of Energy: The Legislative Landscape

THE TOP

Five takeaways from the GOP reconciliation drama

Happy Friday morning. And happy Independence Day.

President Donald Trump will sign the One Big Beautiful Bill Act into law today. This will be the 21st bill Trump has signed during his second term.

The GOP-run Congress has been almost completely consumed with reconciliation over the last six months. In that half year, we’ve learned a lot about the key figures that we track – top leaders and key rank-and-file Republicans. Let’s dive right in.

1) Trump got what he wanted. This is Trump’s biggest legislative victory during his two terms as president. The 2017 Trump tax cuts got extended, with populist new tax cuts for tips and overtime. Trump got Medicaid and SNAP spending cuts too, but those don’t kick in until after the 2026 elections. Republicans jammed through $325 billion in new funding for the Pentagon and border security. Trump will now finish his border wall while ramping up deportations. Trump got the debt limit lifted for two years, months before the “X Date.”

Most importantly, Trump got it all in time for a big July 4 bill signing at the White House with B-2s flying overhead. Flags, fireworks, tax cuts – Trump gets it all now.

2) RIP to the HFC? The House Freedom Caucus may have to change its name to “The Freedom to Vote However Trump Says Caucus” after what happened this week.

The Freedom Caucus was always going to have a difficult time in a Trump-run Washington. You can’t simultaneously pledge loyalty to Trump and then vote against a vengeful president’s agenda.

The HFC talked tough but caved repeatedly throughout this process. This latest episode was perhaps the most embarrassing. A number of HFC members said they were going to vote no, issued a three-page document outlining huge problems with the Senate GOP bill, and then they all voted yes, getting nothing substantive in return.

3) What to think about Hill leaders. This was Speaker Mike Johnson and Senate Majority Leader John Thune’s first major legislative project together. And it ended in a win. But there may be a steep cost, especially for Republican moderates in ‘26.

Johnson and Thune kept in close touch throughout the process, although the coordination frayed at the end. Thune and GOP senators changed much of the House bill – as most predicted they would – and it seemed to chafe on Johnson.

Johnson, along with House Majority Leader Steve Scalise, worked very closely with the White House to get the bill across the finish line. Much of the last-minute wrangling was handled by Trump and top administration officials, not House leaders. Yet the relationship between Johnson and Trump has grown ever closer. Trump listens to and buys into Johnson and Scalise’s advice. This was a major win for the speaker.

Thune’s biggest problem ended up being not the conservative hardliners but rather those worried about the steeper Medicaid cuts Thune was pushing.

For Thune, this included an eleventh-hour (literally) negotiation with Sen. Lisa Murkowski (R-Alaska) to soften the blow for Alaska. Thune also agreed to delay implementation of the cuts in order to “minimize the political impact” for 2026.

House Minority Leader Hakeem Jeffries finally showed the fight that the Democratic base is looking for. Jeffries spoke for eight hours and 45 minutes against the OBBB. Republicans say that he didn’t impact the end result, which is true. However, Jeffries got headlines all over the country about what Democrats see as the bill’s adverse impacts – and that was exactly the point.

4) The Senate will always jam the House. After the House just barely passed the initial version of reconciliation in May, Johnson pleaded with Thune publicly and privately to resist changing the bill too much, pointing to his razor-thin vote margin.

Sure, Thune ultimately acquiesced to the House’s SALT demands. But the South Dakota Republican made major adjustments to the structure of the Medicaid cuts, extracting an extra $200 billion. Thune happily noted to us this week that the Senate’s version was more conservative than the House’s, in his view.

Some of Thune’s own senators were upset about the Medicaid overhaul. When Sen. Bill Cassidy (R-La.) warned Thune that this approach wouldn’t fly with the House, Thune responded confidently: The House will pass what we send them.

Thune was right. While it was a gamble, Thune made the calculation that with Trump pressuring them, House Republicans would pass the measure as is. They did.

5) Nobody cares about the national debt anymore. After years of voting against debt-limit increases – and bragging about it – nearly every Republican has now voted for a $5 trillion debt-limit increase. This is a radical change in GOP orthodoxy, and all because Trump didn’t want to have to cut a deal with Democrats. Only Sen. Rand Paul (R-Ky.) and Rep. Thomas Massie (R-Ky.) refused to go along, and Trump lashed out at them repeatedly.

Republicans attacked CBO’s estimate that the GOP reconciliation package would add $3.4 trillion to the national debt by 2034, but that’s actually at the low end of estimates. The libertarian Cato Institute projects the total will be more than $6 trillion.

FY2026 funding. Now that the reconciliation odyssey is finally over, the next big issue – and the biggest one for Congress – is government funding. The White House and House Republicans are seeking huge spending cuts and billions in rescissions despite overwhelming Democratic opposition, setting up a potential government shutdown this fall. The Senate is, uh, being the Senate and heading in a different direction. What that direction is isn’t entirely clear yet.

The Senate Appropriations Committee has scheduled a full-committee markup of three FY2026 bills next week: Commerce-Justice-Science, Agriculture and Legislative Branch.

Senate Appropriations Committee Chair Susan Collins (R-Maine) and Sen. Patty Murray (Wash.), the ranking Democrat, haven’t released drafts of the three bills yet. There are a lot of questions about whether a bipartisan deal is possible heading into next Thursday’s markup.

– Jake Sherman, John Bresnahan and Andrew Desiderio

Join us on Thursday, July 10 at 9 a.m. ET for a conversation with Rep. Sam Graves (R-Mo.). Punchbowl News Founder Jake Sherman will sit down with Graves to discuss the news of the day and the revitalization of America’s air traffic control system. RSVP now!

THE PUNCH POWER MATRIX

Who’s up, who’s down?

— Max Cohen

THE CAMPAIGN

Doctor readies run against Valadao

News: Jasmeet Bains, a physician and a California state assemblymember, is preparing to launch a campaign this month against Rep. David Valadao (R-Calif.), according to two people familiar with her plans.

Democrats are excited about recruiting Bains, who has a resume tailor-made for the political moment. Bains is a doctor who specializes in family medicine and addiction. Valadao, despite his vocal reservations, just voted for President Donald Trump’s signature legislation that will enact roughly $1 trillion in Medicaid cuts.

This is a vote that shocked even some Republicans. California’s 22nd District is agricultural-heavy and low-income. It is exactly the kind of district that relies greatly on rural hospitals and will be hit hard by reductions to Medicaid funding.

The district spans from Bakersfield into Kings and Tulare counties and has more than 60% of its population on Medicaid.

Bains is the first South Asian woman elected to the state legislature, where she has represented Kern County since 2023. She’s also the Central Valley’s Chief Medical Officer for the California Medical Assistance Team, which organizes emergency health services for the state.

The state assemblywoman has already starred in a TV ad urging Valadao not to slash Medi-Cal, California’s Medicaid program.

“I’m trying to see as many patients as I can because Congress is trying to cut their Medi-Cal,” Bains said in the spot, which was paid for by a group called Health Care Saves Lives.

In a statement after the vote, Valadao said he had concerns about the bill but ultimately chose to back it after being “assured by the administration” that extra funding would ensure the survival of at-risk hospitals. Valadao also touted “​​dozens of other policy provisions that directly benefit” the district, including eliminating taxes on tips and overtime.

California’s jungle primary system makes the contest trickier for both parties. Randy Villegas, a school board trustee in Visalia, is also running as a Democrat. Valadao frequently draws primary challengers.

Valadao’s district is heavily Hispanic and shifted to the right at the presidential level in 2024. The lawmaker lost reelection in 2018 and regained his seat in 2020.

– Ally Mutnick

SPECIAL PROJECTS

The Future of Energy: The Legislative Landscape

ICYMI: The second segment of our series, The Future of Energy, published earlier this week with a focus on the legislative and regulatory factors shaping the industry.

The Republican-led Congress, the White House and federal agencies have focused on boosting American energy production while also eliminating climate and clean air protections put in place by previous Democratic administrations. The energy policies will shape the industry for years to come and determine how power is produced in the future.

A key part of that effort is the reconciliation bill that passed yesterday with several energy provisions, including rolling back green energy policies, accelerating the permitting process and increasing U.S. energy production.

Check out the project here. And don’t forget to look at our other installment, The State of Play, here.

– Mica Soellner

DOWNTOWN DOWNLOAD

Former Rep. Cheri Bustos (D-Ill.) and her son Nick Bustos of Mercury Public Affairs are now lobbying for OpenAI on “[i]ssues related to artificial intelligence policy.”

General Motors signed Miller Strategies to lobby on “issues related to the automotive industry.”

The Fox Corporation hired the Smith-Free Group to lobby on “[i]ssues pertaining to media ownership, tax, and programming.”

Former Rep. Kevin Yoder (R-Kan.) is now lobbying for NetJets on “[a]viation safety issues, including those pertaining to technology and crew standards; and promoting aviation workforce training programs.”

Zoom, the teleconferencing giant, is lobbying on “[t]elecommunications implementation within the Department of Defense and US Government.”

Elliott Investment Management, the activist management firm led by GOP megadonor Paul Singer, hired Brownstein Hyatt Farber Schreck to lobby on “critical minerals projects, both domestically and internationally.”

– Jake Sherman

MOMENTS

CLIPS