
J. Scott Applewhite/AP Photo
House Speaker Mike Johnson (R-LA), with fellow Republicans, speaks during a news conference at the Republican National Committee headquarters in Washington, January 22, 2025.
Joe Biden was often criticized, and usually rightfully so, for his indecision in setting legislative priorities. Yet by the third week of his administration, on February 1, 2021, Congress had introduced the budget resolution that would result in his first major bill, the American Rescue Plan. By the end of that third week, House committees had released a draft of that legislation. And by March 11, that bill was signed into law.
That level of efficiency is not reflected in how the Republican Congress is dealing with their initial steps. While one piece of legislation, the anti-immigration Laken Riley Act, has been signed into law, a strategy to approve the major components of the GOP agenda—renewing the Trump tax cuts, financing them through cuts to social spending and fossil fuel leasing on public lands, and adding resources to border security and (perhaps) a military buildup—remains totally uncertain.
The biggest problem is a continued disagreement over the process for passage, specifically whether to wrap everything into one bill or to parcel it out more slowly. At one level, it seems like an absurd thing to talk about: Republicans generally want tax cuts, spending cuts, and a bigger presence on the border, so why should the way in which they go about achieving that matter? Indeed, this is President Trump’s view. “We don’t want to get hung up on the budget process,” he told House lawmakers at their retreat at one of his resorts last week. “Whether it’s one bill, two bills, I don’t care.”
But the reason why it does matter goes back to an age-old truism in Washington: Procedural differences are stand-ins for policy differences. Republicans don’t agree on how to pass the bill or bills because they don’t agree on what should be passed. And that’s a dispute that could linger right up to the end of the year, when the 2017 Trump tax cuts expire.
Trump wants full funding for border security priorities, including a new initiative to target foreign gangs. He wants his tax cuts to be made permanent. And he wants priorities discussed during the campaign, like no taxes on tips, Social Security payments, and overtime benefits, to be included as well.
If you tally all this up, and add additional military spending that conservative war hawks want, you can easily reach something like $9 trillion over a decade. Even the most expansive form of tariff revenue could not possibly bring in that much money. Democrats aren’t going to go along with any such plan, and so the only way to do it is through a party-line vote in the budget reconciliation process, which has to be budget-neutral outside the first decade. This is why the 2017 tax cuts, also done through reconciliation, were set to expire in the first place. So how do Republicans handle that?
One way is through magical thinking that tax cuts don’t cost anything. Republicans are looking at using a “current policy” rather than a “current law” standard to score the tax cuts. If you’re just extending current policy, the theory goes, extending tax cuts that already exist doesn’t cost anything. But the reality is those tax cuts are set to expire, and extending them will lower revenues in the future by roughly $4.6 trillion, according to the Congressional Budget Office. Using the current-law baseline as the method to judge budgetary changes is enshrined in a 50-year-old law, the Congressional Budget Act of 1974. A current-policy baseline for the tax cuts would be “special treatment that no part of the budget has ever received in official budget enforcement,” according to the Center for American Progress.
Republicans don’t agree on how to pass the bill or bills because they don’t agree on what should be passed.
Indeed, The Washington Post reported that House Republican leadership presented a package that included $5.5 trillion in tax cut extensions, where the cost of the extension was not included but “projected increases in federal revenue from much-hoped-for private-sector growth” would be. In this sense, tax cuts not only pay for themselves but actually raise money. But the rest of the article quietly concedes that there is no consensus for this.
The second way would be by offsetting the cost of the tax cuts with massive spending cuts. Getting to the numbers required, especially if you take off the table all the ways oligarchs and elites benefit from the federal budget, is quite difficult. Republicans came up with a host of options in a leaked 50-page document, and the big-ticket items were huge cuts to Medicaid and food stamps. When you unravel the boring budget talk, and say plainly that Republicans want to snatch health care and food away from poor people to finance tax cuts for rich people, the luster of the plan quickly wears off.
And though it’s assumed that Republicans are invulnerable to political damage from kicking the poor to benefit the rich, that’s not what their members think. They have a very narrow advantage in the House, and anxiety from frontline members has forced them to lower their sights. On Medicaid, for example, Republicans have considered reducing matching funds sent to the states, or capping how much health care a person can use. But those ideas are unpopular, so they appear to be settling on a more modest addition of work requirements. (Millions of Medicaid patients are “dual-eligible” seniors on Medicaid to pay for assisted living, so I guess they’re all going back to work.)
There are other options to cut spending, like rolling back fuel efficiency rules on cars and trucks, which scores as a budget savings. But the Trump administration is already doing that on their own, robbing Congress of that offset. The Inflation Reduction Act’s clean-energy investments are a big target, but because many of those went to red areas, some Republicans are wary of ending at least some of them. There’s a bid to roll back Biden’s more generous student loan repayment program, but a federal court might beat Republicans to it.
Smaller ideas like chiseling away at federal employee pensions are on the table. But even if all of these mostly unpopular ideas are advanced, the savings reportedly amount to $3 trillion, not nearly enough to offset the tax cuts and other spending. That will force Republicans to either drop some agenda items or time-limit others.
All of this is before you get into the tricky politics of the state and local tax deduction, which was capped in 2017, helping pay for the overall package by raising taxes on wealthy blue-state residents. Republicans representing well-off suburbanites in places like Long Island want that cap repealed, demanding a big regressive tax cut for their constituents, and they have threatened to derail the entire tax cut package if they don’t get it. There are talks over this but no breakthrough.
Keep in mind that because of GOP vacancies, even one House Republican voting against a final package would kill it between now and April. Even after April, the House math doesn’t get much better; if things go well for them in special elections, they’ll be able to lose up to two votes. You have hard-liners that want more spending cuts and front-liners that want to go slower. And these lawmakers have never shown any aptitude for compromise, even with one another.
That is what’s driving the dispute over procedure. It represents the leadership’s best efforts to figure out how to get everything done. Senate Republicans, who have more of a cushion, would rather split the agenda up into two reconciliation bills; get a win first on border and military spending, they say, and save the knotty tax fight for later. House leaders would rather do one bill, because they think the only way to keep their caucus together is by hanging onto border security funding as a carrot. No House Republican, their theory goes, would ever vote against a border security package.
This has been the core argument over strategy since the election in November. It is now February. There’s still no consensus, and Trump clearly isn’t stepping in to get involved.
House Speaker Mike Johnson’s (R-LA) timeline involves the House Budget Committee adopting a budget resolution for their one big bill this week, and full passage by the end of the month. But the Budget Committee has no date for a markup yet, and no plan on what the resolution would contain. The problems are familiar: The far right wants more spending cuts, the front-liners want to go slow. Johnson declined to set a topline number for the package, which is the bare minimum of what you’d need.
Senate Republicans are considering setting in motion their two-bill strategy without an agreement with the House. “Text is ready” for that, according to Senate Majority Leader John Thune (R-SD). But the House and Senate have to agree on a budget resolution to get the ball rolling. One chamber often “jams” the other on minor pieces of legislation, but rarely on the signature elements of the agenda, especially when the chambers are controlled by the same party.
Nobody believes that Republicans will fail to extend the Trump tax cuts. I don’t believe it myself. But the available evidence suggests that Republicans are in an impossible situation when it comes to finding a package that everyone can live with, with a caucus that has virtually no history of legislative accomplishment. Democrats, meanwhile, had until last week’s outrage over the federal payment freeze conserved much of their energy for this fight, where they feel they have the upper hand, and an ability to easily articulate what Republicans are doing: cutting taxes for the rich on the backs of the poor. So the utter catastrophe for Republicans of failing even to pass the tax cuts can’t happen … only, can it?