Congress returned to Washington on Monday after a two-week break that began with the House agreeing to a budget resolution that would serve as the vehicle for President Donald Trump’s “big beautiful bill.”
The bill will ostensibly include much of Trump’s domestic policy agenda, ranging from increased spending on immigration enforcement at the US-Mexico border, more energy production and extending the 2017 Trump tax cuts that Trump signed. House and Senate Republicans plan to pass the bill via budget reconciliation, allowing them to avoid a filibuster as long as the legislation remains germane to spending.
The push comes at a crucial moment for Trump. Despite his tidal wave of executive orders, he has not passed that much legislation. And while Trump has yet to nominate anybody to become a judge, a contrast from his first term, when Mitch McConnell turned the Senate into a judicial confirmation factory.
That increases the salience of passing the “big, beautiful bill.”
But Republicans in the House and Senate still face a major problem: They are too far apart on how to pay for the tax cuts with spending cuts. As Inside Washington explained before, the House resolution that passed in February requires that the House find $1.5 trillion in spending cuts to pay for $4.5 trillion in tax cuts.
It also stipulates that if the House GOP fails to find an additional $500 billion in savings, the House will have to reduce the amount of money for tax cuts by the difference between $2 trillion and the final number of savings.
The House Judiciary Committee will hold its markup on Wednesday for its part of the bill, which largely constitutes adding additional fees for immigration, such as for employment authorization and a $1,000 fee to apply for asylum.
By contrast, the Senate is trying to find any way to make sure the Trump tax cuts survive. The Senate remains the last bastion of pro-business Republicans who are at ease with putting tax cuts on the credit card, even if they run up the deficit.
While House Republicans see an opportunity to finally slash spending, although their bill would also run up the debt, the Senate sees spending cuts as perfunctory at best. As the Committee for a Responsible Federal Budget flagged, the Senate version of the bill sets the spending cut floor at $4 billion.
As if to insult the House’s intelligence even more, it has resorted to math called “current policy baseline,” which essentially says that the tax cuts will not add to the debt because they are already in place.
But Republicans have to extend the legislation for another reason: they are racing against hitting the debt ceiling.
The Treasury Department will soon notify Congress of the “X-date,” the date when it will officially hit the debt limit and will be unable to pay the government’s bills for debt it has already incurred.
Republicans included a $4 trillion debt limit increase as a means to avoid a standalone debt ceiling bill. Plenty of fiscal conservatives oppose debt ceiling increases, and with tight margins in the House, it would require Speaker Mike Johnson to negotiate with House Democrats. The filibuster would also mean that Democrats in the Senate would have considerable leverage.
Ostensibly, shoving the debt limit into the reconciliation bill avoids forcing Trump to work with Democrats. But if they fail to pass the final bill before the X-date, they will have no choice.
Finally, there’s the most politically toxic aspect of the bill: Medicaid.
The House’s budget resolution that passed in February requires that the House Energy & Commerce Committee make $880 billion in spending cuts, which means it will likely have to touch Medicaid.
House Speaker Mike Johnson has opened the door to work requirements for young, able-bodied men. But Democrats have made mincemeat out of the idea that Republicans will take away health care from poor people. Particularly, many Republicans from poor states that rely on Medicaid would have to answer for cuts to health care in a midterm year where the president has seen his popularity decline.
Trump has never been one to examine the intricacies of policy. Rather, he seems to want to just get a bill across the finish line. That means that Republicans on the Hill will have to figure this out on their own. But they do so at their peril.
