Congressional Republicans are clashing over sweeping legislation on taxes, energy and immigration that will be the heart of President-elect Donald Trump’s legislative agenda — underscoring the hurdles ahead as the party tries to unify amid thin margins.
Incoming Senate Majority Leader John Thune sparked heartburn across the Capitol this week when he told GOP senators that the package, which under budget reconciliation rules would allow the GOP to bypass a Democratic filibuster, would be split into two parts. The first would focus on border and energy, with a goal to pass it in the first 30 days of the new Trump administration, and the second on tax. Speaker Mike Johnson quickly endorsed the two-step strategy, though he noted leaders were still working out what would be included in each package.
But a number of House Republicans, including committee chairs key to pulling off the plan, are already raising red flags over the strategy, saying they don’t feel the need to stick to that. The disconnect illustrates the challenge that Republican leaders will have next term: They can preach unity, but they have no room for error as they wrangle at-times raucous members with varied priorities.
“Our members need to weigh in on that. This doesn’t need to be a decision that’s made upon high, okay?” said House Budget Chair Jodey Arrington (R-Texas) about the two-step strategy. “We’re all unified around the objectives, [but] how we roll it out, the tactics and strategies, still under discussion.”
Supporters of the two-step strategy believe moving quickly on a first bill will let them get an early win on some of their biggest campaign promises — namely border security — right off the bat. The transition team is pushing to pass Trump’s border priorities as quickly as possible, which is why Republican leaders are considering doing a non-tax reconciliation bill first, a person familiar with the discussions told POLITICO.
Johnson and House Majority Leader Steve Scalise (R-La.) have been coordinating behind the scenes with Trump and his team, including making trips to Mar-a-Lago, to discuss their legislative strategy. Thune has also met with Trump and his team there, according to a person familiar with the matter.
But the move to prioritize immigration in the first bill could make it more challenging for the Ways and Means Committee to move a tax package later in the year — and Republicans on the panel are making their dissatisfaction clear. GOP lawmakers face major points of division on tax policy, including what to do with the state and local tax deduction. And tax writers had hoped that including border and energy in one package with tax would help sweeten the pot for skeptical lawmakers.
“I’d like to see us do tax in the first reconciliation,” said Rep. Lloyd Smucker (R-Pa.), a member of the tax-writing Ways and Means panel. “Businesses want predictability, so the sooner we can figure this out and have it predictable for them, I think that can be better.”
Republicans on that panel met to discuss their strategy during a weekly lunch meeting on Wednesday.
Asked if he supported the two-step strategy, House Judiciary Chair Jim Jordan (R-Ohio) pointed to pushback from Ways and Means Chair Jason Smith (R-Mo.), adding that: “We’ve got members who have some concerns.” Immigration falls primarily under Judiciary’s jurisdiction.
Republicans struggled to deliver on their policy promises during Trump’s first term, a waste of invaluable political capital GOP leaders have indicated they do not want to repeat. An effort to repeal and replace Obamacare unraveled in the Senate, and GOP leadership has kvetched in closed-door meetings this year that they feel like their party didn’t go far enough on reconciliation during Trump’s previous term, according to two people familiar with the discussions.
Reconciliation deals are famously difficult to maneuver. While it allows the party controlling both chambers to pass legislation with a simple majority, provisions have to follow certain rules, including that they need to have more of an impact on the budget than on policy. The Senate parliamentarian has thrown out both GOP and Democratic proposals that don’t meet that at-times ambiguous standard.
“We have to all be on the same page,” Thune said Wednesday, adding that conversations are ongoing. “Sometimes it’s challenging because you’ve got to have a House, Senate and White House all pulled in the same direction.”
Even as House and Senate leaders try to unify behind a plan, others are floating their own ideas.
“I remain of the belief that we ought to deliver very quickly on a reconciliation package that has core tenets of the things we want to accomplish in terms of border and fees and so forth, IRA repeal, then some elements of tax policy. And then maybe do a second version that gets at true long-standing permanent tax reform,” said Rep. Chip Roy (R-Texas), a Freedom Caucus member who is also on the Budget Committee.
Rep. Marjorie Taylor Greene (R-Ga.) also hinted that she believes Republicans should challenge the Senate parliamentarian if she determines that any of the border and immigration policies Republicans try to put into the bill don’t fall within the strict rules of budget reconciliation. GOP senators have been hesitant to do that over the years, since Democrats could turn around and do the same thing when they control the majority.
“No one elected her, so she should not stop the will of the people,” Greene said, asked about what Republicans should do if the parliamentarian rules against some of the border and immigration proposals.
Republicans are hopeful that they can get things like the border wall and other immigration-related funding into the bill. But Jordan previously told POLITICO that he is also looking at trying to go broader and get sweeping changes to asylum rules and more into the bill, things that would be all but guaranteed to run into parliamentarian issues. Democrats tried to include significant immigration changes in their broad reconciliation bills and were repeatedly denied by the parliamentarian.
And House Republicans have another concern: Once some House Republicans leave for appointments in the Trump administration, they might not be able to lose a single vote until those lawmakers are replaced via special election. So delaying the tax bill until later in the year, some argue, would allow Johnson to have the largest margin and a bit more room for GOP opposition or absences.
“You almost need a whiteboard for all the moving parts, because it’s more than just: Do you run two reconciliations for the two different open budget years, where this one’s more policy and this one is more tax, financial, debt, deficit-type issues? At the same time, are you also calculating your votes,” said Rep. David Schweikert (R-Ariz.), a Ways and Means member who argued it is less about people “fussing” with each other than the overall complexity of the process.
“They have a bigger majority in the Senate than we have in the House. And the problem is: Thune is managing his traditional Senate ideas, not realizing we have one or two votes to give on our side,” he added.