Republicans in Congress this week continue to discuss ways to move forward President Trump’s legislative agenda through budget reconciliation. The House and Senate Budget committees passed budget resolutions that completely differ in their path forward. This is all occurring with an impending March 14 deadline for government funding. Lawmakers from both parties and chambers have been discussing a way forward to finalize fiscal year 2025.
Budget Update
On Wednesday Feb. 12, the Senate Budget Committee advanced a fiscal year (FY) 2025 budget resolution by a vote of 11-10. Over 200 amendments were filed ahead of the markup, but only a subset were offered and none were approved. The resolution includes reconciliation instructions, mirrored with corresponding House committees that direct authorizing committees to draft legislation to increase or decrease the deficit. These include:
- Committee on Agriculture, Nutrition, and Forestry
- Reduce the deficit by not less than $1 billion
- Committee on Armed Services
- Increase the deficit by not more than $150 billion
- Committee on Commerce, Science and Transportation Committee
- Increase the deficit by not more than $20 billion
- Committee on Energy and Natural Resources
- Reduce the deficit by not less than $1 billion
- Committee on Environment and Public Works
- Reduce the deficit by not less than $1 billion
- Committee on Finance
- Reduce the deficit by not less than $1 billion
- Committee on Health, Education, Labor and Pensions
- Reduce the deficit by not less than $1 billion
- Committee on Homeland Security and Government Affairs
- Increase the deficit by no more than $175 billion
- Committee on the Judiciary
- Increase the deficit by no more than $175 billion
Under the resolution, committee leadership in the House and Senate would have until March 7 to submit their plans to each chamber’s Budget Committee. According to Chairman Lindsey Graham (R-SC), the budget resolution lays out the blueprint “for a fully paid reconciliation bill that aims to secure the border, bolster the military, increase American energy independence and start the process of restoring fiscal sanity.”
On Thursday Feb. 13, the House Budget Committee advanced a fiscal year (FY) 2025 budget resolution by a vote of 21-16. The committee adopted two amendments to satisfy concerns from members of the House Freedom Caucus who said there were not enough deficit reductions in the draft bill. The first amendment that passed would enable the Ways and Means Committee to increase the deficit by $4.5 trillion only if the other instructed committees achieve $2 trillion in spending cuts. That allotment would change by a dollar for every dollar the other committees fall short of the $2 trillion in cuts. The second amendment that passed includes a policy provision mirroring the Regulations in Need of Executive Scrutiny (REINS) Act that requires congressional approval of any major administrative rulemaking with an economic impact of at least $100 million. A few dozen amendments from Democrats on the committee were defeated. This budget resolution contains House reconciliation instructions for:
- Committee on Agriculture
- Reduce the deficit by not less than $230 billion
- Committee on Armed Services
- Increase the deficit by not more than $100 billion
- Committee on Education and Workforce
- Reduce the deficit by not less than $330 billion
- Committee on Energy and Commerce
- Reduce the deficit by not less than $880 billion
- Committee on Homeland Security
- Increase the deficit by not more than $90 billion
- Committee on the Judiciary
- Increase the deficit by not more than $110 billion
- Committee on Natural Resources
- Reduce the deficit by not less than $1 billion
- Committee on Oversight and Government Reform
- Reduce the deficit by not less than $50 billion
- Committee on Transportation and Infrastructure
- Reduce the deficit by not less than $10 billion
- Committee on Ways and Means
- Increase the deficit by not more than $4.5 trillion
Similar to the Senate budget resolution, the House and Senate would have until March 7 to submit their plans to their chamber’s Budget Committee.
The House and Senate budget resolutions contain two drastically different paths forward on reconciliation. The House version is a one reconciliation package containing tax extensions along with energy and immigration reforms and a $4 trillion increase in the debt limit; whereas the Senate version is a two-reconciliation path with the first bill containing only energy and immigration. The larger package in the House includes controversial large offsets, which could include Medicaid, the Supplemental Nutrition Assistance Program (SNAP) and climate measures. Additionally, questions remain in the House whether the instructions provided for the Ways and Means Committee would be enough to accomplish everything that President Trump has proposed in tax policies.
Speaker Mike Johnson (R-LA) has said he would not bring the Senate Budget Committee’s budget resolution to the House floor even if it passes the Senate. However, Senate Republicans are still leaning toward bringing their own budget resolution to the floor next week. We will continue to monitor timing on Senate and House floor actions for their respective budget resolutions.
Appropriations Update
With one month remaining until the government runs out of funding, top appropriators of the House and Senate are still pursuing a bipartisan spending agreement. House Appropriations Chair Tom Cole (R-Okla.) said that the spending leaders are getting closer to agreement but are still not there. The sides are still negotiating a top-line spending figure, which would then help develop the spending levels for the 12 appropriations subcommittees. The Fiscal Responsibility Act (FRA) established statutory spending levels for FY2025 that may act as a guide for development of appropriations ($895.21 billion for defense, $710.69 billion for nondefense; totaling $1.606 trillion). The FRA also established that a sequester order would be issued on April 30 if government funding wasn’t completed for the year. The sequester would result in a 1% cut to defense and nondefense accounts.
As long as all accounts have their appropriations for the full year through the end of FY25, there would be no sequester. This means a full-year continuing resolution (CR) counts as full-year appropriations. A full-year CR is not considered an interim CR that would otherwise result in a sequester. For example, if a short-term CR is in effect for some period of time after April 30 but before Sept. 30, then a sequester would kick in. If a full-year CR is passed sometime between March 14 and April 30 that funds the government through Sept. 30, there is no sequester.
Appropriators may also clarify the fact that a sequester will not take place when they draft the CR with legal advice from the Office of Management and Budget.
We will continue to monitor the development of a full-year CR including transmission of an anomalies request from the Office of Management and Budget to Congress.
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