Reconciliation 3.0 Begins

Today, the House Budget Committee will mark up a budget resolution that will kick off the third reconciliation process of the 119th Congress. The $95 billion budget reconciliation package has the support of the White House, which issued a Statement of Administrative Policy (SAP) in support of the bill. Speaker Mike Johnson (R-LA) has also suggested that Senate leadership was involved in designing the budget. 

In recent weeks, we’ve shared our view that the passage of a Republican reconciliation bill is more likely if its scope is limited to funding the President’s Iran supplemental request and voting reforms. Republicans in Congress seem to have recognized that a narrow bill will be significantly easier to get through the conference ahead of the midterm elections. 

The majority of money in the bill is supplemental funding for defense activities. The bill also includes grants to implement voter ID reforms reminiscent of the SAVE America Act and money for farmers. Specifically, the bill includes instructions for the following House Committees to report legislation that would increase spending by the following amounts:

The $10 billion for the Administration Committee is intended for the SAVE America Act provisions in reconciliation. This is likely going to take the form of state grants that will incentivize the enactment of policies to align with the SAVE America Act.

Timeline

The House Budget Committee is expected to mark up the resolution on today. The House hopes to pass the budget on the floor before their August recess begins on July 24. The Senate is in session until July 31 and could try to pass the budget resolution before it leaves. Individual committees could then report their specific legislation for votes in September. 

Legislative Prospects

The biggest initial push back against the proposal came from conservatives in the House who objected to the fact that the spending was not offset with cuts elsewhere. This was obviously done in an effort to maintain votes from moderates in the Senate who oppose cuts to domestic programs. While these fiscal conservatives are vocal, they are also susceptible to pressure from President Trump. 

In the Senate, a June vote rejecting a war powers resolution may be a good proxy vote to demonstrate that 50 senators would support funding military activity in Iran. However, a number of wild cards exist. Senator Mitch McConnell (R-KY) is still out recovering from a fall, while Senator Susan Collins (R-ME) might be looking to break away from Trump on a signature bill before her reelection in a bluer state. There may also still be bad feelings between Trump and Senator Thom Tillis (R-NC), Senator John Cornyn (R-TX), Senator Bill Cassidy (R-LA) and Senator Lisa Murkowski (R-AK). 

As in the House, the criticism of the package might ultimately come from fiscal conservatives. With the death of Senate Budget Committee Chair Lindsey Graham (R-SC), Senator Ron Johnson (R-WI) is expected to take over the helm of the Senate Budget Committee. Senator Johnson is a fiscal hawk and may insist on adding offsets to the House version.

At this point it seems that that fiscal concerns are the biggest issues facing the reconciliation package. These are easier to overcome than policy disputes because Congress can find pay-fors or the administration can make agreements with individual Members of Congress.