This is another huge week for House Republicans and their quest to pass a reconciliation package filled with President Donald Trump’s domestic priorities.
Congress has eight legislative days scheduled until the Memorial Day recess, which is Speaker Mike Johnson’s deadline to push the reconciliation package through the House.
Hill Republicans want to get the package on Trump’s desk by July 4. We’ll note that Treasury Secretary Scott Bessent is looking for a debt-limit increase – which is in this package – by mid-July.
The House GOP leadership’s goal is to have three key committees mark up this week – Ways and Means, Energy and Commerce and Agriculture – and then have the House Budget Committee assemble the bill by week’s end. GOP leaders would then bring the package to the House Rules Committee on May 19 ahead of a floor vote later next week.
What you might’ve missed this weekend:
– On Friday night, Ways and Means released their initial mark of the tax bill. At some point today – most likely in the afternoon – we’ll get a more fleshed out version of the tax title.
– We’ve reported all the important developments on the text coming today. Ways and Means is expected to create a new tax regime, hiking levies on university endowments. And despite some pleas from Trump, House Republicans are unlikely to add another tax bracket for the ultra-rich.
– News here: Clean energy tax credits from the Inflation Reduction Act are in for a massive overhaul as part of the GOP tax bill.
Some incentives — including electric vehicle tax credits the GOP has railed against — are likely to be repealed as of Dec. 31. Most other credits would be phased out on staggered timelines but could face new limits in the interim. This would include eliminating transferability and adding new sourcing restrictions that apply to countries like China.
– Also news: Ways and Means’ bill is expected to include a remittance tax that targets international money transfers. Several GOP tax writers have proposed new taxes along these lines as a way to fund border security and crackdowns on illegal immigration and illicit activities.
– Ways and Means is unlikely to ratchet up the stock buybacks tax, an issue that came up in committee deliberations.
Let’s talk about the rest of what’s going on this week.
1) The House Energy and Commerce Committee released the text of its bill last night.
This package is going to cause heartburn on the right, no doubt about it. With no broad FMAP changes and no per capita caps for Medicaid, conservatives will be unhappy. Moderates were still reviewing the proposal.
Democrats released a CBO analysis Sunday night night stating the health portion of the Energy and Commerce mark would cut spending by $715 billion over a decade and would result in 13.7 million more Americans being uninsured. Rep. Frank Pallone (D-N.J.) blasted the proposal as “catastrophic.”
On the tech side of the ledger, the panel is proposing a decade-long moratorium on most state-level laws and regulations regulating artificial intelligence models. This would be a major win for tech companies that don’t want states regulating AI models, but it’s not clear it can pass the “Byrd Rule” in the Senate.
The Energy and Commerce text also directs the Commerce Department, alongside the Federal Communications Commission, to find 600 megahertz of spectrum to be auctioned off in the next nine years. However, the panel does protect some frequencies the Pentagon and its Hill allies have opposed making commercially available.
2) At 10 a.m. today, Johnson has what may be one of the most consequential meetings of the entire reconciliation process. Johnson will meet with Ways and Means members and blue-state Republicans who want to raise the deduction cap for state and local taxes.
On one side are a group of angry New York Republicans – Reps. Elise Stefanik, Mike Lawler, Nick LaLota and Andrew Garbarino. The quartet (Rep. Nicole Malliotakis has her own ideas) has already said they won’t accept a $30,000 SALT cap. This faction also includes other SALT Caucus members who panned a $30,000 limit, such as Rep. Young Kim (R-Calif.).
The politics: All five lawmakers have tremendous incentive to hold out for the best deal possible. Stefanik, who is back in the GOP leadership, has a prickly relationship with Johnson. Stefanik voted against the 2017 Trump tax cuts because of the SALT cap.
Lawler has a marginal GOP district and is eyeing a run for governor. Garbarino said he may as well pack his bags without a good deal. LaLota is already getting hammered on Medicaid cuts. And Kim, who’s also in a vulnerable seat, has argued she campaigned on SALT and must deliver some relief.
The SALT cap also disappears in January if Congress doesn’t act, adding to their leverage.
Johnson and top House Republicans understand SALT is an incredibly complex negotiation. Some in the GOP leadership think this could hold up the entire bill. The key for Johnson is to try to peel one or two of these members off from the rest of the group.
3) The House Agriculture Committee’s markup is on Tuesday night. The panel is proposing shifting more of the costs of SNAP onto the states and jamming more of the typically bipartisan farm bill into reconciliation. Some moderates like Rep. Don Bacon (R-Neb.) had initially balked at the SNAP plan but are now on board.
The big picture. House GOP lawmakers are staking everything on passing this reconciliation measure. They’re already facing a huge blowback on DOGE layoffs and Trump’s trade war. Now they’re going to approve more cuts to key social safety net programs while widening and extending the 2017 Trump tax cuts. Their vulnerable members are going to take a big risk with no guarantee the Senate can pass this.
